- The Washington Times - Tuesday, September 10, 2002

In the late 1970s one of the first American heart transplant procedures was performed in Kentucky on a retired federal worker from Indiana. He lived long enough to get a call of congratulations from President Carter. Shortly thereafter the ex-fed died.

So did his health plan.

It had been sponsored by the American Federation of Government Employees union, which is still going strong but without a health plan.

Health plans aren't charities. They need to make money. While the salaries of some CEOs of some fee-for-service plans and health maintenance organizations are obscene (and wrong), the bottom line is that health plans, to remain healthy, need more members who are well than they have members who are sick.

Half a dozen plans in the Federal Employee Health Benefits Program have left it. Most of the union-backed plans blamed Republican Presidents Nixon, Reagan or maybe even William Howard Taft for their demise.

In fact, the plans bit the dust because they had too few healthy policy-holders to permit them to pay bills and salaries and to stay in business.

Blue Cross-Blue Shield is threatening to leave the federal health program, but not for the usual money reasons.

It says it will leave if Congress forces it to adopt new accounting procedures it usually gets an annual waiver that would hurt the 95 percent of its business that is nonfederal. Experts doubt it is bluffing. They also doubt the pullout will happen.

Congress, specifically the House, must take positive action to force the Blues to adopt the new accounting procedure. If it does nothing which is what some critics think Congress does best the Blues wouldn't be required to make the accounting change and therefore wouldn't leave the program.

Heath plan choices

Even if Blue Cross pulls out, federal workers and retirees will still have plenty of choices. And nobody will be cut off.

Feds and retirees can pick from any of a dozen plans in the Washington area, including fee-for-service and HMOs. And they can't be rejected for any age or health reason.

While a number of HMOs are expected to leave the plan this year more than 100 have dropped out in the past three years a few new plans will join the federal program. That includes at least one new fee-for-service plan.

Everybody will have the chance to pick a health plan during the open season that runs from mid-November through early December. If you don't pick a plan you will be assigned to one. All the more reason to do some comparison shopping this year, especially because of the premium increases that are coming.

2003 pay raise

White-collar federal workers in the Washington-Baltimore area can probably expect a raise above the average 4.1 percent level Congress wants.

The White House has approved a 3.1 percent national adjustment (in lieu of the 2.9 percent originally proposed) and is likely to allocate the rest one percentage point of the congressionally-mandated 4.1 percent raise toward locality adjustments.

The locality raises would give feds in New York City, San Francisco, San Diego, New York City and Houston (yes, Houston) bigger raises than their civil servant counterparts in the Washington-Baltimore area.

By the same token, feds here would get bigger raises, probably more than the 4.1 percent average, than feds doing the same jobs in Huntsville, Ala., or Richmond, or Nashville, Tenn., or Austin, Texas.

The exact amount and the locality breakdown of the 2003 raises won't be known until late November.

Executive pay

There is a good chance that federal executives members of the Senior Executive Service and related levels at the FBI, the CIA and in medical jobs will get a 2.6 percent raise next January. Congress must lift some pay caps, which have resulted in seven out of 10 executives (regardless of job or rank) being paid the same $138,200 level.


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