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Does giving OPM health-care control make sense?

By Ed O'Keefe

Senate Democrats struck a tentative agreement Tuesday night to drop a government-run insurance plan from their health-care reform proposals.

One element of the compromise, as reported by The Eye's hardworking colleagues Shailagh Murray and Lori Montgomery, would be to create a program that would create several national insurance policies administered by private companies but negotiated by the Office of Personnel Management. If private firms were unable to deliver acceptable national policies, a government plan would be created.

Currently OPM oversees the Federal Employee Health Benefits Program (FEHBP), which provides health insurance coverage to roughly 9 million current and former federal employees and their families. Total 2009 premiums will be roughly $37 billion, according to OPM. The agency spent $29.6 million to operate the program in 2009 and employed 184 full-time workers to oversee it, OPM said.

Lawmakers will obviously tinker with the size and scope of what OPM does with health care. As colleague Ezra Klein described it, the final compromise is likely to emerge as "a private option with a public filter, essentially."

But giving OPM oversight of a new health-care plan sets it up for much more criticism and attention than it's accustomed to. OPM is a small but important agency with a limited focus and virtually no enforcement powers. The agency usually garners the attention of only a few lawmakers, the small but powerful federal workers unions and the inside-the-Beltway federal workers trade press (as well as a few national reporters, including yours truly).

The agency caused an uproar in the Fed community in October, when the agency announced that federal workers and retirees would pay on average 8.8 percent more in health-care costs in 2010. The costs will be even higher for more than half of FEHBP's members who are covered by Blue Cross/Blue Shield and will experience a 15 percent premium increase for singles and 12 percent jumps in family coverage.

Separately, OPM has earned (deserved) criticism for its oversight of a long-term care insurance program. Some members will soon experience a large rate increase for the program, despite marketing literature for the program that easily led many to believe there would be no increase.

Is giving OPM control of national health insurance a good idea? Leave your thoughts in the comments section below.

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By Ed O'Keefe  | December 9, 2009; 10:44 AM ET
Categories:  Health Care, Workplace Issues  
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While I think the basic concept may be a relatively acceptable alternative to a public option, I don't see how this can fall within OPM's bailiwick. As far as I am aware, OPM's only responsibilities relate to public employees. Giving them responsibility for a broader public health-care plan is liking sticking a donkey tail on a pig. It should be handled by HHS.

Posted by: francissheed | December 9, 2009 11:18 AM | Report abuse

Since it would be a clearinghouse for information to consumers, I think that it would be OK for OPM to have this role. It already has established metrics for comparing different insurance plans, as well as an online portal to access the information. Keeping DHHS focused on Medicare and Medicaid, the programs they administer, would be a better allocation of their resources - especially if Medicare is being expanded to age 55+.

Posted by: bandfriend | December 9, 2009 11:37 AM | Report abuse

The 8.8% premium increase is deceptive, as it is diminished by the HMO's and increased by the fee for service plans. The premium for my fee for service plan will increase 20% next year, and others like it will increase even more. OPM is definitely a paper tiger when it comes to negotiationg premiums with the insurers. Let OPM do its other civilian personnel stuff, but keep them out of the health plan business. That is not their specialty.

Posted by: AMorgen | December 9, 2009 11:40 AM | Report abuse

It's a stupid idea. OPM essentially operates as a clearinghouse that helps federal employees select among a plethora of healthcare plans and does the paperwork to garnish their wages, etc. Moreover, the federal government as an employer contributes a share of the cost of healthcare -- thereby reducing the cost of premiums. An outfit in this business has about as much expertise in creating and administering a new, unsubsidized health insurance system as the Redskins do. Congress would do better to have HHS put out an RFP for a non-profit agency to do the job.

Posted by: forrest1 | December 9, 2009 11:42 AM | Report abuse

@francissheed - Agreed, it sounds like it would fit nicely in HRSA or CMS.

Posted by: philip_s | December 9, 2009 11:47 AM | Report abuse

Giving this responsibility to OPM is bad policy, pewriod. By way of example, I am a federal employee with DOJ and I can't even get OPM to respond to me in a timely manner, using their forms, about buying back retirement time, let alone a straight answer on whether I can even it buy it back, although it's own regulations say I can. Get the picture? It's a relatively simple task for the federal government's HR "expert", wouldn't you think? And we want them to manage some version of a public option for healthcare for millions of Americans? I'll even put my name here in the remote possibility that somebody with a sense of responsibility in that agency will actually read this and respond to me. Don't tell me you can give me answer in 32 days to a simple request and months later I still hear nothing. So now imagine that scenario if you have a question about your health care coverage. You're on your own and good luck getting an answer, just like me.

Michael J. Harley

Posted by: pookiecat | December 9, 2009 12:47 PM | Report abuse

So in short this is a bandaid to fix a problem that won't be fixed through a fed agency that does not know how to even enforce their rules and lies to their policyholders to boot. Great, no wonder Lieberman still opposes it.

Posted by: iacoboni04 | December 9, 2009 4:33 PM | Report abuse

From my perspective, using OPM to administer the insurance exchange has the huge advantage of not having to create another government agency and piles of paperwork and rules. OPM sets the rules on the minimum conditions for participation by health insurers and handles the clerical duties of annually enrolling people in the plans they choose. They also are available as a final appeal body for disputes over coverage and reimbursements. The basis for their decisions are the official plan brochures that spell out what each plan covers and any limitations. But before an appeal goes to OPM, many of the plans available to federal employees are sponsored by postal unions or cooperatives such as Government Employees Health Insurance (GEHA) who contract with commercial health insurers to administer their plans. In those plans the sponsoring organizations are the first line of appeal.

Similarly, using Medicare as the "public plan" alternative to private insurance also eliminates the need for another new federal bureaucracy and its inevitable new paperwork and rules.

Posted by: BTMPost | December 9, 2009 7:39 PM | Report abuse

NO!!!!!!!!! OPM can't control costs now as mentioned in the article. The whole idea is to bring down the cost of health care, not increase it! DAH.

Posted by: Jimbo77 | December 9, 2009 7:45 PM | Report abuse

OPM did not do such a great job this year keeping health insurance rates down. The Blue Cross Blue Shield family option went up approximately 50 dollars per month, an increase of over 10 percent when the cost of living was negative. Furthermore, the rest of the plans had similar increases. So much for the argument of competition bringing the cost of heath care down.

Posted by: FormerNewYorkerNo9 | December 9, 2009 7:51 PM | Report abuse

R U kidding?!? OPM can't run anything! For example, try applying for a Federal job! It is an ancient morass that demonstrates a chronic inability to change for the better. It would be 1000% better to build a new Office from scratch.

Posted by: curtis789 | December 9, 2009 7:52 PM | Report abuse

An absolutely wonderful idea if done properly and extensively. In short, OPM must be given the authority (i.e., like SEC, FDIC, IRS) to negotiate rates, conditions and terms for the entire population so that the insurance received by the general population is the equal of that received by Federal employees and retirees. This "up front'regulation would totally negate the need for a public option at any time and given the extensive choices and completeness of Federal health
insurance, it would probably greatly scale back the need for medicare. Under this process, there would be no change for Federal employees and retirees; people who currently have no insurance or are self employed and subject to the whims and varagies of the private insurance market would receive identical insurance coverage to that of federal employees and depending on their income they would bear the entire cost themselves or receive subsidies (i.e., medicaid) to cover a portion of their premiums. People who currently
receive insurance from their employers would continue to receive their insurance in such a manner, except that OPM would do the negotiating for these employers, their employees would receive the same coverage choices as everybody else and their employers only responsibility would be to pay the "greately reduced premiums' for their employees either partially or in-full as they do now. Like uninsured or self employed people, the employees would received "medicaid" like subsidies depending on their income to help with premiums. In addition to providing top level health insurance for the total population (with the exception of illegal immigrants, as stipulated in both the house and senate bills)this process, as previously mentioned, could greatly scale back the need for anyone to have medicare, which would under these conditions largely duplicate the services already received. As an example, as a federal employee and now a retiree, I noted when I turned 65 and was required to take medicare coverage that very little changed (with the exception of the additional 'in-hospital' coverage I now receive as part of Part B) and things could be tweaked so that some health insurance options could cover everything that medicare does, making it optional instead of manditory and greately reducing its cost and impacting the national deficit and debt.

Posted by: ssuser | December 9, 2009 7:59 PM | Report abuse

The EPA is threatening to pass their own Global Warming Cap and Trade program if Congress doesn’t. So by giving the Office of Personnel Management the power to pass their own single payer program after the run off the private insurance companies by dictating what the can sell and for how much they can charge. The Tricks are in this new option by the Senate to hide the effects of this new deal. Nice try Harry Reid D-Nevada, lets see if this new dog has legs.!!

Posted by: bcooper530 | December 9, 2009 8:04 PM | Report abuse

The EPA is threatening to pass their own Global Warming Cap and Trade program if Congress doesn’t. So by giving the Office of Personnel Management the power to pass their own single payer program after the run off the private insurance companies by dictating what the can sell and for how much they can charge. The Tricks are in this new option by the Senate to hide the effects of this new deal. Nice try Harry Reid D-Nevada, lets see if this new dog has legs.!!

Posted by: bcooper530 | December 9, 2009 8:07 PM | Report abuse

This sounds like an excellent idea. Millions of Americans will be eager to sign up for this program. This will include all the people who will be kicked out of their employers' programs because companies would rather pay the 8% tax, and apparently most Washington Post readers who love big government as the answer to all problems. With 184 government workers to administer the program, it will be a great way to save money. And most of the people on the program will quickly realize what Democrat government run health care is like and they will finally realize what is going on in DC. Then they will know enough to vote the Democrats out of office and ditch the Democrat health care bills before they do too much permanent damage to our country.

Posted by: jazbond007 | December 9, 2009 8:17 PM | Report abuse

I have participated in the OPM health benefits program for 41 years. In my experience they do a fairly good job. I don't know if they negotiate the best deal but before I say they don't I would like to see some data that does an apples to apples comparison. They certainly offer a wide range of options which is a good thing. Each year I have an opportunity to change plans if I find a plan that gives me a better deal. Those who are opposed to allowing OPM to serve this role should provide some facts to back up their opinion. OPM would definitely have to strenthen their staff to take on this role but that is doable. It definitely cuts the legs out from under those critics of health care reform that says everyone should have access to the plan that congress has.

Posted by: cdierd1944 | December 9, 2009 10:07 PM | Report abuse

OPM is NOT up to this task !!!

1. I confirm what you have said in your article. "Separately, OPM has earned (deserved) criticism for its oversight of a long-term care insurance program. Some members will soon experience a large rate increase for the program, despite marketing literature for the program that easily led many to believe there would be no increase."

2. A Senate Hearing on OPM Management of the Federal Long Term Care Insurance Program was held. Eight Senators including Senator Collins stated that OPM had used "bait and switch" advertising...
or "false and missleading" advertising.
for a archived video or this Hearing. Listen to what the Senators themselves had to say.
IF OPM cannot run a ethical program for it's own Federal Employees, how can they be counted on to run a program for the entire nation's Health Care.

Posted by: harry_consumer | December 9, 2009 10:44 PM | Report abuse

Federal Employees and Federal Retirees
work for wages below what they could get in the private sector ( pay comparability)
in exchange for Benefits ( for example: vacation time, retirement and health insurance.

These benefits are earned !!!

Why should those who have not earned these benefits now lay claim to them in the form of the same Health Care Plan as Federal employees and Retirees ???

I take issue with what
SSUSER posted:
"terms for the entire population so that the insurance received by the general population is the equal of that received by Federal employees and retirees. "

Posted by: harry_consumer | December 9, 2009 10:57 PM | Report abuse

I also take issue with the statement from
SSUSER abobe
"Under this process, there would be no change for Federal employees and retirees;"

In the long run responsible Federal Employees and retiree, would end up subsidising those who are not able to get insurance currently.

Posted by: harry_consumer | December 9, 2009 11:03 PM | Report abuse

Agree with Francesheed above.

"OPM's only responsibilities relate to public employees."

OPM is the Federal Employees and Retiree's -- Personnel Office.

They should not take on the Functions and Responsiblities of HHS; in regard to providing services for the entire US Population.

They are barely able to perform the functions that they are currently charged with let along taking on a monumental additional function... alligned to serve and entirely different constituency.

Posted by: harry_consumer | December 9, 2009 11:10 PM | Report abuse

Second order consequences. How long will it take for the private citizen, covered by insurnce managed by OPM, to discover that the "same insurance available to the congress" is subsidized by the taxpayers, while the public citizen's coverage is not. How long then will it take for more taxpayer money to be allocated to "correct" that inequality.

Also, the most important phrase is the caveat that there will be a public option if the private insurance companies do not play ball with "affordable" premiums.

Posted by: coraltrace | December 10, 2009 11:01 AM | Report abuse

I think that the ego needs of a few Senators is more important than millions of Americans, would you agree ? So be it.

Posted by: truthhurts | December 14, 2009 8:40 PM | Report abuse

Lieberman who takes male prostitution to its naked level.
Allowing people younger than 65 to participate in medicare might infuse the system with cash.
I worked in management for 28 yrs. The people who scammed the system were not smokers,fat people. Employees who knew how to use the system were scammers. Employees who cared nothing that their workmates were doing double amount of work as they slipped in the bathroom, and had every part of their body under medical attention.
None of the scammers were smokers, fat people, or workers. Every office has about five scammers who think scamming is a good thing.

Posted by: JillCalifornia | December 14, 2009 8:54 PM | Report abuse

As if it weren’t enough to have it confirmed by numerous factual reports from sources such as the Congressional Budget Office, the Senate Budget Committee, the Joint Committee on Taxation, now we hear from the President’s own chief scorekeeper that passing the Reid health care bill would be worse than doing nothing.
The Chief Actuary of the Centers for Medicare and Medicaid Services (CMS), Rick Foster, issued a report last week concluding that the Reid bill would increase health care costs, threaten access to care for seniors, and force people off of their current coverage. In other words, the Administration’s own analyst conclusively demonstrated that the Democrats’ rhetoric does not match the reality of their bill. You can read the CMS report for yourself here.
In addition to this bombshell report from the Obama Administration’s experts, the Chair Of The President’s Council Of Economic Advisers admitted, “We are going to be expanding coverage to some 30 million Americans. And, of course, that's going to up the level of health-care spending. You can't do that and not spend more.” Additionally, Majority Leader Harry Reid is facing growing opposition to his bill from Members of his own party in the Senate. Below are a few recent comments by Senate Democrats regarding the Reid bill:
Sen. Jim Webb (D-VA): “{I’m} rather skeptical that those cuts {to Medicare} are sustainable . . . . I have a lot of concerns about Medicare. I think it’s important to express those views on these votes…I’ll see what the bill looks like when we get to the end of it.”
Sen. Claire McCaskill (D-MO): "We have to be saving more money for our government than we're spending. And if we're not saving more money for our government than we're spending, then not only will I not support it, the president said he won't support it."
Sen. Ben Nelson (D-NE): “I said I can’t support the bill with the abortion language that’s there.”
And according to the New York Times, Sen. Joe Lieberman (I-CT), said “that he would vote against the health care legislation in its current form.” According to the Times, “Mr. Lieberman told the Senate majority leader, Harry Reid, to scrap the idea of expanding Medicare and abandon any new government insurance plan or lose his vote.”
Harry Reid is certainly hearing from Democrat Senators about his health care bill. Maybe he should listen and kill the bill!

Posted by: atthun | December 14, 2009 9:36 PM | Report abuse

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