Sunday, April 05, 2015

Happy Easter

Congress will be out of session in the coming week just as it was last week.  Congress resumes its session on April 13. Govexec.com recounts what's happening with the budget process as it impacts federal employees, the FEHB and other federal retirement programs. The House plan would tie the government contribution to the rate of inflation (CPI-U) which is recently has been lower than the currently used enrollment weighted average, among other changes. The Senate report simply directs the Senate Homeland and Government Affairs Committee to "Improv[e]" the program to "help make it more efficient and affordable for hardworking taxpayers."  Both resolutions pay deference to the 2010 Bowles-Simpson deficit reduction report which the President requested but largely has ignored. Bowles-Simpson made the following FEHB recommendation:
The Commission recommends transforming the Federal Employees Health Benefits (FEHB) program into a defined contribution premium support plan that offers federal employees a fixed subsidy that grows by no more than GDP plus 1 percent each year. For federal retirees, this subsidy could be used to pay a portion of the Medicare premium. In addition to saving money, this has the added benefit of providing real-world experience with premium support [to use with Medicare].
Note to the Commission (which the FEHBlog first made back in 2010) the FEHBP already is a defined contribution program because the government contribution is capped at 25% of the plan's actual premium. The enrollee always pays at least 25% of the premium. If the plan's premium is above the 25% cap then the enrollee's share is proportionally higher.  GDP plus 1 sounds like a better deal than an unadjusted CPI-U, but it's clear that Congress wants federal employees to be incented to enroll in lower cost plans (just like the ACA's Cadillac tax).

Modern Healthcare reports on the trend among health care systems to start their own local insurance plan in order to obtain Medicare and health insurance marketplace dollars directly.  Modern Healthcare also offered an interesting interview with a healthcare executive on this topic. Here's the quote that grabbed the FEHBlog's attention -- "Insurance "carriers simply do not wish to share [savings} with us. They say, “We love how you all are providing care, the quality is outstanding and the cost controls are wonderful. You just keep doing what you're doing. You're making us lots of money. We'll stay under fee-for-service.” This strikes me as nonsense. Insurers are seeking to bend the cost curve down and in any event are subject to a strict medical loss ratio.

Finally apropos of Friday's discussion about telemedicine, the Wall Street Journal reports that health care providers in the U.S. are starting to use pre-surgical techniques - common in Europe - that help patients bounce back faster from surgery and lower costs.  Why did this change take so long? Europe also was a decade ahead of us on approving biosimilar drugs.

1 comment:

Sean Alacchi said...

David: I'm passing along a well written piece on the "Cadillac Tax"
that came from POLITICO this morning. I thought you'd find it interesting.
http://www.politico.com/story/2015/04/obamacare-health-care-cadillac-tax-116659.html