The FEHBlog on Sunday commented on the fact that the decision of several HMOs to withdraw from the FEHB Program for 2010 is not the end of the world because federal and postal employees and annuitants nationwide have the choice of several high quality fee for service plans. The beauty of the FEHB Program lies in its competitive nature — which means that suppliers and purchasers can freely enter and leave the market. Nevertheless, it is important for federal and postal employees in those departing plans, who total about 60,000 — to select a replacement plan during this Open Season.

Asparity Decision Solutions is making its FEHBP Open Season decision tool freely available on the internet to federal and postal employees and annuitants. As noted previously, OPM has its own plan comparison tool on the web.

The Federal Times published an op-ed by the chief executive officer of the National Community Pharmacists Association bashing the role of prescription benefit managers in the FEHB Program. I don’t buy it. The shortest path is cost savings in prescription drugs is strictly controlling access to drugs — that’s how the VA does it, and it has the means to pull it off because it runs healthcare facilities. FEHB plans generally don’t. (A few group model HMOs like Kaiser do). “You want Lipitor — so sorry we only dispense Zocor.” It’s tough to do that unless you control the doctors.

Speaking of Lipitor I notice that my favorite foreign company Dr. Reddy’s Laboratories, an Indian company, is planning to roll out a generic version of Lipitor in the U.S., according to the Business Standard of India. Lipitor is the world’s best selling prescription drug with annual sales of over $10 billion. Its manufacturer Pfizer surely will not roll over.

The Federal Benefits Open Season starts tomorrow and runs through December 14, 2009. OPM’s Open Season Facebook page now has over 500 fans, and there’s an interesting discussion going on about which plan to choose for 2010. I have always understood that word of mouth (along with the employee premium) is a significant Open Season driver. Now word of mouth has made the leap to the internet.

Govexec.com bemoans the fact that there are fewer FEHB plans to choose this year because more HMOs dropped out than joined the Program. “According to the Office of Personnel Management, 10 states — Alabama, Alaska, Connecticut, Maine, Mississippi, Nebraska, New Hampshire, North Carolina, South Carolina and Vermont — will no longer have an HMO choice.” But all of the federal employee and annuitants in those states and across the country will be able to choose from among six high quality fee for service plans with preferred provider networks. Several of those plans offer more than one option. Certain employee groups have the choice of their own high quality employee organization sponsored plan. The OPM plan comparison tool is here.

You hardly need to read the FEHBlog to know that the House of Representatives passed its leadership’s health care reform bill (H.R. 3962) by a two vote margin after an amendment was approved that strengthened the language in the bill that prevents federal funds to be used to pay for abortions, except where the pregnancy endangers the mother’s health or in cases of rape or incest. The Wall Street Journal reports that

The health overhaul still has several hurdles to clear before it can become law, and its final passage is far from assured. The Senate must pass its own bill and meld it with the House bill before sending it to President Obama’s desk. It’s more difficult to pass legislation through the Senate, and despite Democrats’ wide majority there, leaders are straining to bring together their fractious coalition. Any final bill is likely to be more moderate, and possibly less ambitious, than what passed through the more liberal House.

I took up the invitation on OPM’s website and became a fan of OPM’s Open Season web page on Facebook. The Federal Benefits Open Season, which encompasses the FEHBP, FEDVIP and FEDFSA starts on Monday November 9 and runs through December 14, 2009.

A group of sixteen Republican members of Congress have written a letter to the House Oversight and Government Reform Committee Chair asking for a hearing or markup of the House leadership’s health care reform bill, HR 3962, concerning the bill’s impact on the FEHB Program. I think that it would be a good idea to slow down this bill for a number of reasons, including this one.

At the beginning of this decade, Congress passed a well meaning law which created the TRICARE for Life program. This law had a significant impact on the FEHB Program because many veterans become federal employees after leaving the service, and the TRICARE for Life program caused those veterans to leave the FEHB Program. It’s the second bounce of the ball that can catch you off guard. The House bill allows federal employees to jump out of the FEHBP Program to join a qualified health plan in the Exchange. As this CBO report illustrates, it’s hard to predict how the H.R. 3962 ball will bounce.

Nevertheless, I doubt that the request will be honored because the House Rules Committee is setting a rule on HR 3962 and the Managers Amendment on Friday afternoon and according to the Hill newspaper the House will vote on HR 3962 on Saturday evening. The Wall Street Journal explains tonight that

As of Wednesday, House leaders didn’t appear to have secured the 218 votes they need to pass the bill. They were moving to quickly swear in two Democrats elected Tuesday, which would give the party 258 seats in the House and allow leaders to lose as many as 40 Democratic votes without losing their majority. No Republicans are expected to vote for the bill.House leaders are targeting the vote for late Saturday so they have time to shore up support and set voting rules while still giving members a full week at home for Veterans Day, which falls next Wednesday. While the schedule could slip some, leaders are reluctant to push the vote beyond the holiday. A lull could expose it to attacks from Republicans and a more-than-$10 million advertising campaign by employers that slams the legislation for raising taxes during a bad economy.

The House Republicans have proposed a substitute for H.R. 3962 which is available for review on the House Rules Committee website. (It’s only 230 pages long.) The CBO report on the substitute measure provides a helpful analysis if you are interested.

The Politico and other sources report that the Senate is working at a slower pace.

On Monday, [Sen. Majority Leader Harry] Reid sent a letter to Republicans acknowledging that he is waiting on the Congressional Budget Office’s cost estimates and analysis to finish drafting a bill. Democrats signaled that those estimates would not be ready this week, casting further doubt on their ability to finish reform this year.

Time will tell.

While the House rapidly passed a bill last month to freeze the Medicare Part B premium at $96.40 monthly, the Senate has not followed suit. In October, the Centers for Medicare and Medicaid Services announced that for the 2010 calendar year the following changes will occur:

The Medicare Part B premium will increase for approximately 23% of Medicare beneficiaries because they are new enrollees, they are subject to income related adjustments, or they do not have their Medicare Part B premium withheld from their Social Security check. The premium generally will increase to $110.50 for these folks. The income adjustments which begin at an adjusted gross income of $85,000 for an individual and $170,000 for a married couple can add up to $250 monthly to the premium.

The Part B annual deductible will increase to $155.

The Part A deductible on inpatient admissions per spell of illness will increase to $1110.

Business Insurance informs us that Rep. Joe Sestak (D Pa.) has introduced a bill in Congress (H.R. 3930) to extend the health care continuation subsidy available to involuntarily terminated employees, including federal and postal employees. Without an extension of the law, the 65% subsidy will begin to sunset at the end of this month. The subsidy became available in March 2009, and it extends for nine months. Under Rep. Stesak’s bill, the subsidy period would be 15 months, and it would made be available to people who lose their jobs in 2010. I am surprised that this extension was not included in the House healthcare reform bill.

The Centers for Medicare and Medicaid Services announced the 2010 Medicare Part B reimbursement rates for doctors under the sustainable growth rate formula that Congress routinely overrides. The 2010 adjustment is negative 21.2%. It’s not a question of whether the override will occur; it’s a question of when. As secondary payer to a multitude of Medicare beneficiaries, FEHB plans have an interest in these changes.

Govexec.com reported on OPM’s efforts to ameliorate changes in the Federal Employees Long Term Insurance Program.

The Speaker has released her leadership’s healthcare reform bill, H.R. 3962, which weighs in at 1,990 pages. I have skimmed through about 400 pages that impact employer sponsored coverage including the FEHB Program. The bill adds many new mandates on employer sponsored plans, such as an extension of the term of COBRA continuation coverage (TCC in the FEHB Program) to 2013.

Govexec.com is upbeat about the bill’s impact on the FEHB Program. I am withholding an opinion for now because further analysis is required. The Congressional Budget Office report on HR 3962 is available here. The Politico reports that Democratic “Party leaders would like to start debate on the bill next week and hope to have a final vote before Veteran’s Day on Nov. 11.”

The Federal Times reports that Congress has extended until December 18 the Continuing Resolution funding the federal government. This is the second Continuing Resolution of federal fiscal year 2010 which began on October 1.

At long last, New York State Attorney General Andrew Cuomo announced that “A new not-for-profit company, FAIR Health, Inc., and an upstate research network headquartered at Syracuse University will develop a new independent database for consumer reimbursement [of charges from out of network doctors] and a new website where for the first time consumers can compare prices before they choose their doctors.” This new company will become responsible for managing the Ingenix databases that insurers use to calculate out of network plan allowances. The relatively low allowances calculated by the Ingenix databases encouraged health plan members to use in-network providers, a practice which controls health plan premiums. The new database will offer higher reimbursement levels which will disincent the use of network providers and generally increase premiums. It’s not a good deal for consumers who follow the rules, but it’s a great deal for out of network providers.

Business Insurance reports that “Fair Health will be fully implemented within one year and developed by five upstate New York universities.” Fair Health has the right to modify the Ingenix database. It will be interesting to see whether Fair Health just decides to start from scratch because the Ingenix databases have become so vilified. If that latter route is followed, I expenct that full implementation will take more than one year.

I don’t know what depressed me more yesterday — the Redskins’ woeful performance against the Eagles or Senate Majority Leader’s support for the public option. Needless to say, my day brightened today when I read that independent Senator Joe Lieberman, from Connecticut, who caucuses with the Democrats, is opposed to the public option. The Wall Street Journal reports that

“I think that a lot of people may think that the public option is free. It’s not,” Mr. Lieberman said. “It’s going to cost the taxpayers and people that have health insurance now, and if it doesn’t, it’s going to add terribly to our national debt.”

I completely agree with the Senator. Perhaps that’s because I grew up in Connecticut. Perhaps that because I have watch how over the past 25 years how the statutory pricing in Medicare and Medicaid have shifted costs to the private sector without really controlling the costs of those Programs.

The AP further notes that “The reaction from moderate Democrats — they fear a public plan could drive insurers out of business and take over the marketplace — ranged from muted to skeptical. The one Republican who has so far lent her support to Democratic health overhaul proposals, Sen. Olympia Snowe of Maine, said she was “deeply disappointed” by Reid’s decision.” Stay tuned.

Govexec.com reports on the upcoming Open Season, noting that “a provision in the health care reform bill crafted by the Senate Finance Committee would levy a 40 percent tax, beginning in 2013, on the overall value of health insurance plans that cost more than $8,000 for individuals and $21,000 for families. By some calculations, FEHBP plans already are above the threshold designated for the excise tax, should it be enacted.” That tax would be imposed on the premiums that exceed the threshold, not the entire premium. And it faces a great deal of opposition in the House of Representatives.

In worrisome contrast, the Senate Finance Committee bill would allocate to the FEHB Program a large chunk of a $6.7 billion annual fee on health insurers. That assessment may add 1% to FEHB premiums because self-insured employers and traditional Medicare, Medicaid, and TRICARE are exempted. What’s more, it would smack the Program next year, not 2013, if enacted. Rising prescription drug costs are the least of the FEHB Program’s problems. At least prescription drugs improve peoples’ health.

Speaking of healthcare reform, the Chief Actuary of the Centers for Medicare and Medicaid Services has issued an analysis of the House leadership’s bill, H.R. 3200. This analysis indicates that the bill would cause national health care expenses to increase by $750.3 billion over the next decade. Wellpoint is offering its own analytical reports on how health care reform would impact premiums in each of the states that it offers health insurance, including New York and California.