Opening the Federal Employee Health Plan to All Americans

By on September 25, 2007 in Current Events with 1 Comment

Next year Americans will be electing a new president and a new Congress. As often happens, the role of the federal government is front and center in political campaigns as candidates advocate more or less government and more or less spending on political issues. The goal of all candidates, of course, is to convince voters to vote for the person making the argument.

But while most federal employees realize they work in a political environment, and that their work environment and their careers may be influenced by the results of the election, at least one of the issues in next year’s election could have an impact on the entire federal workforce–without regard to agency or an employee’s position in the agency.

The issue is health care.

The Federal Employee’s Health Benefit Plan (FEHB) is sometimes cited as a a model plan. Without a doubt, the FEHB is a significant employee benefit. The federal government pays the majority of the health insurance cost, employees have a choice of plans and the insurance can be carried into retirement by employees who meet certain criteria–and most meet the criteria.

One writer described the FEHB this way: "[T]hose who know the FEHBP know that it is indeed a well-run, popular program, fueled by the market forces of consumer choice and competition, with a high degree of consumer satisfaction. The best features of the program are choice and competition among a variety of health plans, and it has been historically free of the kind of micro-management that characterizes Medicare and Medicaid. The salient features of personal choice and national competition among a wide variety of plans have properly made it a model for reforming today’s highly regulated health insurance markets, where personal choice and robust competition are conspicuously absent."

In a recent survey of readers, FedSmith readers were divided on the issue of national health care. Since the survey results were published about two months ago, the debate has occupied more space in the nation’s news media.

Specifically, Senator Hillary Clinton (D-NY) has proposed opening up the FEHB to all Americans.

As a federal employee, if you participate in the FEHB, this could be a significant change if it were to come to pass. No longer would the FEHB be a benefit created by and run for the benefit of the federal workforce; it would be the plan potentially used by millions of Americans for their health insurance. For all the discussion of the issue, there has been very little discussion about how the current health insurance program for federal employees would be altered. Not surprisingly, there has been little discussion of the details of the plan. Adding details creates complications for a candidate who wants to appeal to as many potential voters as possible. When details emerge, controversy arises from groups that are likely to benefit or to be harmed by the changes and the potential benefit to a candidate during an election is diminished.

But the issue is now occupying a center stage in the next election. Here is a brief summary of the proposal. The results of the election could lead to major changes in a key benefit for federal employees.

No doubt, the pool of the people insured would be much larger. It is possible that more younger people would be joining the system and younger people tend to use health care services less frequently than older ones. It is also possible that many people who have not had health insurance and not had regular access to health care would join the system and that costs would increase. Some of the people who would start to use the system would not be able to pay the same amount for their insurance currently paid by federal employees. Also, most federal employees have health insurance, the average income is much higher than for the average American, and most federal employees have had access to health care for the duration of their federal career.

Are you in favor of opening up the FEHB to all Americans? If the system is changed in this way, do you think the changes will have a favorable or unfavorable impact on your health benefits program?

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