FEHBP Prescription Drug Spending

The Federal Times reports that the House Federal Workforce Subcommittee of the Oversight and Government Reform Committee will hold a a round table discussion on how to control FEHBP spending on prescription drugs. The article states that "Prescription drug costs make up nearly 30 percent of FEHBP premiums." That sounds right but it does not consider the demographics of the FEHB Program. The Program covers over 2 million annuitants and many of those annuitants have primary Medicare coverage for hospital expenses. This older population (even the active employees in the FEHBP tend to be older) heavily utilizes prescription drugs and what's more the percentage of prescription drug expenses is further inflated by the fact that Medicare picks up a good chunk of hospital expenses.

Prescription drugs do benefit the health of all Americans, including me. Nevertheless, twenty years ago a health plan member would have to keep track of his drug store receipts and then submit them to the plan for 80% major medical coverage. Many of those receipts never were submitted - the so-called shoebox effect. Then the prescription drug card came along in the 1990s and every prescription became a claim. That change likely improved the health of plan participants. It certainly increased plan costs. There's no quick fix. Good luck to the round table participants.