More on the hearing

Federal News Radio had the most informative article about the FEHBP oversight hearing held last week. The FEHBlog remains puzzled by claims that the Program needs to be modernized — refined perhaps but not modernized.  As the FEHBlog has previously mentioned the law relies on the participating carriers to keep the Program modern and they have. For example, Blue Cross executive Bill Breskin noted at the hearing that by the end of 2013 the Blue Cross Federal Employees Plan will offer its enrollees in all 50 states and DC the opportunity to join a patient centered medical home.

The FEHBlog has discovered that the Congressional Research Service on February 13, 2013, issued a report on the evolution of the FEHBP.   By the way. the FEHBlog learned something else tonight. He thought that the FEHBA’s comprehensive medical plan provisions in 5 U.S.C. § 8903 were added when Congress passed an HMO law in the early 1970s. However, the staff model and individual practice model CMP provisions are found in the original law. Since enactment of the law in 1959, Congress did recognize a new type of comprehensive medical plan (the mixed model plan) . Live and learn.

Congress also added a new type of employee organization plan in the mid-1980s (5 U.S.C. § 8903a). About a dozen employee organization plans joined the Program at that time. With the benefit of the retrospectoscope, we now know that the mid to late 980s was a time of sharp health care cost increases (due in the FEHBlog’s view to Medicare’s prospective pricing system for hospital claims that kicked in around 1985 — big time cost shifting there.)  That’s not a good environment in which new health plans to grow.  All of those plans eventually dropped out of the program. The last of those plans, the Secret Service Association Plan, merged into SAMBA in the middle of the last decade.

It’s worth noting though that employee organizations that left the FEHBP can ask OPM for permission to rejoin the Program after they have been out of the Program for three years under a change to the law that Congress made 15 years ago (5 USC § 8903b). But no employee organization plan has rejoined the program under this authority.

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