Dr. Clif Cleaveland, Commentary

Among options for health-care reform, political candidates should consider a well-established government plan with a substantial track record and a high approval rating among participants.

Since 1960, the Federal Employee Health Benefit Plan (FEHBP) has provided health insurance for federal employees, their families and retirees from government service.

Administered by the Office of Personnel Management (OPM), FEHBP currently covers 9 million people, making it the largest employer-sponsored plan in the world.

More than 350 health plans are included in the FEHBP menu. Each plan must meet FEHBP requirements and clearly advertise these in literature provided to participants. Premiums for each plan are reviewed and approved or rejected annually.

The government agency for which the employee works pays 72-75 percent of the premium. The employee pays the remainder. Employees may elect to have their component of the premium paid with pre-tax dollars.

Plans are evaluated in annual questionnaires by samples of participants in each plan. Plans are graded for promptness of service, overall satisfaction with service provided, customer service, and processing of claims. These evaluations are published annually, thus promoting competition based upon perceived quality of service.

Once an employee selects a plan, it becomes effective immediately. There are no limitations of coverage because of any pre-existing conditions. Employees may change their plan or their type of coverage each November during a month-long period of open enrollment.

Federal Employee Health Benefit Plan includes three basic options: fee-for-service (FFS), health maintenance organizations (HMO), and a high deductible health plan combined with a health savings account (HDP-HSA). All plans are administered by private insurance companies. Certain plans are restricted to members of unions, employee associations, and special groups of employees such as members of the foreign service.

Although basic benefits must be provided by all plans; individual plans may offer benefits beyond those required. Employees may purchase separate coverage for vision and dental services and for long-term care.

Three-fourths of employees opt for a FFS plan, seven of which are open to all employees nationwide. Deductibles and co-payments for care are higher for this option and higher still if an employee chooses care from providers who have not members of an approved, contractual network. An employee who chooses the FFS option will encounter identical language and benefits upon moving to another State.

The HMO option is the choice of 24 per cent of Federal employees. Language and coverage of these plans may vary from state to state, but all must include mandated benefits. Depending upon the state of residence, an employee may choose from two to more than 20 plans. Premiums are lower for HMO plans which offer feature tighter management and fewer options for care. Co-payments and deductible payments are lower for HMO plans.

Less than a quarter of a percent of Federal employees opt for the HD-HAS option, which offers no real advantages over the other choices.

All plans utilize various elements of managed care. Plans designate preferred providers of outpatient and hospital services. Prescription drugs are managed through formularies that emphasize use of generic medications. An employee may always seek care from outside the network of providers established for his plan but at a substantially higher cost.

In the event of disputes, the employee seeks resolution initially from his plan. If this fails to resolve the issue, the OPM will review the claim and issue a final decision.

Strengths of the FEHBP are: standardized benefits, wide range of plans from which to choose, immediate effectiveness, no penalty or exclusion for prior illness or injury, and use of pre-tax dollars for premium payment.

As our national lawmakers contemplate changes in our nation’s system of health care, they should work to provide the rest of us with insurance that is at least equal to theirs.

Contact Clif Cleaveland at cleaveland1000@comcast.net.