Federal Employee Health Benefit Plan - Key to Reform Deal?

The Senate majority leader, Harry Reid, Democrat of Nevada, named 10 senators — five centrists and five liberals — to seek a compromise. Under a leading proposal, the federal Office of Personnel Management would negotiate with insurers to offer one or more national health plans to individuals, families and small businesses. The personnel office has decades of experience arranging health benefits for federal employees, including members of Congress.

Robert Pear and David Herzenhorn, “Push for Deal on Public Health Plan, New York Times, December 6, 2009

The introduction of the Federal Employee Health Benefit Plan as a bargaining chip in the Senate negotiations to pass a reform bill before Christmas sounds logical to me. The Democrats – liberals, centrists, and conservative – might like it because the federal government’s Office of Personnel Management has run it for nearly 50 years; the Republicans might like it because it consists of competing private plans across state lines; and the public might buy it because it would offer similar benefits that Congressmen and Senators enjoy. Only the single-payer enthusiasts would object because private plans and competition are involved.

Ordinarily I don’t repeat past blogs, but here is what I said last September. Please note I said what is good for the Government Goose is good for the Public Gander. This now strikes me as an apt metaphor because if the Democrats don’t pass something that appeals to the public, their domestic Goose may be cooked come November 2010.

THURSDAY, SEPTEMBER 3, 2009

Why Not FEHBP? What's Good for the Goose is Good for the Gander

The major sticking point of the health care debate appears to the “public option.” The liberal Democrats can’t live without it, and the Republicans can’t live with it.

My question is: why not open the Federal Employee Health Benefit Plan (FEHBP) to every one, rather than remaining stuck on the public option?

FEHBP has been operating successfully since 1960, covers 9 million people, has lower costs than most private plans, and offers a choice of 283 competing private plans - HSAs with high deductibles, FFS, HMOs, and PPOs.

Furthermore, FEHP cannot exclude people with pre-existent illness, rescind policies of those who become sick, or discriminate on basis of age and sex.

FEHBP is, in essence, a health exchange open to 9 million permanent government employees, government retirees, and, perhaps most importantly from the political point of view, to Congressmen and elected government officials.

It seems to me the public would welcome such an option. After all, what’s good for the goose – their congress persons and their senatora – ought to be good for the gander – the great American public.

The only objection I can think of is that FEHBP is a government program run by efficiently by the private sector. But most of the other elements necessary for compromise – affordability, choice, insurance reforms, portability across state lines - are there