OPM Conference Day 1

Govexec and Federal News Radio report on the first day of the FEHBP carrier conference. The articles focus on the addition of a new self plus one enrollment type for 2016.  OPM also has created its own self plus one website which is full of Qs and As.  A counterintuitive aspect of this change is that the plan enrollment codes for self plus one will end in 3 and 6.  Self only and self and family will retain the 1 and 2 enrollment codes respectively.  Information technology system issues forced OPM to adopt this approach. The automated enrollment system will be programmed to remind users about the availability of self plus one if the user only enrolls one family member.  OPM will create a special limited enrollment period in early 2016 for employees on premium conversion who missed the self plus one boat during Open Season. Annuitants who are not eligible for premium conversion have the right to reduce their coverage from self and family to self plus one mid-year in any event.

OPM will be encouraging annuitants to pick up Medicare Part B when they first become eligible for that program. Doing so avoids a late enrollment penalty. Tom Bernatavitz, Aetna’s FEHB plans president, explained to the audience that in the 1990s FEHB HMOs offered enrollee cost sharing so low that OPM discourage Medicare Part B enrollment.  In the next decade, enrollee cost sharing increased but annuitant members without Medicare Part would have to pay a late enrollment penalty. As a result just north of 50% of Medicare eligible annuitants enrolled in FEHB HMOs have Medicare Part B. In contrast 79% of Medicare eligible annuitants in FEHB fee for service plans have Medicare Part B. But that number is dropping because 70% of annuitants who can pick up Medicare Part B without a penalty do so. OPM emphasized that Medicare Part B enrollment is a good deal for annuitants, and plans should communicate that message and make appropriate benefit design changes. That’s a good idea.

A couple of PBM speakers (CVS and Express Scripts) explained that while the number of combined Starbucks and McDonalds outlets in the U.S. total 25,000, there are 68,000 retail pharmacy locations in the U.S. The speakers encourage to audience — consistent with OPM’s call letter — to consider more limited, high quality pharmacy networks. They also explained that the benefit of a managed formulary is the ability to exclude ineffective drugs, drugs with worse side effects than competitors,  and drugs for which manufacturers offer co-pay card in order to undercut the competition.  The speakers emphasized that their independent formulary committees are tasked with the objective to include all of the safe and effective drugs that patients need. Some of those drugs have no competition. Others do. For the drugs with competition, the PBM business people can negotiate deeper rebates for placement on the formulary. The PBMs have formulary exception processes for plan members.  This makes sense to the FEHBlog.

Day 2 is tomorrow.