Vital Signs

Survival of federal benefits becomes a key focus in the health care debate.

During the 2008 presidential campaign, then-Sen. Hillary Clinton floated the idea of allowing uninsured Americans to purchase insurance through the Federal Employees Health Benefits Program as a way of reforming the country's health care system. Clinton's idea, one not shared by her opponent, then-Sen. Barack Obama, fell by the wayside amid philosophical debates over the wisdom of offering a government-run insurance program and hard-headed political arguments over whether to prohibit the use of federal subsidies to pay for controversial procedures, specifically abortions. The health care program long touted as a significant benefit for federal employees did not turn out to be the solution for America's growing uninsured population, but it did become a significant political weapon for Democrats and Republicans seeking to change-or derail-the most ambitious item on President Obama's agenda. As the debate over health care reform heated up last summer, Republicans took two approaches. Sen. Charles Grassley, R-Iowa, ranking member of the Senate Finance Committee, floated a proposal that would end the Federal Employees Health Benefits Program and require civil servants to purchase health care through exchanges run at the state level.

Instead of attacking the program, Republicans on the House Oversight and Government Reform Committee chose a different approach. In July, they began to urge the Democratic majority to schedule hearings to determine whether health care reform would require the insurance plans offered through FEHBP to change the services they provided to enrollees. Democrats say that implication was spurious, but concede it had a political impact.

The health care bill the House passed in November 2009 laid out requirements insurers would have to meet to be considered "qualified health benefits plans" that offered adequate coverage. Plans would have to cover services such as hospitalization; outpatient care; visits with doctors and other qualified health professionals; prescription drugs; treatment for physical rehabilitation, mental illness and substance abuse; preventive medicine; maternity care; and basic care for infants and children younger than 21. Under that legislation, Americans would have to choose between enrolling in plans that offered those kinds of coverage, paying taxes if they didn't enroll, or move into a government-run plan that did have the required features.

Rep. Darrell Issa, R-Calif., the ranking member of the Oversight and Government Reform Committee, asked Chairman Rep. Edolphus Towns, D-N.Y., to set hearings to examine whether all the offerings in FEHBP met the definition of "qualified health benefits plans."

According to Frederick R. Hill, Issa's communications director, the congressman was concerned about whether high-deductible plans, in which federal employees pay lower premiums but assume more expenses for medical care, met the standard set out in the House bill. "It creates an incentive for enrollees to keep costs down but gives them the security of knowing significant expenses will be covered," Hill says.

Towns refused to call hearings, and noted that the legislation has a five-year window that will allow insurers to make changes to their coverage to meet the definition. That would leave plenty of time for any program that needed to improve coverage to do so, Towns and his committee staff have said repeatedly in responses to Issa's requests. Rep. Gerry Connolly, D-Va., says Issa's concerns were specious and politically motivated. "I think that's just fear-mongering, quite candidly, and I've told him to his face," Connolly says. "There's nothing in [either the House or Senate health care bills] that would remotely hint at changing the terms and conditions and coverage of FEHBP or TRICARE"-the health care program for service members and their families.

But Connolly acknowledges the Republicans' persistent questioning on the issue has made an impact with voters. At a town hall meeting Connolly hosted in his district to help federal employees and retirees choose between FEHBP offerings, and he and other participants received multiple questions about health care reform's effect on the program.

Lawmakers who represent large numbers of federal employees worried that at least one proposal in the House bill would hit their constituents particularly hard. Connolly and other members in Virginia and Maryland teamed up to change a provision that would have funded reform by imposing a 40 percent tax on health care plans that cost more than $8,000 for individuals or $21,000 for families. The tax on those so-called Cadillac plans would be levied on insurance companies rather than plan purchasers, but lawmakers worried that the costs of the tax would be passed on to consumers.

Washington-area representatives argued that federal employees' plans already were expensive enough to be hit by the tax. They won adoption of a funding mechanism that would tax individuals who make more than $500,000 or couples whose combined income is more than $1 million. The Senate included a tax on expensive plans in its legislation, but it was not clear in mid-December whether that mechanism would make it into the final legislation. Even then it would face a lengthy conference to reconcile the differences between the House and Senate bills.

Connolly and federal employee groups will be watching that conference. He and other Virginia and Maryland lawmakers know that keeping federal employees' health care intact is crucial to their reelection efforts. "We're certainly not suicidal," he says. And while Congress members like Issa might not have the same concerns in their districts, they've found that watching out for federal employees during the health care debate makes for good politics.

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