By Gilbert Chan
The Sacramento Bee
February 11, 2007
Wayne Forbess did a double take after seeing that his monthly premium for health insurance from Kaiser Permanente would shoot up by 50 percent this year.
The 78-year-old Folsom resident and thousands of other federal workers and retirees in Northern California are coping with double-digit increases in the monthly payments for HMO coverage. Federal workers enrolled in three other plans have seen their monthly payments increase by more than 20 percent.
The OPM administers 284 insurance choices for 8 million federal workers and retirees and their family members, spending more than $31 billion a year. About 25 percent of the members are signed up in one of the 209 health maintenance organization programs.
Most of the remaining 75 percent are enrolled in major national fee-for-service plans such as Blue Cross and Blue Shield, according to the Government Accountability Office.
Moving to turn around six straight years of increases in these PPO plans, the government opted to pull $500 million from reserves to reduce premiums. But the government did not make a similar buy-down with HMO rates.
Under the government premium formula, those who prefer richer benefits have to pay more. The formula is aimed at directing workers into the plans with less expensive rates. In general, these plans often offer smaller premiums but require larger co-payments or fewer benefits.
At the same time, the law limits how much of the premium the government will have to pick up. The employee’s share is at least 28 percent — and much more if the insurer’s rates take a leap, as Kaiser’s did this year in Northern California.
“The idea is to keep the government share the same from year to year. The enrollee is stuck paying the difference,” said Mark Merlis, a health-care consultant and expert on federal health benefits.
“There is a cap on what the government pays. But there’s no cap on what the employee pays. We pay a bigger share every year,” said Jacqueline Simon public policy director of the American Federation of Government Employees, the largest federal employee union, representing 600,000 members.
http://www.sacbee.com/103/story/121316.html
Comment:
By Don McCanne, MD
So you would like to have the health care coverage that members of Congress have – even if that means that your premium could increase 50 percent in one year?
It’s important to understand the Federal Employees Health Benefit Program (FEHBP) since many reform proposals recommend using similar private plans to expand coverage to everyone. The plans are mostly PPOs and HMOs. They do vary in their benefits and in their required cost sharing. Consequently, premiums vary considerably.
PPOs have had greater flexibility in keeping their premiums competitive by reducing benefits and increasing cost sharing, especially through large increases in the deductible. HMOs, such as Kaiser, have had less flexibility in that they are not only insurers but also health care delivery systems. As such, their benefits tend to be more comprehensive, now requiring higher premiums than the less comprehensive PPO plans. FEHBP requires the beneficiaries to pay much of the premium difference, allowing them to buy up to richer plans if they so desire.
But there is a political purpose that may not be so obvious at first glance. The administration wants federal employees to select plans with fewer benefits and with more of the costs shifted to the employees. Obviously that reduces the government’s funding of health care for federal employees.
This year they went one step further. They used reserves to minimize premium increases for low-cost PPO plans while allowing full premium increases for high-cost HMO plans. This advances the Bush “ownership society” agenda of having federal employees own more of their own medical debt.
The FEHBP program perpetuates inequitable access to health benefits, inequitable funding of health care, profound administrative waste, and, in so doing, takes away choice of health care providers, limiting access to the insurers’ network providers. And now the FEHBP program is increasing the financial burden of those who do need health care, limiting access because of the lack of affordability.
Why would we ever adopt the highly flawed FEHBP model for reform of our health care system when a single payer national health insurance program would dump this wasteful, middleman industry and provide all of us with affordable, comprehensive coverage?
The next congressperson who says that we should all have the same coverage that they now have, tell him or her that they can keep their lousy program for themselves, but let the rest of us have our own comprehensive national health insurance program that would let us access the care we need without creating unnecessary financial burdens.
