Thursday Thoughts

The FEHBlog was stunned to read in Health Payer Intelligence that "PwC’s Health Research Institute (HRI) predicted a six percent increase in medical cost trend in 2020, with a five percent net growth rate after adjusting for increased employee cost sharing or altering of benefits." Wow.

The FEHBlog was prompted by a pop up notice on his computer to look into a new arrangement between Amazon and Rite Aid drug stores. The FEHBlog thought that the deal concerned PillPack. However, it turns out according to TechCrunch, that Rite-Aid agreed to allow Amazon to place its new Amazon package pickup service called Counter in one 100 of their stores, at least to start.

The FEHBlog ran across a press release confirming that UnitedHealth's Optum unit has closed on the acquisition of DaVita's Medical Group with the exception of Davita's Las Vega's doctors who wound up with Intermountain Healthcare at the direction of the Federal Trade Commission. It's an interesting trend that large insurers are rapidly expanding into providing healthcare. Whether intended or not, such a move is necessarily a hedge against a Medicare for All bill passing in the next decade that would kill the U.S. private health insurance market.

Federal News Network reports that the House Oversight and Reform Committee beat OPM like a drum again today over the President's reorganization plan. One of the Committee's takeaways is that

Stephen Billy, OPM Deputy Chief of Staff, testified that his agency could not provide a legal analysis of the Administration’s plan to abolish an agency that provides health care and benefits to more than 8 million people because it does not exist. This makes it clear that the Administration has no idea whether its actions related to eliminating OPM are legal, and proves that the Administration’s plan is reckless and ill-conceived.

The Administration never intended to abolish FEGLI, FEHBP, FEDVIP, etc. and the reorganization would not kill those programs. The Administration intends to transfer these functions to GSA and send the policy work to OMB.  Similarly, and for many years, federal government procurement policy is set in OMB and the contracts are created and administered in the agencies principally GSA. No doubt this particular OPM-GSA transfer requires Congressional action. But it's not reckless or ill-conceived. Acting Director Weichert sought bipartisan legislation to iron out the fine points.

Today, according to the Wall Street Journal, the House relented from its position and passed a Senate bill on emergency appropriations for the Mexican border. Does the FEHBlog think this means that eventually the House will accede to a Senate appropriations bill that adopts the Administration's reorganization plan for OPM. No way. The FEHBlog does not think that anyone in Congress wants to expend political capital on this issue. (as opposed to making political hay on it which is happening now) He does think that this development means that it's more likely that the bipartisan Senate bill to lower healthcare costs (S. 1895) will become law this year (see PwC report above).