- The Washington Times - Monday, June 12, 2006

The cradle-to-grave federal health care plan, which also covers members of Congress and family members, is the best in the nation.

It offers a variety of plans, options and premiums, and Uncle Sam picks up an average of 72 percent of the total premium.

Feds and retirees, regardless of age, health status or pre-existing medical conditions, can switch plans or options every year without any gaps in their coverage.

The Bush administration thinks it can make the Federal Employees Health Benefits Program (FEHBP) even better for both consumers (feds and family members) and taxpayers. The improvement appears to come from the option of setting up pretax-funded health savings accounts and the option to reduce premiums by enrolling in plans with high-deductible coverage.

Backers of high-deductible coverage argue that the plans will cut costs to taxpayers because premiums will be lower, and feds will be more careful in shopping for and using health care.

Opponents, led by the National Active and Retired Federal Employees (NARFE), use the same arguments to say the high-deductible program is bad medicine for most of the 9 million people covered by the federal health care program.

A study by the Government Accountability Office shows that of the small number of feds who have opted for high-deductible coverage, the majority are younger, healthier and better-paid than the average fed or retiree. If that trend continues, NARFE and others warn, it could result in what is called “adverse selection.”

That is splitting enrollment in the federal health care program into two camps: the young-healthy-wealthy portion of the work force in high-deductible plans and the not-so-young, not-so-healthy, lower-income workers remaining in other plans. That, they say, could drive up premiums for the latter group.

Meanwhile, the administration has proposed legislation that would allow Blue Cross Blue Shield, the largest plan in the program, to offer health savings accounts as one of its options.

Whatever happens to the FEHBP down the road, the fact that it covers active and retired members of Congress ensures that its exemplary coverage will continue.

Pay raise on track

The January federal/military pay raise is on track. Remember two numbers: the 2.2 percent raise that the White House wants and the slightly larger 2.7 percent that a bipartisan bloc in Congress wants. Congress has one-upped the White House for the past dozen years.

Regardless of the final number, Washington area feds are likely to get more. That’s because the raise would include a locality pay component that could drive the final amount to 3 percent or more.

Last year, the result was a national federal pay raise of 3.1 percent. The inclusion of locality pay produced a 3.44 percent raise for the 300,000-plus civilian feds in the Washington-Baltimore area and a 3.1 percent raise for military people based here.

Federal/military retirees

There is less nail-biting for this group because they don’t have a dog in this traditional fight between the White House and Congress.

Cost-of-living adjustments, by law, for fed and military retirees and recipients of Social Security are based on the rise in living costs. It is measured by one of the Consumer Price Index components. With months left to go in the COLA countdown, the retirees are already assured an increase next year of at least 2.3 percent.

• Mike Casey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or [email protected]

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