Can FEHBP Save Medicare?

One of the leading bipartisan strategies to fix Medicare's financial woes -- restructuring the program to more closely resemble the Federal Employee Health Benefits Plan -- will not work without major changes, health policy experts warned the Senate Finance Committee today.

The FEHBP system, while offering lessons from which Medicare could benefit, "is not something that can be blindly transferred to the aged and disabled population, which is a very different population than the one covered by the FEHBP," said former Congressional Budget Office Director Robert Reischauer.

The Heritage Foundation's Stuart Butler, a proponent of using the FEHBP as a model for Medicare, agreed "there are things that can be corrected and improved" in using the FEHBP model. But Reischauer stressed the Medicare population is far more diverse than federal employees and retirees covered by the FEHBP.

Medicare beneficiaries also are more spread out around the country, while federal workers tend to be concentrated in a relative handful of areas. Medicare would require creation of some entity to serve the functions now performed by each federal agency, including enrolling and disenrolling beneficiaries.

In addition, the FEHBP includes no risk-adjustment mechanism to compensate plans for enrolling sicker people, Reischauer noted, adding, "While this has caused some problems for FEHBP, the consequences for a competitive Medicare system are likely to be far more serious."

A broad range of senators, including Sens. Judd Gregg, R-N.H., and Ron Wyden, D-Ore. -- both of whom testified at the hearing -- as well as Sens. John Breaux, D-La., and Connie Mack, R-Fla., have developed or are developing proposals that use the FEHBP system of competing private plans as a model for a reformed Medicare system.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.