Posted on November 23, 2005

So you want the same insurance as members of Congress


Health insurance open season is opportunity to save
By Tim Kauffman
Federal Times
November 21, 2005

Federal employees and retirees can save hundreds, even thousands, of dollars next year by switching health care plans during the annual enrollment period.

Those enrolled in the most popular health care plan, Blue Cross and Blue Shield Association’s national standard plan, will see 15 percent rate hikes in January. Switching to Blue Cross’ basic option would save an employee more than $1,200 next year in premiums for family coverage. In the Washington area, the same employee could save nearly $1,900 by switching to Kaiser Foundation Health Plan’s standard option, which is reducing its rates by 16 percent.

Standard and basic plans have more restricted benefits than the more expensive high-option plans, so they might not be right for everyone. That’s why it’s important for enrollees to study their choices carefully so they select a plan that’s right for them, experts say.

Federal Employees Health Benefits Program

Comment: The Federal Employees Health Benefits Program (FEHBP) is the largest purchaser of private health plans in the nation. It provides health care coverage for federal employees, including members of Congress. It provides the national benchmark for health plan contracting, negotiating for the best plans at the best prices. It has often been recommended as the ideal model for universal health care coverage, using tax credits or vouchers and perhaps individual or employer mandates.

It is no surprise that the most popular plan selected by federal employees is the Blue Cross and Blue Shield Association’s national standard plan. Although these plans require more out-of-pocket spending, they offer greater choice within larger provider networks and with less managed care intrusion. Federal employees with higher incomes are quite willing to accept higher out-of-pocket costs in exchange for this greater freedom of choice. Although the information is confidential, it is believed that most members of Congress have selected this option (based on public statements made by some members).

But what has happened? The trend today is to shift more of the costs to individuals. This is being done by tiering the plans into basic, standard, and high-option, not to mention other innovative plans. Premium increases have been somewhat moderated by decreasing benefits and increasing cost sharing. As more move into the lower cost basic plans, the more traditional Blue Cross/Blue Shield standard plans are retaining those who have greater health care costs, driving premiums ever higher. It is ironic that the largest purchaser of private plans is not able to prevent the most popular plan from becoming a victim of the death spiral of accelerating increases in insurance premiums.

Suppose that you currently had the same insurance as members of Congress. What would you do now? The plan already has excessive deductibles, co-payments and coinsurance. Now you are being asked to pay 15 percent more in premiums. Do you reduce your coverage from standard to basic? And how much more will they trim the basic benefits in the future? Do you change to an HMO which is keeping premiums competitive by introducing more cost sharing? Maybe it’s time to gamble on your coverage and place your money in a retirement account that you’ll lose if you get sick (technically known as a health savings account).

Since it’s open season for enrollment in FEHBP, members of Congress now face these coverage decisions for themselves. They will be annoyed, but not enough to make the connection that our system of funding health care requires comprehensive reform. They will begrudgingly pay the 15 percent increase in premiums, and then return to their more pressing task of slashing the health care safety-net for the most vulnerable amongst us.

And for Thanksgiving, sadly we will have to look elsewhere for blessings for which we can give thanks.