OPM releases the call letter for 2019 benefit and rate proposals

The U.S. Office of Personnel Management this morning issued its call letter for 2019 benefit and rate proposals.  The call letter describes the laundry list of initiatives that it wants the FEHB plans to cover in their 2019 benefit and rate proposals due May 31, 2018. The letter jumped the gun a little because it emphasizes on page 5 the potential impact of the ACA’s high cost excise or colloquially the Cadillac tax on FEHB plans. Yesterday, Congress delayed the effective date for that tax for two more years. The tax originally was scheduled to take effect this year. Two years ago, Congress delayed the effective date to 2020 and yesterday Congress further delayed the effective date to 2022.

The Cadillac tax is very inequitable to the FEHBP.  The tax assumes the average family size to be 2.7 members but the FEHBP family size is much lower which is why self plus one is popular. Consequently, FEHBP self only premiums tend to already be bumping up the ACA’s self only threshold of $10,200 plus adjustment while the self and family and self plus one rates tend to comfortably below the $27,500 other than self only threshold. OPM’s call letter does not appreciate this nuance.

Consequently, the FEHBlog thinks that it would be helpful for OPM to issue a draft call letter in January and a final call letter in early March. The Centers for Medicare and Medicaid Services take this approach with the Medicare Advantage program.

One of the other laundry list items in the call letter is immunizations. The FEHBlog’s internist told him today that Glaxo Kline has obtained Food and Drug Administration approval for a new shingles vaccine called Shingrix. CNN reports that the government has approved Shringix for adults aged 50 and older, even those like me who had the predecessor shingles vaccine, Zostovax.  Shingrix is two injections two months apart. The FEHBlog’s internist suggested waiting a couple months before approach CVS or another pharmacy for the new vaccine.

Speaking of vaccines, the FEHBlog noticed this essay about the flu in last weekend’s Wall Street Journal.

Despite medical advances, we are just as vulnerable today to a flu pandemic as we were a century ago. Vaccines in recent years have, on average, reduced the risk of flu illness among those vaccinated by just 40% (less than 30% this year). Current antiviral drugs only slow the virus—we have no reliable way to destroy it.

The author’s point was not to discourage people from getting the current flu vaccine. Instead, his point was to place focus on ongoing research to create a universal flu vaccine.  The essayist has some other ideas too.

Also today, the Health Care Cost Institute today came out with a report on health care spending from 2012 to 2016. HCCI maintains a HIPAA de-identified claims warehouse contributed by Aetna, Humana, Kaiser Permanente, and United Healthcare.

“It is time to have a national conversation on the role of price increases in the growth of health care spending,” said Niall Brennan, MPP, president of HCCI. “Despite the progress made in recent years on value-based care, the reality is that working Americans are using less care but paying more for it every year. Rising prices, especially for prescription drugs, surgery, and emergency department visits, have been primary drivers of faster growth in recent years.”

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