Tuesday Tidbits

OPM's online organization chart has disappeared from its website, but a reasonable substitute can be found in the agency's online contact list.

Kaiser Health News offers an interesting article on a large scale allergy test for which Stanford charged a state employee patient over $48,000. The insurer paid around $11,000 to this in-network provider which left the patientwith about $3,000 in coinsurance. She was able to negotiate the coinsurance down to about  $1,500.  The article advises that

Insurers often tell patients to “shop around” for the best price and to make sure they choose in-network providers to avoid surprises. [The patient] did everything right and still got caught out. As a state employee, she had great insurance and Stanford was an in-network provider.  [The patient] said her doctor warned her the test would be expensive, but she never anticipated that could mean close to $50,000. So don’t be afraid to ask for specific numbers: “Expensive” and “cheap” can have hugely different meanings in the high-priced U.S. health system.

Well put.

Drug Store News tells us about a Walgreen's survey on American attitudes toward the flu shot. 70% of those survey plan to get the vaccination. Get a load of this though --

The survey also found that despite the severity of last year’s flu season — one of the worst in recent years — some 37% of respondents said they had gone to work while suffering from the flu. Additionally, 2-in-5 of those surveyed said they stay home to protect themselves from the flu.

No bueno.

To cap off cybersecurity month, the Department of Health and Human Services today announced  the official opening of the Health Sector Cybersecurity Coordination Center (HC3) at HHS headquarters in Washington, DC.  "The HC3’s role is to work with the sector, including practitioners, organizations, and cybersecurity information sharing organizations to understand the threats it faces, learn the bad guys’ patterns and trends, and provide information and approaches on how the sector can better defend itself."

Weekend update

Congress remains on the campaign trail this week.

Healthgrades created a national health index ranking major U.S. cities by factors such as access to care, population health, hospital quality, and local specialists. Rochester Minnesota is number one on the index. Healthcare Dive offers its analysis of the index here.

The Health Care Cost Institute created a healthy marketplace index. Healthcare Dive explains that the index "documents variations in healthcare prices across 112 metro areas in the United States found that overall prices are lowest in Baltimore, where rates were 33% below the national average in 2016, and highest in Anchorage, Alaska, and San Jose, California, where rates were 65% above the national average in 2016." Baltimore ranked fifth on the Healthgrades index.

The FEHBlog has been writing for the American Bar Association's health law section this year. Here's a link to his latest article on Association Health Plans.  The FEHBlog is pleased with the Administration efforts to give more healthcare choices to employers and consumers.

On the cybersecurity front:

• The Department of Health and Human Services Office for Civil Rights has rolled out a new version 3.0 of its information technology security assessment tool. 
• The Federal Trade Commission has released cybersecurity tools for non-profits and small and midsized businesses.

TGIF

On the surveys front --

• OPM released its latest Federal Employee Viewpoint Survey results yesterday. Federal News Radio offers a useful overview of those results here. 
• USA Today reports that the Blue Cross Blue Shield Association released "a first-of-its-kind metric for measuring Americans’ health from birth to age 64: The Blue Cross Blue Shield Health Index. The BCBS Health Index highlights which illnesses — from major depression to substance use disorder —are lowering the quality of life of people across the nation." Hypertension is the most predominant chronic illness affecting the U.S. population
• Health Data Management informs us that "Artificial intelligence, 3D printing and robotic surgery are among the up-and-coming technologies selected for the Cleveland Clinic’s list of the top 10 medical innovations for 2019." Keep your sunny side up. 

On the Rx front --

• The Centers for Medicare and Medicaid Services announced yesterday an advance notice of proposed rule making concerning a significant change to Medicare Part B drug pricing. Medicare Part B covers physician administered drugs, which often are the more expensive specialty drugs. According to CMS, "Overall savings for American taxpayers and patients are projected to total $17.2 billion over five years." The accompanying fact sheet explains that

The Medicare payment for separately payable Part B drugs is typically based on the average sales price (ASP) of a given Part B drug, plus 6 percent of the ASP as an add-on.  For the potential [International Pricing Index or] IPI Model, CMS is considering testing an alternative payment for included drugs that would apply when ASP is higher than an international price. Instead of paying based on ASP, CMS would pay for the drug based on a Target Price derived from international price index and designed to draw down Part B drug prices toward international prices over the course of the model. We estimate that relying on an international price index and setting a Target Price rather than using ASP would result in roughly a 30 percent savings in total spending for the selected Part B drugs in the model. 

CMS would phase-in this Target Price over five years of the model. CMS seeks comment in the ANPRM on several aspects of the model payment, including calculation of the target and the international pricing data.

The comment deadline is December 11, 2018. Most Medicare cost reductions shift costs onto FEHB and private sector plans unless they can implement the same approach.

• The Drug Channels blog tells us

This week, Express Scripts announced an innovative pharmacy benefit contracting model for members of the National Drug Purchasing Coalition (NDPC), a group of 18 large employers. Click here to read the fully-titled press release. You should pay close attention to this b.i.g. news. It is structured so that Express Scripts will not profit from the flow of funds from a brand-name manufacturer to a plan sponsor. What’s more, the PBM’s compensation will be fully delinked from drug list prices. Instead, Express Scripts will earn only fixed management fees plus additional at-risk compensation tied to clinical outcomes. 

Have a good weekend.

Midweek update

On the opioid front --

• The President signed the bipartisan opioid crisis response bill (H.R. 6) into law today. The wide-ranging laws focuses on illegal drug interdiction and treatment of opioid victims. 
• NPR reports that "The American opioid crisis is far from over, but early data indicate the number of deaths are beginning to level off, according to Alex Azar, secretary of the U.S. Department of Health and Human Services, citing 'encouraging' results in overdose trends."
• The Centers for Medicare and Medicaid Services announced "the Maternal Opioid Misuse (MOM) model, an important step in advancing the agency’s multi-pronged strategy to combat the nation’s opioid crisis. The model addresses the need to better align and coordinate care of pregnant and postpartum Medicaid beneficiaries with opioid use disorder (OUD) through state-driven transformation of the delivery system surrounding this vulnerable population. By supporting the coordination of clinical care and the integration of other services critical for health, wellbeing, and recovery, the MOM model has the potential to improve quality of care and reduce expenditures for mothers and infants."
• Health Payer Intelligence informs us that "Payers could improve outcomes, increase cost-effectiveness, and reduce opioid use for lower back pain by expanding non-pharmacological coverage such as physical therapy and chiropractic care, according to a new study published in JAMA Network Open."

Today, the Food and Drug Administration today approved for marketing the first new flu drug in 20 years.  The New York Times adds that 

The new antiviral, generically known as baloxavir marboxil but sold under the brand name Xofluza, is a single dose [pill] treatment [sold by Genentech]. It is for use only in those aged 12 or more, the F.D.A. said, and should be taken only in the first two days after symptoms like fever, aches and sniffles appear [similar to the existing flu drug Tamiflu].

* * * Xofluza works in a new way, by blocking an enzyme the virus needs to copy itself. So, at least in theory, circulating flu strains resistant to earlier drugs should not have any resistance to it. [That's the advance over Tamiflu.]

On the Affordable Care Act front --

•  [Yesterday] the Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of the Treasury (collectively, the Departments) issued new guidance so states can move their insurance markets away from the one-size-fits-all rules and regulations imposed by the Affordable Care Act (ACA) and increase choice and competition within their insurance markets. 
• Also yesterday, the ACA regulators issued a proposed rule that would permit employer funded health reimbursement accounts ("HRA") to be integrated with ACA qualified individual health insurance under certain conditions. Currently, under Obama era administration rules HRAs can only be integrated with ACA qualified group health coverage. The 21st Century Cures Act also permits small employers (under 50 full time employees as defined by the ACA) to create QSEHRAs that reimburse employees for individual health insurance premiums. From a 10,000 foot standpoint, the proposed rule would expand this opportunity to large employers. The public comment period on the proposed rule is December 28, 2018. The rule if finalized as proposed would take effect for plan years beginning on or after January 1, 2020. 

Here's a link to an interesting Healthcare Dive interview with AHIP's President Matt Eyles. 

Finally as this is the FEHBlog, here's a link to useful Reg Jones column from FedWeek on the relationship between FEHBP and Medicare coverage. Enjoy. 

 

Weekend update

Congress remains out on the campaign trail until November 13.

The FEHBlog described the U.S. Justice Department's approval of the CVS Health / Aetna and Cigna / Express Scripts mergers as a big step but not the final step because the companies still have to deal with state approval. The Hartford Courant reports that New York State is considering blocking parts of the CVS Health / Aetna merger. A final decision is due no earlier than October 26.

Medcity News offers an interesting report on how Blue Cross plans are addressing social determinants of health. For example Blue Cross Blue Shield of Kansas City is using Healthify's platform.  Healthify claims that it can "help healthcare organizations find community services, track social needs, and coordinate referrals with community partners to radically improve the health of the people we serve." Interesting.

Healthcare Dive reports that

•     A new Harvard University study casts doubt on the benefits of U.S. hospital accreditation by independent organizations.
•     Researchers looked at patient outcomes at 4,400 U.S. hospitals, 3,337 of which were accredited by the Joint Commission and 1,063 that underwent state-based review between 2014 and 2017. The study included about 4.2 million patients aged 65 and older who were admitted for 15 common medical and six common surgical conditions, as well as patients who completed the HCAHPS patient satisfaction survey.
•     While patients treated at accredited hospitals had slightly lower 30-day mortality rates than patients at state-reviewed hospitals (10.2% versus 10.6%), mortality rates for the surgical conditions were identical (2.4% versus 2.4%). Readmission rates for the medical conditions were significantly lower at accredited hospitals (22.4% versus 23.2%), but were slightly higher for the surgical conditions (15.9% versus 15.6%). The study was published online by BMJ.

Accreditation offers value to accredited bodies but it can't produce miracles. One of the most interesting studies that the FEHBlog noticed within the last year or so found that the 30 day period for readmission testing should be more like a week. After a week the hospital or health plan's responsibility for a readmission greatly diminishes. 

News and Views

Yesterday, the Office of Management and Budget ("OMB") released the Fall 2018 semi annual regulatory "and deregulatory" agenda. Here are a link to the Office of Personnel Management's (OPM) current regulatory plan which is not strong on de-regulation in the FEHBlog's view and a link to OPM's list of projected regulatory actions.

Govexec.com and Federal News Radio seek to read the tea leaves on the status of the Trump Administration's federal government reorganization plan as it impacts OPM. In the FEHBlog's view, an important factor is that OPM's acting director remains in charge of implementing the White House's government reorganization plan at OMB. The FEHBlog advises against underestimating Margaret Weichert.

The FEHBlog calls his readers attention to this wide ranging Medpage Today interview with Barbara McAneny, MD, American Medical Association president, and a practicing oncologist/hematologist in New Mexico. Very illuminating.

In other views

• Fidelity Investments offers ideas about how to use health savings accounts over the years. People need education about how to use HSAs.
• Employee Benefit News discusses the current state of implementing bundled payments.
• Healthcare Dive reports on a recent AHIP conference discussing the role of government in healthcare.  
• Health Data Management talks about the importance of personalized incentives in healthcare. 

In other news

• Sen Claire McCaskill (D Mo.) issued a press release on a fascinating Senate Homeland Security and Governmental Affairs Committee report on another shameful episode in the opioid crisis. From the executive summary -- 

During the height of the prescription opioid crisis in the United States [beginning in 2012], Insys Therapeutics, Inc., adopted and intensified sales and marketing techniques Purdue Pharma pioneered in the 1990s for OxyContin and applied them to Insys’ powerful fentanyl drug Subsys. Like Purdue, Insys aggressively used speakers programs—in which the company paid physicians to discuss Subsys with colleagues—and compensation programs for sales representatives to boost sales for Subsys.

• Beckers Hospital Review and Fierce Healthcare offer interesting reports on this week's United Healthcare report on third quarter earnings.  Grabbing the FEHBlog's attention is the news that United plans to roll out its own electronic health record next year and that Optum has acquired another specialty pharmacy.
• Health Affairs blog discusses a new Senate bill combatting the scourge of surprise billing. 

Tuesday Tibits

Washington Post columnist Joe Davidson had an interesting column yesterday on OPM acting director Margaret Weichert's first week in office.

Also yesterday, the HHS Secretary Alex Azar unveiled a proposed rule that would require televised prescription drug advertisements to include a textual description of the drug's list price. Health Payer Intelligence offers a useful overview of the healthcare industry's mixed reaction to the proposal. The FEHBlog thinks that it would be a win for the consumer if the price posting requirement reduces the number of prescription drug ads on TV.

Speaking of advertising, the FEHBlog read a Wall Street Journal article early last month about a California government public nuisance action against Sherwin Williams and other companies that had manufactured lead paint. Part of the evidence was advertising from over a century ago. The defendants had asked the U.S. Supreme Court to review the adverse California state court judgement against them. On Monday the Supreme Court declined to review the judgment.  Governing discusses the Supreme Court's action here. The lawyers suing the prescription opioid drug manufacturers under this public nuisance doctrine were invigorated by the Supreme Court's action.

In other litigation news, the U.S. Justice Department announced that it is prosecuting a $1 billion healthcare fraud case the involves compound drug manufacturers and a rogue telemedicine company. Blue Cross of Tennessee allegedly got whacked for $174 million by the fraud.

Healthcare Dive reports that Anthem wrapped up the litigation over a 2015 data breach by agreeing with settle with the HHS Office for Civil Rights for a $16 million HIPAA privacy and security rule fine. On Friday November 2, a panel of the U.S. Court of Appeals for the D.C. Circuit will hear over argument concerning an appeal of the district court' decision in OPM's favor in a case seeking to hold OPM accountable for its 2015 data breach.

Finally closing a loop on the opioid crisis response bill, Willis Towers Watson reports that the conference report that both Houses of Congress passed last month did not extend (from 30 to 33 months) the period of time during which primary private sector health plan responsibility for end stage renal disease is primary to Medicare. That hideously expensive pay go was included as a pay-go in the House version of H.R. 6.

Weekend update

The Week in Congress reports that both houses of Congress have left Capitol Hill for the campaign trail. A lame duck session will begin on November 13. 

Last Friday, the Centers for Medicare and Medicaid Services announced traditional Medicare participant premiums and cost sharing amounts for 2019. 

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.   

The standard monthly premium for Medicare Part B enrollees will be $135.50 for 2019, a slight increase from $134 in 2018. An estimated 2 million Medicare beneficiaries (about 3.5 percent) will pay less than the full Part B standard monthly premium amount in 2019 due to the statutory hold harmless provision, which limits certain beneficiaries’ increase in their Part B premium to be no greater than the increase in their Social Security benefits. 

CMS also announced that the annual deductible for Medicare Part B beneficiaries is $185 in 2019, an increase from $183 in 2018 

Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment. 

The Medicare Part A inpatient deductible that beneficiaries will pay when admitted to the hospital is $1,364 in 2019, an increase of $24 from $1,340 in 2018. 

The statutory hold harmless provision referenced about applies to FERS annuitants but not to CSRS annuitants (unless a CSRS annuitant receives Social Security benefits from non-federal employment.

A few weeks ago the FEHBlog noted a Wall Street Journal article about clauses in large health care system contracts with health insurers that impinge competition. The Senate Judiciary Committee chairman Sen. Chuck Grassley (R IA) has asked the Federal Trade Commission (FTC) to investigate these allegations. Healthcare Dive predicts that

If the FTC were to conduct an investigation, it  could send chills through the hospital industry. Vertical integration is rampant in healthcare, and a number of health systems have established their own health plans. This could create more suspicion around such arrangements and increase the push for greater price transparency. 

Beckers Hospital Review explains how primary care doctors are responding to the millennial generation's preference to use walk-in clinics. Health plans should reinforce member's use primary care doctors who track their patient's care.

Good news --

• Kaiser Health News gathers new articles reporting that premiums for the most popular plans are dropping on the federally facilitated health insurance exchanges for 2019. 
• The American Hospital Association informs us that the Centers for Disease Control are finding that hospital infections are continuing to decline.

Federal retirement COLA news and other reports

Govexec.com reports on the federal annuitant cola of living adjustment announcement made today.

The 2.8 percent increase applies to retirees under the Civil Service Retirement System. Those under the Federal Employees Retirement System will receive 2 percent. FERS employees only receive the full percentage increase if it is less than 2 percent. If the change is 2 percent to 3 percent, FERS retirees get 2 percent. And if the increase is 3 percent or higher, FERS retirees receive 1 percentage point less than the full increase.

The new COLAs will take effect starting with federal retirees’ December 2018 benefits.

Federal News Radio reports that OMB Deputy Director Margaret Weichert is taking on her new part time job as OPM acting director with gusto. Govexec.com adds that

Weichert said OPM is moving forward on its reorganization plan, and has already taken steps on the administration's proposal to consolidate background checks within the Defense Department and to move many of OPM's transactional functions to the General Services Administration. She pledged to push forward the plan to fold what remains of OPM into the Executive Office of the President in the White House, a key point of tension between the administration and Pon [according to Govexec.com]

“Independence [of OPM] if it’s not delivering the actual mission, isn’t of the primary concern,” Weichert said, adding that there is “no better place” for the strategic direction of federal personnel issues than the White House. She explained that Trump asked her to serve as acting director in part because she has “a lot of experience in delivering complex, large organizational change.”  

That reorganization plan also would move the FEHBP and other federal benefit operations to GSA.

The FEHBlog was taken by this Weichert observation from the Federal News Radio article:

Though Weichert said she and OPM were celebrating and acknowledging the 40th anniversary of the civil service reform law, today’s federal workforce has outgrown the statutes and provisions that informed the 1978 act. * * *

“Although incredibly well-intended, all of the original components of Title 5 and updates to it since then were well-intentioned, but layers and years of statute and added regulation have made it very complex and very cumbersome to operate nimbly and agilely in the 21st century,” Weichert said.

Amen to that. In the FEHBlog's view, the same problem afflicts the FEHBP even though the nearly sixty year old original law was the model of simplicity.

Midweek update

Govexec.com has offered its version of the backstory on OPM Director Pon's departure from the agency last Friday. His departure, in stark contrast to U.N Ambassador Nicki Haley's departure yesterday, was not graceful. The Govexec.com article notes that "Multiple individuals confirmed that senior aides to Pon were also removed from OPM, including his chief of staff and his confidential assistant." In support of this assertion, the FEHBlog found that the online OPM organization chart is "under maintenance."    

OPM today posted on its homepage an October 4 statement from then Director Pon applauding “No Time to Wait: Part 2”, a report recently released by the National Academy of Public Administration."

In Part 2 builds on the framework of Part 1 with a more-detailed plan of action to transform the public service:

• Build flexibility in the pursuit of mission.
• Replace the over-defined job specifications of the current system with a competency-based, talent-management model.
• Reinforce the pursuit of merit-system principles.
• Lead from the center.
• Transform the federal government’s human capital backbone.

Federal News Radio reports on a speech by OMB Deputy Director and OPM acting Director Margaret Weichert made earlier today.  In the course of this speech, Director Weichert

outlined some of her top priorities in the new role [at OPM]. “There’s a lot that I need to get from a baseline perspective, but what I did tell the team yesterday is I have two primary areas of focus,” the President’s Management Agenda — particularly building the  workforce of the future — and general management * * *.

Not much difference between the Pon and Weichert messages. The FEHBlog suspects that the Administration wants speedier implementation.

Also today, the U.S. Justice Department announced that

it is requiring CVS Health Corporation (CVS) and Aetna Inc. (Aetna) to divest Aetna’s Medicare Part D prescription drug plan business for individuals in order to proceed with their $69 billion merger.  The proposed divestiture to WellCare Health Plans, Inc. (WellCare), an experienced health insurer focused on government-sponsored health plans, including Medicare Part D individual prescription drug plans, would fully resolve the Department’s competition concerns.

This is a big step forward but not the final step as CVS and Aetna are working on wrapping up loose ends with state regulators as discussed in this Healthcare Dive story.  The FEHBlog expects that both the CVS - Aetna and Cigna - Express Scripts mergers will close as planned later this year.

OPM and the Department of Health and Human Services are encouraging federal employees and annuitants and their family members to get a flu shot this fall as FedWeek reports. Here's a link to HHS's website with details on the flu shot and how to get the vaccination.

In Affordable Care Act news:

• Fierce Healthcare reports that insurers and trade associations are rolling out association health plans. 
• Politico reports that the Senate rejected an effort to overrule the Trump Administration's shot term health plan rule. The rule still faces court challenges.

The FEHBlog personally supports both the association health plan and the short term health plan rules because American consumers should be able to exercise product choice. One size does not fit all even in healthcare. 

Weekend update

Here's a link to the Week in Congress's report on last week's activities on Capitol Hill. Countable tells us the Senate remains in session this week. The House is out on the campaign trail.  The Supreme Court will have a full bench of nine justices when it returns to hearing oral arguments on Tuesday after the Columbus Day holiday tomorrow. 

The Federal Times, Govexec.com and Federal News Radio have articles on OPM Director Pon's surprise departure from the agency last Friday.  Federal News Radio provided a link to the White House announcement which reads as follows:

President Donald J. Trump today announced his intent to designate the following individual to a key position in his Administration: 

Margaret Weichert of Georgia, to be the Acting Director of the Office of Personnel Management.  Ms. Weichert currently serves as the Senate-confirmed Deputy Director for Management at the Office of Management and Budget in the Executive Office of the President.  She will assume the Office of Personnel Management duties in addition to her current duties at the Office of Management and Budget.

Earlier this decade, when the Obama Administration and Congress forced out the OPM Director Archuleta in the wake of the massive OPM data breach, President Obama reassigned Beth Cobert from OMB to serve as acting OPM Director. It was the first time that the Administration had filled an OPM Director vacancy with an OMB official. However, in the case of Ms. Cobert's appointment, OPM lacked a deputy director who would be the logical person to serve as acting director. In the case of Ms. Weichert, the Administration went to OMB rather than designate the sitting OPM Deputy Director Michael Rigas. The FEHBlog here is making an observation, not seeking to draw any conclusion.

Happy Columbus Day, all.

OPM Director Changeover

If the FEHBlog had a Drudge like siren, he would use it here. According to FedScoop, the White House announced that "The Trump administration designated [OPM Deputy Director] Margaret Weichert to take the helm of the Office of Personnel Management as acting director, replacing Jeff Pon after just seven months." Ms. Weichert will bold both positions for the near future. The Washington Post adds that "people close to Pon said he was at odds with the administration over its planned revamp of the personnel agency, which would have diminished his role and authority."

Opioid Crisis Response Law Enacted

Medpage reports that the Senate today easily passed the bipartisan opioid crisis response bill (H.R. 6)  thereby sending bill to the President to be signed into law.

Some of the provisions in the bill, which the House passed last week, include:

• Giving Medicare beneficiaries more information on alternative pain treatments, and expanding treatment options for enrollees who are addicted to opioids, while expanding treatment options for opioid-addicted beneficiaries.
• Partially repealing the the Medicaid Institutions for Mental Diseases (IMD) exclusion, which will allow state Medicaid programs to cover inpatient treatment in residential facilities.
• Allowing mothers undergoing addiction treatment to have their young children stay with them, and increasing accessibility of family residential treatment programs, which allows more parents to get help while still caring for their children in a supervised setting.
• Requiring state Medicaid programs to have safety edits in place for opioid refills, to monitor concurrent prescribing of opioids and certain other drugs, and to monitor antipsychotic prescribing for children.
• Directing the Centers for Medicare & Medicaid Services to issue guidance to states on options for providing services via telehealth that address substance use disorders under Medicaid.
• Accelerating the development and use of drug management programs for at-risk beneficiaries within the Medicare program by mandating that all prescription drug plans use such a program by 2022.
• Requiring FDA to develop evidence-based opioid analgesic prescribing guidelines for the indication-specific treatment of acute pain.

FEHBP Family Options -- continued

Readers may have noticed that according to press reports, that the average government contribution toward FEHBP coverage increased by 1.2% for 2019. The FEHBlog noted yesterday that the maximum government contribution increased by 0.3% for self plus one coverage and 0.7% for self and family coverage. The increase for self only coverage was 0.4%. So the maximum government contribution increase was under 1%. How then is the government contribution increasing by 1.2%? The government contribution toward FEHB coverage is 72% of the enrollment weighted average capped at 75% of the selected plan's premium. Consequently, if a plan's premium is below the maximum government contribution (and many are), the federal government picks up 75% of the any increase in the premium of an under the max plan. Those under the max plan increases account for the average 1.2% increase in the government contribution.

You also many wonder why the FEHBlog is so confident about the fact that before the introduction of the self plus one enrollment level for 2016, the average self and family contribution for FEHBP coverage was 2.3 to 2.4 times the self only contribution. The FEHBlog is confident because back in 2015 he was doing the math to figure out how FEHB plans stood in relation to the ACA's zany Cadillac tax thresholds. The FEHBlog calculated that the ACA's threshold for other than self and family coverage is 2.7 times its threshold for self only coverage. As a result, FEHB premiums for self only coverage tend to be bumping up against the Cadillac tax threshold while other than self only thresholds tend to be comfortably below the Cadillac tax threshold. And that my friends is what you get with an arbitrary law like the ACA's Cadillac tax. 

In any event, FEHBP premium changes are looking better than other large employers according to today Kaiser survey.

Finally, while the FEHBlog believes that adding a self plus one tier to the FEHBP was unnecessary, he is a big fan of consumer choice so let's see what happens over time. 

Tuesday Tidbits

Yesterday, the U.S. Government Accounting Office released a report on postal retiree health benefits. The office's conclusion is as follows:

About 500,000 postal retirees receive retiree health benefits. The Postal Service Retiree Health Benefits Fund pays most of the costs. 

The Postal Service has not made $38.2 billion in required payments to this fund through fiscal year 2017. If it makes no more payments, the Office of Personnel Management projects the fund will be depleted in fiscal year 2030. 

We highlighted several approaches to address this shortfall, such as requiring most eligible retirees to participate in Medicare, increasing cost-sharing, or reducing benefits. 

Congress should consider legislation to put postal retiree health benefits on a more sustainable footing.

Congress had been considering such legislation until the President decided to create his own Postal System Reform Task Force last April. The Task Force report was timely delivered to Congress in early August. Hopefully the President will get the reform ball rolling again in time for the lame duck session of Congress in November.

Mergers and acquisitions tidbits:

• United Healthcare, according to Bloomberg, acquired Genoa Healthcare, a large chain of pharmacies that operate out of mental health and substance use disorder facilities.  
• Healthcare Dive reports that the two largest health systems in Texas -- Dallas based Baylor Scott and White on the one hand and Houston based Memorial Hermann Health System on the other -- have a sign a letter of intent to merger their companies. "  Combined, the two would operate 68 hospitals, two health plans and more than 14,000 affiliated physicians" in the Lone Star State. 

Miscellaneous tidbits:

• Beckers Hospital Review provides interesting perspectives on savings that telehealth can generate. 
• The Health Affairs blog discusses recent and ongoing court decisions concerning the ACA's individual non-discrimination provision known as Section 1557. With far sighted thinking from the carriers, the FEHBP has been able to avoid this ACA litigation trap.
• The International Foundation reports that the IRS has finalized the 2018 IRS forms used to report compliance with the ACA's individual and employer shared responsibility provisions -- Forms 1094-B, 1094-C, 1095-B, 1095-C and related instructions. The International Foundation site also links to those forms and instructions 

FEHBP Family Options

If you find yourself scratching your head about the small gap between self plus one and self and family premiums in the FEHBP, please bear in mind that before Congress added the self plus one option self and family premiums were only 2.3 to 2.4 times self only premiums on average. Because of its older demographics, FEHB family sizes have been and remain relatively small. In other words, there really was no need to create the self plus one option (an OPM actuary told me that in 2009), the self plus one choice is there.

Also remember that the full premiums for self and family always are larger than the full premiums for self plus one. However, because OPM calculates the government contribution using a method required by law (enrollment weighted average), the larger government contribution for self and family may cause the enrollee contribution for self and family to be somewhat less than the employee contribution for self plus one for the same plan and same option.

For 2018 the government contribution for self and family increased by 0.7% (seven tenths of one percent) while the government contribution for self plus one increased by 0.3% (three tenths of one percent). This outcome unfortunately compounds the "flip flop" problem. If you did not face this problem for 2018, please check your plan's 2019 premiums. If you do face this problem for 2019, simply change to self and family during Open Season.