The government could still close, but your health insurance will march on

Both open and closed seasons are coming up. November 17 will mark the end of the continuing resolution, so the government could close when the money runs out. J...

Both open and closed seasons are coming up. November 17 will mark the end of the continuing resolution, so the government could close when the money runs out. Just a few days earlier, open season arrives. That is when federal employees choose a health insurance carrier for 2024. For the rundown on all of this, the Federal Drive with Tom Temin spoke with John Hatton, of the National Active and Retired Federal Employee Association (NARFE).

Interview Transcript: 

Tom Temin  John. Yeah, so a couple of things happening right there in that early part of November.

John Hatton A lot going on.

Tom Temin Yeah. And so this 45 day C.R., the time is ticking. You know, as we speak, there’s still no House speaker. And if there is one, then what the heck? So what’s your best take? What are you watching for?

John Hatton Well, obviously, everything’s going to be dependent on what happens in the House speaker’s race and what the new speaker decides to do in terms of their strategy. In the meantime, the Senate hopefully will be moving along with their appropriations process right before the end of the fiscal year. The House did pass a couple more appropriations bills, and because the House has to act first on appropriations, according to the House, constitutionally, according to the Senate, by tradition, the Senate was waiting for some of those bills to move a minibus that they were going to use the MILCON – VA House passed bill for and adding two more was held up by Ron Johnson. It’s looking like Republicans are going to be playing ball on moving forward with these appropriations bills instead of trying to delay them. And the Senate now has these vehicles to start trying to move some of them. And so I think we’re first going to see a minibus in the Senate using that MILCON – VA – AG and then Transportation T-HUD bill. So hopefully they’ll start making progress while the House figures out what it’s doing with itself. And then we will still have very much uncertainty when the House comes out of the speaker’s race. But hopefully the Senate is using this time well, to least move the ball forward a little bit on the appropriations process. But I think it’s really anyone’s guess what will happen. I don’t think the House Republican Conference itself knows who is going to be speaker and what will happen after they do decide who the speaker is.

Tom Temin Right. And then I don’t think the Gang of Eight or whatever you call them, they’re the ultra-right gang, whatever. Those people that got Kevin McCarthy derailed, they’re not going to sit by and elect someone just to do what they prevent it from happening with Kevin McCarthy. Just have it happen with someone else.

John Hatton Yeah, ostensibly. I mean, it was interesting. I think the motion to vacate itself was brought by Matt Gaetz and there was at least some rumors about that being a personal gripe between Gaetz and McCarthy. And then you had other people that were willing to vote for that motion to vacate, even if they maybe weren’t willing to put it on the floor. You know, there was issues electing McCarthy as speaker where he had there was a bloc of around 20 House Republicans that originally didn’t vote for him for a long period of time. And so some of those people, you know, they did not vote for that motion to vacate. So, you know, on the substance of it, I think what did McCarthy do wrong? Putting a bill on the floor that got majority of Republican votes? I mean, it’s untenable at some point if the Speaker of the House is doing what the majority of House Republicans want and they can’t operate. And while that’s the chaos we’re seeing, McCarthy did what majority Republicans wanted. He avoided a shutdown. But there’s still this again, this chaos. So I don’t know. I mean, I think what could come out of this that could be more stable is a rules change that takes away that power of that motion to vacate being used by anyone or a small number of individuals. So if there is a Speaker elected and a rules change that takes some power away from them, which some of the moderate majority Republicans are calling for, that could lead to a more stable environment. But the Speaker may be further to the right in pushing more for a shutdown anyway. So it’s really up in the air.

Tom Temin And the other thing is, if there is a shutdown or a continuing resolution that flows after this one into the first of the year, until that’s over, no federal pay raise can go through. Correct?

John Hatton No. If a continuing resolution goes through, the pay raise can still go through as long as it doesn’t block it. So really, if Congress is silent, the president has the authority under statutory law to issue that pay raise. So he’s issued his alternative pay plan in August. And basically, if Congress does nothing, as long as the government is funded, that will go through. Now, the continuing resolution wouldn’t have budgeted amounts to cover that increase in pay, but that’s up to the agencies to figure out where they’re getting that money.

Tom Temin And one thing that will continue, whether a shutdown or a continuing resolution or whatever, is federal employee health care coverage, that doesn’t go away. And that’s open season, though it looks like all of the choices are unpleasant. With respect to the pricing, presuming you can get the coverage you want.

John Hatton Yeah. So open season again, we’re seeing premiums increase. That’s not different for the FEHB program. That’s similar across the private sector. CalPERS, which is the California health benefits for their state and local employees, saw a 10.7% increase where FEHB had a 5.8% for overall premiums and for enrollees 7.7%. And that’s due to the structure of how the government contributions are paid. So typically, if the popular plans are rising above the amount of the average, then you’re going to see enrollees paying more than the government in terms of the increase on the total amount.

Tom Temin But one way or the other, everybody’s paying more than they were last year.

John Hatton Yeah, the premiums are going up across the board generally. I don’t know 100% certain that every single plan’s premiums went up. But I think what the 5.8% average increase, they probably are.

Tom Temin Right. And so then what’s your advice to members, to federal employees as they go about this? I mean, we say this every year, but most people tend to stick with what they’ve got. And that’s not always wise.

John Hatton Yeah, we always encourage people to shop for the plans to see. There’s a lot of good plan options out there. Some of them may be more affordable. I think going into this open season, there will be a major change in how federal retirees that are Medicare eligible are receiving or can receive prescription drug coverage. For example, in the popular Blue Cross Blue Shield plan, which covers, you know, there’s 8 million participants in FEHB, about 5 million are under Blue Cross Blue Shield. If you’re Medicare eligible, if you have part A, part B, you’re going to be automatically enrolled in their kind of add on prescription drug plan, which should help provide savings to you in terms of the receipt of your prescription health benefits. And so there are some options where you can opt out of that. The only main reason you wouldn’t want that is if you’re subject to higher income premiums for Part D, those even may be offset by the savings you get by being in that. But for retirees are really should be looking at their prescription drug coverage, how the new options work for them. And anybody really who’s Medicare eligible. There’s continuing to be more plans that have better coordination between Medicare and FEHB in a way that can help you save money.

Tom Temin Right. Because that Part B and Part D choice can get complicated, there’s penalties if you don’t do things right and so on. So the more they’re coordinated, the less likely you’re going to have some problem financially that pops up that you just didn’t foresee.

John Hatton Right. The first question people often ask us, should I even take Part B? There’s questions around when you should do that, whether you’re still working, you’re retired. If you wait and you had the opportunity enroll, you’re paying late enrollment penalties. Then once you have part B, if you do take that, then what plan do you take? Or if you don’t have part B, what plan you take, you probably want more comprehensive coverage. So we try to help our members with all that through webinars, white papers and the like. So anybody who’s looking for an extra bit of advice in open season, please go to the NARFE website, see what webinars we have. You know, we have those, particularly on these Medicare related issues I think can be a real help because they are complicated factors.

Tom Temin And of course other than general inflation, which is uneven across different sectors of the economy, nobody really knows why the premiums went up as much as they did. It’s not because the workforce is suddenly sicker as a whole.

John Hatton Yeah, the reasoning OPM gave was that there are changes in costs and utilization, which seems like a very obvious answer that, you know, prices went up and maybe more services were used. You know, we saw coming out of the COVID pandemic, there might have been delay in certain outpatient surgeries. I think we would have caught up by then utilization of specific brand name drugs, emergency room care and outpatient care, where some of the primary drivers that OPM cited. But again, that’s not super specific in terms of what exactly is driving this, other than it seems like a combination of people using more care and it costing more.

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