Details on OPM/Health Care Compromise Revealed

Legislation to involve the Office of Personnel Management in a national health care plan -- finally revealed today after two weeks of closed-door negotiations -- includes language to protect the Federal Employees Health Benefits Program.

Word leaked about two weeks ago that the Democrats were considering a compromise option which would replace the government-run public option for health care with national plans, to be regulated by OPM but offered through private carriers. Some federal workforce employee groups and advocates have been anxious that the plan could eventually dillute FEHBP by shifting OPM's focus. Whether or not they're satisfied with the newly revealed details of the plan, we'll have to see. But clearly, Reid and his colleagues took their concerns into account.

The details were revealed Saturday through a "Manager's Amendment," offered by Senate Majority Leader Harry Reid, D-Nev. The amendment specifies that OPM cannot reduce the staffing or funding which currently goes toward administering FEHBP in order to meet this new responsibility. It requires OPM to maintain seperate risk pools for FEHBP and the "multi-state plans," as they're called--which means that the legislation wouldn't affect benefits or premiums for FEHBP enrollees. And, unlike some early rumors, the legislation wouldn't put any additional requirements on insurance plans currently in FEHBP.

Of course, critics might still argue that the bill would is a first step on the long road of opening FEHBP to the general population--which many health care experts say would drastically raise premium rates. They might also argue that the bill can't protect OPM from a political shift in focus away from the needs of federal employees. But already, Colleen Kelley, president of the National Treasury Employees Union, has sent out a statement saying she is "pleased" with the new requirements in the bill.

Other thoughts:

The bill requires the OPM director to negotiate with insurers to ensure that the plans' premium rates, profit margins, and other terms and conditions are "similar" to those offered in FEHBP. OPM would then have the authority--and this is crucial--to turn down plans that don't meet those standards. That's at least some teeth for OPM to use when it negotiates the plans.

The Congressional Budget Office's report on the compromise is decidedly ho-hum about the OPM plan. It estimates that the plan will have little effect on national health insurance premiums, or on federal government spending. That's mainly because, as CBO puts it, creating national plans (especially non-profit national plans) might be harder for insurers than offering plans through the state-based exchanges, which already existed in the bill. So the end result could be the same number of health care plans.