Some Federal Workers Can’t Afford Their “Model” Health Care Plan

Now that the Senate Finance Committee has driven a stake through the public option, there’s likely to be renewed talk about the Federal Employees Health Benefits program (FEHB). Throughout the contentious health care debate, the federal workers health plan has been often hailed as the model everyone can live with. It’s even been described by some as the basis for an alternative “public option,”  under which the unisured could either buy into the FEHB or, more likely, into a program modeled on it. Members of Congress just love to talk about offering Americans the “same health care” they themselves enjoy, and Obama has said much the same thing.

Too bad there really isn’t anything public at all about the FEHB, as I (and others) have written before. It’s simply a system that allows federal workers to sort through dozens of different private insurance plans, and pick one they want. (This supposed model for a public option doesn’t even include a public option itself.) Their employer, the government, then picks up the majority of the cost of the premiums, with the workers paying the rest. They have a wide range of choices among private plans and access to group rates, which is better than what a lot of Americans have. But like all private insurance, the FEHB’s offerings are expensive–so expensive that about 100,000 federal workers don’t participate because they can’t even afford their share of the premiums, which  average about 30 percent of the total cost.

Now the FEHB’s premiums–like everyone else’s–are getting a lot more expensive. As Joe Davidson reports today in the Washington Post:

Federal government employees can expect a big jump in their health-care costs in 2010, officials said Tuesday.

Employees enrolled in the Federal Employees Health Benefits Program will pay an average 8.8 percent more in health-care costs, according to figures released by the Office of Personnel Management….The increase compares with a 7.9 percent jump in 2009 and a 2.9 percent increase in 2008, according to the OPM.

The rates for FEHB Blue Cross Blue Shield, a popular choice because of its comprehensive coverage and wide choice of providers, will increase far more–15 percent for individuals, and 12 percent for families.

These rate hikes will likely present no problem for members of Congress, who earn $174,000 a year (and have expense accounts). But Davidson cites responses from unions representing rank-and-file federal workers:

“This is an enormous increase that erodes federal employees’ standard of living,” Colleen M. Kelley, president of the National Treasury Employees Union, said in a statement. “Affordable health care is essential in attracting and retaining a stable, high-quality workforce.”

The American Federation of Government Employees expressed “grave concern” at the news. “FEHBP is getting more and more unaffordable for more people,” said Jacqueline Simon, AFGE public policy director.

Most telling of all is the statement given to reporters by Nancy Kichak, an associate director of the U.S. Office of Personnel Management: “An 8.8 percent increase is not an increase that we feel comfortable with,” Kichak said. “It’s not one that we would like to see our enrollees bear, but unfortunately we’re a victim of the market.”

A “victim of the market.” Sounds like the same thing that’s wrong with the whole U.S. health care system (with the exception of original Medicare, which Congress could look to as a model for a public option, if only they had the political will). 

But as we know, in the market there are always winners as well as losers: Witness the jump in health insurance company stocks on Tuesday afternoon, following the Finance Committee’s defeat of two proposed public option amendments.

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