Federal employees and managers are up in arms about a House Budget Committee proposal that would shift more than $3 billion in health care costs from the government to employees over the next five years.
The proposal was included on a list of more than $100 billion in budget cuts prepared by House Budget Committee Chairman John Kasich, R-Ohio, as part of his proposed budget resolution. Last week, Kasich presented the resolution to the House Republican Conference, then withdrew the list of cuts after it generated intense opposition among both moderate and conservative Republicans.
Nevertheless, Federal Manager's Association President Michael Styles wrote a letter to Kasich this week saying he was concerned that the Budget Committee would include the health benefit cuts in its eventual markup of the budget resolution.
"FMA is disappointed that the Budget Committee is considering returning to the federal community ... to ask for more money," Styles wrote in the letter, dated May 18. "We have done more than our fair share toward reaching the long-sought goal of having the first balanced budget in 30 years."
The most significant benefits change under consideration involves the formula that determines the government's share of premiums under the Federal Employees Health Benefits Plan. The proposal would make the government's contribution a flat annual dollar amount that is adjusted annually based on the rate of inflation, as opposed to increases in medical costs. Currently, the government's share is set at 72 percent of the average premium, under a provision devised by Reps. Connie Morella, R-Md., and Steny Hoyer, D-Md.
The Budget Committee says the proposal, which would save the government an estimated $3.3 billion over five years, would force health plans to hold down costs and give employees and retirees an incentive to shop around for the best values. But employee advocates say the move would simply shift costs from the government to beneficiaries.
Kasich's proposed budget resolution would also extend until 2003 a 0.5 percent increase in the amount employees contribute to the federal retirement fund. The increase was scheduled to end in 2002. The extension would shift an additional $194 million in retirement costs from the government to employees.
"This proposal is nothing more than a gratuitous payroll tax," Styles wrote. "Civil servants are taxpayers too, and we resent having a tax levied against us to fund tax breaks for other Americans."
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