Tuesday, March 15, 2011

Tuesday Tidbits

The House passed on a 271-158 vote a new continuing resolution (H. Joint Res. 48) to fund federal government operations until April 8. The Senate is expected also to approve the CR, and then we shall see whether a bi-partisan deal on the FY 2011 budget can be struck during the next three weeks. The Washington Post points out that this new "CR may also be the last, given the fraying support for short-term fixes among House Republicans, as well as from President Obama."  Politico reports that no budget deal is imminent.

The Congressional Budget Office published yesterday its periodic report identifying policy options available to Congress to reduce the deficit. As the Federal Times points out, one option that CBO presents is to give federal employees vouchers to pay for FEHBP coverage. Currently, the federal government contributes 72% of the enrollment weighted average premium capped at 25% of the selected plan's premium. Under the CBO option report, p. 37), federal employees and annuitants would receive  "a voucher that would cover roughly the first $5,000 of an individual premium or the first $11,000 of a family premium beginning on January 1, 2013." The idea would be to provide an incentive for FEHBP members to enroll for low cost plans that would be covered in full by the voucher or leave the FEHBP for the state health insurance exchanges created under the Affordable Care Act. The vouchers would increase by the overall inflation rate (the CPI-U). CBO projects $32 billion in savings from this approach over the period 2012 through 2021.

Other ideas include accelerating the implementation and expanding the reach of the high cost health plan or Cadillac plan tax imposed by the Affordable Care Act (increasing government revenues by $300 billion from 2012 through 2021, p. 195) and repealing the Affordable Care Act's individual mandate (saving the government $282 billion over the period 2012-2021, p. 199). The FEHBlog believes that any such acceleration and expansion of the Cadillac plan tax would drive employers to put their employees and retirees in the state health insurance exchanges. As a side note, Business Insurance reports that the federal goverment subsidy toward COBRA and TCC extension coverage cost the government over $34 billion.

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