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Health Care Reform and the Senate
November 19, 2009 at 7:12 am #85770
THE POLITICAL NOISE HAS STARTED!
From Federal Times:
Feds may lose in health care reform
By REBECCA NEAL
Nov 16, 2009
Senators from both political parties have expressed support for opening up the Federal Employees Health Benefits Program to the public, or ending the program entirely and requiring federal employees to enroll in proposed new state-based health exchanges.
They see it as a matter of fairness, saying federal employees shouldn’t enjoy better health care coverage than taxpayers.
If any such proposal is adopted as part of Congress’ pending health care reform package, then costs for coverage could shoot up for feds, experts say.
Federal employees are a stable, moderately healthy group as compared with the general public, said John Palguta, vice president for policy for the Partnership for Public Service.
“Federal employees tend to be a low-risk pool, though the workforce is aging. … If you enlarge that pool, you add more risk, and you could drive up premiums,” Palguta said.
He said federal employees are better off financially, so they are considered lower risk than those who have lacked good health care.
“Because they have money and they have insurance, they can take advantage of medical care more than the average person. … A lot of people don’t have that access and are going to the emergency rooms when they’re sick and putting off regular health care,” Palguta said.
Several think tanks — including the Rand Corp. and the Heritage Foundation — have studied what would happen if FEHBP were opened to a larger population. All have advised creating a separate risk pool for nonfeds to avoid raising premiums for federal employees.
The National Active and Retired Federal Employees Association (NARFE) earlier this year came out against expanding FEHBP to non-federal employees unless they’re placed in a separate risk pool.
“Separate risk pools are necessary for assessing and adjusting the insurance risk of a new enrollment community,” NARFE wrote in a legislative brief.
The Georgetown Health Policy Institute concluded in a study this year that, if FEHBP were extended to a larger pool, higher-risk individuals — like those with pre-existing conditions — would sign up for more comprehensive plans. But the study also found FEHBP does a poor job of adjusting premiums to reflect risks, so an influx of higher-risk beneficiaries could bankrupt the program.
Two senators offered amendments to change FEHBP during the Senate Finance Committee’s markup last month of the health care bill. One, by Sen. Charles Grassley, R-Iowa, would transfer all federal employees, retirees and members of Congress enrolled in FEHBP to state-based health insurance exchanges. The committee approved a modified version that would preserve FEHBP, but allow enrollees to opt out of FEHBP for the exchanges. Members of Congress and their staffs would be required to purchase insurance through the exchanges, under the measure.
Grassley has not decided if he will try to attach his original amendment to the bill when the entire Senate debates it, an aide to the senator said.
Sen. Ron Wyden, D-Ore., offered an amendment to open up FEHBP to low-income citizens without health insurance. That measure failed.
Federal employee groups will be monitoring the Grassley and Wyden amendments when the Senate takes up the health care bill, which could be as early as this week.
“They could sneak in. There’s a chance of that on the Senate side with the much more open amendment process,” said Dan Adcock, legislative director for NARFE.
Sen. Robert Casey, D-Pa., said FEHBP is a model worth studying as the Senate debates how to cover the uninsured.
“If you have millions of federal employees and their families who are in the same pool, that brings costs down. We are trying to get more and more Americans the same opportunities we have, to be in a pool that big and to keep costs down. For the life of me, I cannot understand why someone would not like that, especially people who benefit from it and their families who benefit from what the Senate gets,” Casey said Oct. 8 on the Senate floor.
Federal employees and retirees also could see other impacts from health reform. The House-passed health reform bill includes provisions that would:
• Cover dependent children without insurance up to age 27. The Office of Personnel Management does not have estimates of how many dependents would be eligible, spokesman Mike Orenstein said.
• Allow low-income federal employees to join health care exchanges. NARFE’s Adcock said 12 percent of eligible federal employees do not participate in FEHBP, some because they have other health care options, others because they can’t afford it.
There are roughly 90,000 federal employees at the bottom rungs of the General Schedule — GS-2s, -3s and -4s, mostly serving in clerical and administrative positions — who conceivably could benefit.
• Expand Medicaid eligibility for federal employees and retirees 64 years and younger who have incomes below 150 percent of the federal poverty line.
• Allow temporary and seasonal federal employees not currently eligible for FEHBP to get coverage. Adcock said agencies may be forced to insure these workers or pay penalties for not providing coverage for all of their employees, but details are still being worked out.
Copyright © 2009 Army Times Publishing Co.
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