FEHBP and Uninsured Americans

On the floor of the Senate Friday evening, Sen. John Kerry, D-Mass., compared the proposed Office of Personnel Management health care reform plan plan with his own 2004 campaign promise that all Americans have access to the health insurance of federal employees. True, the deal wouldn't open up the Federal Employees Health Benefits Program to the uninsured -- but it could create a parallel, mirror program with similar benefits, Kerry argued.

"Ask any American, do you think you should have access to the same health care that we members of Congress give ourselves, and they'd say yes," Kerry said. "We have the possibility of that. We don't do that precisely, because we don't say it has to be that plan, but there is the possibility that in the plan they put together, there could be that kind of option for people."

Kerry said this before the details of the plan were revealed on Saturday morning. Now that the details are public, we know that OPM will be mandated to negotiate plans as close to FEHBP as possible, and will have the power to deny contracts to insurers that aren't able to make the standard. (These plans will be national, but people would buy them through state-based exchanges which will include other health care plans.)

But despite the similarities, it's a mistake to look at these new national plans as a mirror FEHB program for uninsured Americans.

These programs will be serving different populations, will have different payment structures, and could end up looking pretty different from the options currently available to federal employees. For one thing, FEHBP currently has about 250 health care plans. Under this proposal, OPM will likely offer far fewer options for uninsured Americans. OPM was chosen because it has experience negotiating national health care plans with private insurers. But even if the process is similar, the resulting product could be different.

Which isn't to say it's a bad idea. But if you want to understand why so many federal employee organizations are either against this proposal or are anxious about it, this is one of the big reasons.

If Congress enters into this idea with the mentality that it's giving uninsured Americans the same options members of Congress and federal employees have, then there may be political repercussions if the result is two drastically different programs. How long will it take for an enterprising lawmaker to say, "Hey, it's time we combined them!" That's not a realistic proposal today, but federal employee advocates are worried that this bill could make it a little bit more realistic. Perhaps it's a baseless fear -- Medicare and Medicaid have worked side-by-side at the same agency for years, without similar problems -- but that's the concern.