Agency head debates administration policy's effect

From rising health care premium costs to recruiting strategies, a current agency head and a former Reagan official Wednesday debated over how the next administration's policies would affect federal employees. The debate, sponsored by FPMI Communications, Inc., featured Janice R. Lachance, director of the Office of Personnel Management (OPM) and George Nesterczuk, current vice president of Global USA, Inc., and representing presidential candidates Al Gore and George W. Bush, respectively, on issues including health care premiums under the Federal Employees Health Benefits Program (FEHBP), downsizing, and federal recruiting and retaining strategies. FEHBP, the largest employer-sponsored health insurance plan in the nation, provoked the most debate between Lachance and Nesterczuk. FEHBP provides coverage for 9 million federal employees, retirees and their families. Last week, OPM announced that health insurance premiums under the plan will increase an average of 10.5 percent next year, even higher than anticipated. Premiums rose an average of 9.3 percent for the year 2000, while 1999 saw an increase of 9.5 percent. Nesterczuk, who served as a senior official during the Reagan administration, and has worked on issues such as health care and employee benefits, said the health care plan was essentially a good one, but that the skyrocketing rates were alarming. "We have a very good plan, but it can be managed out of control very quickly," he said. He criticized the mental health care benefit, which is slated to take effect in January 2001, calling it "a ticking time bomb," referring to its potential to raise rates even further. Lachance acknowledged that the increase in premiums is a concern, but said many other employee insurance packages are experiencing the same problem. "We have to make sure we have appropriate accountability for our carriers," Lachance said. She also defended the mental health care benefit to be included in the FEHBP package, saying it will cost 1.3 percent and that OPM intends to monitor it closely. "It's disingenuous to blame it all on the drug companies," said Nesterczuk. Lachance praised Vice President Al Gore for emphasizing the pivotal role federal employees play in government and for his commitment to pushing for benefits like long-term care insurance and other family-friendly policies. President Clinton last week signed into law a bill allowing federal employees to purchase long-term care insurance at discounted rates. She said a Gore administration would be committed to attracting a talented and diverse workforce that "looks like America," citing recruitment strategies such as a student loan repayment program and the presidential career intern program. She also mentioned Gore's effort to push agencies to focus on strategies to retain current employees. Nesterczuk said a Bush administration would focus on end results, rather than processes, enforce the Government Performance and Results Act by linking agencies' budgets to compliance, and emphasize accountability for people and financial systems accountable. He said Bush would review government programs to determine which should remain federal, and which could be more efficient privatized, or under state or local control. Nesterczuk allayed fears of downsizing. "There is likely to be some downsizing, but not as an end to itself," he said. "The focus is on functions, not on bodies; the idea is to use government more efficiently." Bush has said he would eliminate 40,000 middle management jobs in the federal government over the next five years and open to competition at least half of all jobs not defined as "inherently governmental." Gore has not specifically called for more job cuts, outsourcing of federal work, or changes to civil service rules. He supports giving federal workers more on-the-job flexibility, as long as goals are met. As for recruiting and retaining a talented federal workforce, Nesterczuk said Bush would push for a more performance-based system, rewarding people on merit rather than seniority, and would try to provide greater opportunity for creativity and innovation in the federal workplace. He said the current system results in "undercompensating some and overcompensating others," which has led to low morale among federal employees. FPMI Communications, Inc. publishes newsletters on federal human resources, training issues, and other management topics for federal executives.