FEHBlog

Jerry Geisel reports that “The 7% increase for the Federal Employee Health Benefits Program, which covers about 8 million people, is roughly in line with rate increases industry experts expect private-sector employers to be hit with next year. For example, Hewitt Associates Inc. is projecting that 2009 premium increases will average 6.4%.”

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The U.S. Office of Personnel Management held a news conference today at which it announced 2009 FEHBP premiums and benefits. According to OPM’s press release,

Enrollees with self-only coverage will pay, on average, $4.83 more each pay period (about $125 per year) next year. Family coverage will cost an average $11.12 more per pay period. FEHB enrollees pay – on average – 30 percent of the total cost of a plan’s premium, while the government pays 70 percent. This year’s Open Season begins November 10 and runs through December 8, 2008, giving employees the opportunity to change or add to their portfolio of health- and family-care insurance products.

The Washington Post, Govexec.com, and the Federal Times promptly published articles on the news conference.The Blue Cross and Blue Shield Association and United Healthcare issued their own press releases about 2009 premiums and benefits. More details to follow over the week.On related note, the Kaiser Health Care Policy Report featured a long post on rising premiums nationwide.

The nascent National Health Information Network was demonstrated yesterday at one of the final meetings of the American Health Information Community. Healthcare IT News reports that

The demonstrator, a cooperative of 19 groups that includes communities, federal agencies and healthcare providers from across the country, showed how the first approved use cases could work to help save lives and give doctors more information to make better medical decisions. The data used in Tuesday’s demonstration was based on fictitious patients; ONC officials said they plan to launch a live public demonstration with real patient data in December.

Also at this meeting, the Board of Directors of AHIC’s public-private replacement, aptly named AHIC Successor, Inc. was announced. According to an HHS press release, HHS Secretary Mike Leavitt remarked that

“This is a key milestone for the health IT movement. It will ensure that the critical work of the AHIC can be effectively leveraged so that interoperable health IT becomes a reality and that the benefits of health IT reach all Americans. I enthusiastically support the new board and look forward to working in partnership with AHIC Successor to move the nation toward an effective, nationwide health information system.”
To demonstrate the commitment of the federal government to the new organization, Secretary Leavitt and Veterans Affairs Secretary James Peake will serve as federal liaisons to the board. The National Coordinator for Health Information Technology, Dr. Rob Kolodner, will continue to coordinate federal input into the public-private process.

In 1996, Congress passed the Defense of Marriage Act which requires that spousal coverage under the FEHB Act be limited to married men and women. Sen. Joe Lieberman (I Conn.) has introduced a bill, S. 2521, that would modify this law to permit FEHB Program coverage of same sex domestic partners. Yesterday, the Senate Homeland Security and Governmental Affairs Committee held a hearing on the bill. OPM testified against the bill for a variety of reasons, including cost. OPM estimated that “the FEHB Program (government) costs would be $41 million for 2010 and approximately $670 million for 2010 through 2019.” OPM also raised specific concerns about the difficulties of administering this coverage. “The bill under consideration would provide benefits to those in domestic partnerships or relationships which are certified by affidavit. OPM believes this process could lead to fraud and abuse in the programs we administer.” According to a Govexec.com article on the hearing, “[m]embers of the committee were skeptical that fraud would be widespread, pointing to the large number of private sector companies — including more than half of Fortune 500 companies — that have domestic partnership benefits.”

The Washington Post reports that both the House and the Senate have enacted the Wellstone – Domenici mental health parity bill. The House did so as a standalone bill (HR 6983) and the Senate included the bill in the bill modifying the alternative minimum tax and extending various otherwise expiring tax provisions. But the House and the Senate still have no resolved their disagreement over how to pay for the bill. According to the Post, “It is unclear whether a joint agreement can be reached in the few days remaining before Congress recesses.” I think that it will. 

• Business Insurance reports that
  

  In 2008, group health care costs increased by an average of 6.0%, to $8,331 per employee, and are projected to rise next year by 6.4%, according to an analysis released Monday by Hewitt Associates Inc. of Lincolnshire, Ill. The analysis is based on information from more than 400 employers. This year’s 6.0% average increase is up from a 5.3% increase in 2007 but is substantially lower than 2006’s average increase of 7.9% and the 9.2% hike in 2005.  * * * As health care plan costs have risen, cost-shifting to employees also has increased. For example, employees’ total health plan costs—which include out-of-pocket expenses, such as deductibles and copayments, as well as premium contributions—averaged $3,513 per employee in 2008, up 9.9% from 2007. Copies of Hewitt’s health care cost analysis are available at www.hewitt.com

• The Chicago Tribune expands on the cost shifting aspect of this Hewitt study.
• On a related note, the Wall Street Journal reports that
  

  As the credit crunch threatens to throw the economy into a deep slump, Americans are already cutting back on health care, a sector once thought to be invulnerable to recession. Spending on everything from doctors’ appointments to preventive tests to prescription drugs is under pressure. * * *
  In a survey by the National Association of Insurance Commissioners last month, 22% of 686 consumers said that economy-related woes were causing them to go to the doctor less often. About 11% said they’ve scaled back on prescription drugs to save money. Some of the areas being hit include hip and knee replacements, mammograms, and visits to the emergency room, according to a survey conducted by D2Hawkeye Inc., a Waltham, Mass., medical data analytics firm, on behalf of The Wall Street Journal.