OPM Says FEHBP Blue Cross Plan not Anti-Competitive, Despite ‘Dominant Position’ in Program

Although Blue Cross and Blue Shield provides coverage for nearly half of the nine million federal employees, retirees and family members enrolled in the Federal Employees Health Benefits Program, the insurer's "dominant position has not weakened competition" among the program's other health plans, the Office of Personnel Management says. OPM, which administers the FEHBP, was responding to a request by House Government Reform Committee Chair Dan Burton (R-Ind.) to investigate the "possible consequences" of a Blue Cross initiative that reportedly would create a "lower-cost, more restrictive plan," under which federal employees would have to use Blue Cross' care provider network. Blue Cross has declined to discuss what changes it might submit to OPM, the Washington Post reports. Eight rival health plans, concerned that "substantial realignment" by Blue Cross would decrease competition "at the low-cost end of the market," have formed a coalition to raise objections to Blue Cross' potential benefits changes. But according to OPM, there exists "no evidence that consumer choice has been negatively affected by growth in the Blue Cross and Blue Shield enrollment." Federal employees, depending on where they live, can choose between seven and 31 health plans during the annual enrollment period. OPM Acting Director Steven Cohen wrote in a letter to Burton, "We believe that the structure of [FEHBP] will prevent (Blue Cross) from exerting unilateral control over its premium rates, and we have no indication that the plan is using, or intends to use, its market position for unlawful purposes." The OPM letter adds that other health plans might also propose new benefit designs for next year, the Post reports (Barr, Washington Post, 5/30).