12/8/09: In the last few days proposals have surfaced in the Senate debate on health care reform that would make OPM the administrator of nonfederal enrollee health plans as part of a “public option.” While NTEU is in the process of assessing that proposal, the Union has taken immediate action to make Senators aware of our opposition to opening up the FEHBP program to nonfederal enrollees should that possibility come under discussion. In a letter to all senators, NTEU National President Colleen Kelley said, “I am writing to support the continued integrity of the Federal Employees Health Benefits Program (FEHBP).”  Click here to review the letter to all Senators on this issue.

She added: “We want to emphasize our position in favor of maintaining the current FEHBP, with its own risk pool, as a program designed principally for federal and postal employees and retirees.” With more than eight million enrollees, FEHBP is the nation’s largest employer-sponsored health program; it is administered by the Office of Personnel Management (OPM), and is an important recruiting and retention tool for federal agencies.

President Kelley noted that during the ongoing Senate debate over reform of the nation’s health care system, various proposals have surfaced that would open up FEHBP to non-federal, non-postal enrollees. “Any merging—or opening up—of FEHBP now or in the future to additional groups of enrollees would amount to one employer-sponsored plan essentially subsidizing other groups of employees,” Kelley wrote. “NTEU would oppose opening up FEHBP to additional groups without separate risk pools.”

Kelley emphasized the strong support of the union and its members for significantly expanded access to affordable health care, but noted that introducing a large group of individuals to FEHBP—where premiums are based on usage—would likely lead to increases in the cost of premiums for federal enrollees with no accompanying increase in benefits.

“While we strongly support efforts to provide health coverage to all Americans,” she wrote, “federal employees and retirees should not be singled out to subsidize that effort. The cost of increased coverage should be broadly and fairly distributed.”

On a related matter, President Kelley told senators that while NTEU has not yet taken a position on suggestions that responsibility be assigned to OPM to operate any public option that might be created by health care reform, such a decision clearly would require that OPM have additional resources to meet any such added duties.

And on the issue of instituting an excise tax on insurance plans to help fund reform efforts, the NTEU leader expressed the union’s concern that such a tax—no matter the threshold at which it is set —likely would have a serious adverse impact on FEHBP enrollees. “The most likely outcome,” she said, “is that insurance companies would either reduce coverage and plan benefits or pass along the costs of the tax to those covered by FEHBP in the form of increased premiums.”