House Panel Looks for Ways to Control FEHBP Costs

Lawmakers and health officials on Oct. 16 discussed ways to reduce costs in the Federal Employees Health Benefits Program during a hearing of the House civil service subcommittee that was "short on remedies," but long on "ways to frame the problem," the Washington Post reports. Since 1997, the average premium in the program has increased 46%, with a 13.3% rise coming next year, according to subcommittee chair Dave Weldon (R-Fla.). William Flynn, associate director for retirement programs at the Office of Personnel Management, which oversees FEHBP, said that the program has actually seen smaller premium increases than the private sector, but Colleen Kelley, president of the National Treasury Employees Union, cited a study that found that premiums for firms with 5,000 or more workers have "run about 3% less" than FEHBP premiums over the past two years. Both Stephen Gammarino, senior vice president of the Blue Cross and Blue Shield federal employee program, and Robert Moffit, director of domestic policy studies at the Heritage Foundation, said that the aging federal workforce contributed to much of the FEHBP's premium increases. Moffit suggested that bringing younger people into the program -- perhaps by covering dependents of military personnel -- would "ease the pressure on premiums." Del. Eleanor Holmes Norton (D-D.C.) said that the program could consider covering contract workers and family members of reservists called to active duty. Flynn, while stating that OPM would consider these proposals, "expressed reluctance" to opening the FEHBP to whose without a "direct employment relationship with the government." Finally, former Rep. Tom Coburn (R-Okla.), Lawrence Mirel, commissioner of the District's Department of Insurance and Securities Regulation, and Moffit suggested that the program consider introducing medical savings accounts to help bring down costs and give employees a greater say in how they spend their health care dollars (Barr, Washington Post, 10/17).