Senators Rand Paul (R-KY), Lindsey Graham (R-SC), Mike Lee (R-UT) and Jim DeMint (R-SC) have introduced legislation that would implement a fix for Medicare by enrolling all senior citizens in the same health care plan as used by members of Congress and all federal employees (the Federal Employees Health Benefits Plan).
Dubbed the Congressional Health Care for Seniors Act (CHCSA), the plan touts that it would save taxpayers $1 trillion in the first 10 years as well as provide better health care benefits, choice, quality and outcomes by moving seniors into the FEHBP.
How exactly? Federal employees have a choice of among roughly 250 plans participating in FEHBP, including 20 nationwide plans. The expanded choice of plans means access to better doctors, better quality health care, and the option and ability to pick plans that would better meet an individual’s needs. The reasoning also is that since Congress uses the plan, it must be the best in the country.
The legislation would also create a new “high risk pool” for the highest cost patients within the FEHBP. The federal government will directly reimburse health care plans for enrolling the costliest 5 percent of patients, which keeps premiums low while allowing high-risk patients to get the same high-quality health care as every other enrollee – federal employees and seniors alike.
If enacted, seniors could enroll in FEHBP beginning in 2014. The plan would set up a tiered payment system based on an individual’s ability to pay. The cost of seniors’ health care would generally be subsidized to cover 75 percent of premiums, but seniors with annual incomes of $100,000 to $200,000 would have 30 percent of their costs covered; seniors with annual incomes of $200,000 to $1 million would have 15 percent of their costs covered; seniors with at least $1 million in annual income would get no subsidy. Medicaid will continue to provide assistance to help low-income seniors afford their care.
Other highlights of the proposal include:
- New plans with equivalent or superior benefits to an existing plan can enter the market freely without new requirements or mandates.
- Willing employers can give eligible patients the option of staying on their current plan and still receive the government’s contribution.
- Insurers will be rewarded for enrolling high-cost patients (referred to as a “high-risk pool”). The program assumes 90 percent of the total costs for the top 5 percent most expensive patients.
- The initial eligibility age for seniors would be gradually increased from age 65 to age 70 over the period of 20 years (three months per year).
Would costs to existing participants be affected by these changes? Yes, according to Paul, who said in a press conference on Thursday, “Federal employees including myself will have to pay [more]. It’s about $30 a month more. But I think that’s something we have to do to make it fair and to help save Medicare.”
Senator Paul said, “Medicare, as we know it, is broken and in desperate need of reform. The CHCSA fixes the Medicare system, and gives Seniors access to the best health care plans enjoyed currently by Members of Congress and does so without breaking the bank. Seniors deserve to have a world-class health care system, and Americans deserve to have their tax payer dollars put to better use, in a system that will not eventually bankrupt this country.”
Senator Lee added, “Allowing Medicare recipients to enroll in the FEHBP is a win for both seniors and the taxpayer. The FEHBP fosters competition among its hundreds of individual plans, provides better benefits for enrollees, and offers much wider choice and flexibility to participants. Most importantly, switching to the FEHBP will save the American people more than $1 trillion over the next decade. Frankly, it’s hard to argue against this common sense reform because the FEHBP covers every Member of Congress and all federal employees. Our seniors on Medicare should have the opportunity to enroll as well.”
Not everybody is crazy about the idea. Joseph A. Beaudoin, president of NARFE, said, “This is a kill-two-birds-with-one-stone kind of proposal that would both bring down Medicare as we know it and threaten the stability of the FEHBP. As for the senators’ notion that America’s seniors should be in the same health care system as America’s elected officials, they seem to have forgotten that starting in 2014, members of Congress will no longer be covered by the FEHBP but will be in state-based health care exchanges.”
