Postal Reform

Yesterday, the Senate Homeland Security and Government Reform Committee began its markup of a substitute postal reform bill (S 1486) sponsored by the Committee’s Chairman Sen. Tom Carper (D. Del.) and Tom Coburn (R. Okla.).  For several years, the Postmaster General has been seeking legislative authority to pull Postal employees and annuitants out of the FEHBP.  His goal is to lower the health benefit costs by betting coordinating coverage with Medicare.  The Postmaster General got on this kick because of a 2006 statutory change that requires the Postal Service to pre-fund its retiree health insurance obligations. As the Postal Service and the Postal unions have pointed out, no other American business is under this obligation. Nevertheless, postal reform bills in Congress reduce but retain that obligation.

The Carper-Coburn substitute bill (Section 104) would create a Postal Service Health Benefits Program within the FEHBP under OPM’s administration. The PSHBP would be more tightly coordinated with Medicare. As one Senator noted at the markup yesterday, the Postal Service is funded by its customers just like any other U.S. business and all other U.S. businesses that cover there annuitants with Medicare put the primary payment obligation on Medicare. More details can be found in the Federal News Radio article.

Section 104 strikes the FEHBlog as a Goldilocks solution. There was a lot of discussion at the markup yesterday but no concerns were raised about Section 104. Govexec’s headline on yesterday’s meeting is that after contentious debate the Committee delayed the bill.  The markup did end after three hours without a final vote. However, the FEHBlog expects that the issues eventually will be ironed out, thereby allowing the bill to reach the Senate floor. This may be the year that postal reform legislation is enacted. Good luck to the Postal unions.

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