Health Care Reform and How It May Impact the Federal Community

What change will health care reform bring to the federal workforce?

When most Americans think of the federal government, agencies that come to mind usually range from the Social Security Administration to the Department of Defense or the Treasury Department or the Postal Service. Chances are, the Office of Personnel Management (OPM) would be a complete unknown to anyone who has not worked for the federal government.

There is nothing wrong with that, of course, since OPM deals with the federal government’s human resources program. OPM describes its mission this way:

It is OPM’s job to build a high quality and diverse Federal workforce, based on merit system principles, that America needs to guarantee freedom, promote prosperity and ensure the security of this great Nation.

As part of that mission, OPM adminsters the health benefits program for the federal workforce.

In a recent survey, with more than 4700 readers responding, readers voiced their opinion that the agency was not doing a very good job in its administration of the program. Here is the survey question and the responses from readers:

Do you think the Office of Personnel Management has done a good job in its oversight of the Federal Employee Health Benefits Program, including the negotiation of insurance rates for federal employees?

yes: 14.8%
no: 57.5%
not sure: 27.7%

To put this in perspective, the survey was taken at a time when many readers were suffering from a case of sticker shock after learning that their health insurance premiums were going up dramatically in a year when federal retirees were not getting any cost of living increase and working federal employees are projected to get an average salary increase of 2%.

It is an axiom that “politics makes for strange bedfellows.” The health insurance debate and the role of OPM brings this point home yet again.

At a time when many customers of OPM think the agency has done a poor job of administering the health insurance program for the federal workforce for the eight million people that GAO says are in the FEHB, Congress is considering expanding the agency’s role in administering a health insurance program on a nationwide basis. While a cynic might say this is punishment for having done a poor job with the federal workforce, the reality is that Congress is looking for a way to sell health care reform to the American voter.

An argument that has resonated with many Americans is that officials in Congress take good care of themselves but not those that put them into office. So, to take some of the sting out of the argument, health care reform (or one version of it anyway) is to create a program that has the look and feel of the federal employee health benefits program.

Organizations that see how government works from a close, personal perspective (and who are not running for elected office) are expressing serious concerns about the impact of this on the federal workforce.

The National Active and Retired Federal Employees Association (NARFE) said in a press release:

“Most organizations are successful when they focus on their core mission like a laser beam. OPM should be in the business of attracting the best and brightest to federal service, if our nation is to effectively grapple with an unparalleled economic upheaval, two overseas wars and homeland security.  OPM’s role as the government’s HR office is too important to dilute with the massive undertaking of creating and administering a new health care system for millions of Americans.

A rough translation of this statement is that OPM will quickly see the federal employee health benefits program as a distant secondary consideration. The agency will be overwhelmed by the additional workload and the relatively small federal employee benefits program will be short-changed or somehow morph into a type of national welfare program.

Even if Congress gives OPM the money to hire many new people to administer the program, the job of successfully implementing a new program of this size will be daunting. And, during the process, the job being done by OPM on behalf of the American public will be under a microscope and press scrutiny unlike anything the agency has ever experienced.

And it isn’t just NARFE that has concerns. A former director of OPM, Linda Springer, had this comment:

I flat-out think that OPM doesn’t have the capacity to do this type of role. Furthermore, I don’t believe that OPM has the statutory authority to do it as well. But on both those counts, I don’t think it would be a good call.

Federal employee unions, who have generally been strong supporters of Democrats and their initiatives, also have reservations. The National Treasury Employees Union stated:

We want to emphasize our position in favor of maintaining the current FEHBP, with its own risk pool, as a program designed principally for federal and postal employees and retirees. With more than eight million enrollees, FEHBP is the nation’s largest employer-sponsored health program; it is administered by the Office of Personnel Management (OPM), and is an important recruiting and retention tool for federal agencies.

In other words, various organizations that represent federal employees go out of their way to voice support health care reform but don’t want all of this reform to hit too close to home—whether in the form of taxing the more expensive federal health care benefits or using existing federal programs and facilities at the expense of denigrating the utility of the FEHB.

It is relatively easy to support big changes in society as long as someone else is paying for it. If “the rich” or “big corporations” or “health insurance companies” or someone else is footing the bill, supporting the change in our nation’s health care system may seem like a good idea.

But, will the federal community support a version of health care reform that will potentially alter the quality or benefits of the existing federal health benefits program?


About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47