Posts Tagged ‘Office of Personnel Management’
Health Care News
Thought the “public option” was dead? Think again. Chief among the most dangerous provisions in Obamacare is the creation of government-sponsored national health plans, which are, in effect, another embodiment of the public option.
Through its multi-year implementation, the law steadily evolves into a national single-payer health care system.
Here’s the background: In 2014, the Office of Personnel Management (OPM), the small agency that runs the federal civil service, will administer at least two nationwide health plans to compete against private insurance. OPM will be responsible for negotiating the new health plans’ medical-loss ratio, profit margins, and premiums.
The OPM-sponsored plans will automatically qualify to compete against private health plans in the new state exchanges and thus will not be subject to the same qualifications and standards outlined in Obamacare for private plans in the exchanges. OPM must contract with an already existing large insurer, because such a plan must be offered in 60 percent of states in year one.
Health Care News
The public option has reared its head once again. Last week, H.R. 5808 was introduced in the House Ways and Means Committee to add a public option to the Patient Protection and Affordable Care Act (PPACA).
The plan would be administered by the Secretary of Health and Human Services. Payment rates for providers would be set at Medicare rates plus 5 percent and would grow according to increasing physicians’ costs. The plan would be required to maintain solvency, so premiums would have to cover benefits offered and administrative costs.
Momentarily setting aside the major drawbacks of a public plan, this legislation isn’t necessary—the PPACA already lays the groundwork for a robust public option. The new law will allow the Office of Personnel Management (OPM), which currently oversees federal employees’ health benefits, to administer plans in the exchanges. These plans would be offered by private insurers but run by unelected government officials. (more…)
Health Care News
Like many federal efforts in Washington, last week’s reintroduction from House Democrats to create a public health insurance option, which would become part of the 2014 insurance exchanges created by Obamacare, is a bureaucratic redundancy. Stuart Butler points out that the health reform law already has its own “public option” through expanded powers to the Office of Personnel Management (OPM).
Calling the House bill a “smokescreen” for the nation’s opposition against a public option, Butler says the real story is in the “OPM alternative.” “Far from being an alternative, it is the fast road to a public plan — as I warned before the legislation passed. Why? Because the ‘alternative’ gives the OPM the power to establish national plans. These are to be private — but in name only.”
With “enormous reserve powers,” the federal government would be able to set premiums that would drive other private health insurers out of the market, leaving Americans with no choice but to enroll in the government-mandated health plan.
Health Care News
While Congressional leaders are feverishly plotting to jam the hugely unpopular Senate health bill through the House of Representatives the moment Speaker Pelosi thinks she has the votes, House liberals are also tinkering around with the Federal Employee Health Benefits Program (FEHBP). This is the program that covers federal workers and retirees; it is a consumer-driven program of competing private health plans. Through more regulation, Congressional liberals would like to make it look a lot more like Obamacare.
Historically, the success of the FEHBP as a consumer-driven and competitive system of private health plans has been largely attributable to its wide range of personal choice, relatively light regulation, and the hands-off approach the Office of Personnel Management (OPM) in its administration. That can change, of course, depending upon who is running the White House.
Health Care News
Amidst all the intense speculation about quickly passing the President’s health care agenda through the Budget Reconciliation process before the Easter Recess, ordinary Americans should remember one thing: the House of Representatives must first pass the 2,700-page, $2.5 trillion, Senate health bill. So, the next big step in the national health care debate is floor action in the House of Representatives, where House Speaker Nancy Pelosi must round up at least 216 votes.
Heritage analysts have conducted some extensive research and analysis of the provisions of the giant Senate bill. If the House passes the Senate bill and it goes to the President’s desk for signature, it then would become the law of the land. For all intents and purposes, the legislative debate would then be over.
Regardless of Administration or Senate leadership promises to “fix” the new law (the Senate bill) through the Budget Reconciliation process, there are no guarantees. Any “fixes”– if they did come about — would have to survive another round of Senate floor action. So it is worth recalling what the Senate bill would mean for Americans were it to become law. (more…)
Health Care News
In the wake of widespread public backlash over his eleventh-hour deal to get increased federal taxpayer Medicaid funding for his vote, Sen. Ben Nelson (D-Neb.) has been hitting the media circuit, assuring reporters that he won’t vote for any merged health care bill that funds abortions with taxpayer dollars or has a government-run health insurance plan.
“There is zero chance (of a public option),” he said to The Chadron Record. “I’ve made it so clear. It isn’t going to happen.” But Sen. Nelson has already allowed a “public option” to flourish by voting for the Senate version last month.
Medicare, for example, is the quintessential public plan. Instead of the Medicare bureaucracy contracting with private carriers to provide health coverage, as it does today, the latest Senate bill turns that responsibility over to the Office of Personnel Management (OPM), the agency that runs the federal civil service and the popular Federal Employees Health Benefits Program (FEBHP). Under the Senate bill, OPM would sponsor two “multi-state” health plans —one of which must be nonprofit — to compete against private plans in the country.
In other words, there could be health plan competition on a national level in every state, but only the federal government would field these national health plans. These government-sponsored health plans would have an exclusive franchise: No private health plans would be able to compete in the same way as the selected health plans sponsored by OPM. In effect, the Senate bill creates a set of “public options” that are thinly disguised as private health plans.
In the ongoing attempts of Congress to find an alternative to the “public plan” in health reform, the Senate bill includes a provision to give the Office of Personnel Management (OPM), which oversees the Federal Employee Health Benefit Program (FEHBP) a new role: sponsoring health plans to compete against private health plans in every state in the nation. Heritage expert Ed Haislmaier has studied the provisions responsible for this new role for OPM, and finds that OPM’s new power would go well beyond its current capacity and allow for the creation of a de facto public option.
As Kay Cole James, a former director of OPM, points out the FEHBP works because OPM plays the neutral role of an umpire: federal employees choose the private plan they like from a wide variety of different plans, all of which compete against each other to attract the most enrollees. The federal government provides its employees with a defined contribution towards their health costs, and it doesn’t micromanage their choices. OPM allows variety and flexibility in the program, and limits its regulatory role to ensuring consumer protections. Majority Leader Harry Reid’s (D-NV) proposal would have OPM sponsor new multi-state plans. OPM would set the premiums for plans it sponsors.
This new role for OPM is the Senate alternative to the House passed “public option”. But ordinary Americans should be leery of the difference. According to James, “this arrangement seems to be a “public option” in “private” option disguise… Because OPM would not merely serve as the umpire overseeing competition among private health plans. It would also become a health-plan sponsor, fielding its own team of players to compete against the existing private plans in every state.”
Given this new role, OPM could engineer a crowd out other private insurers in the market. Furthermore, Section 1334 of the Senate health care bill allocates “such sums as may be necessary to carry out this section”. If the OPM-sponsored health plans were not profitable, it is thus conceivable that the taxpayer could end up footing the bill. This, along with the federal power to set rates and benefits, could easily end up as the public option that Senate liberals envisioned all along.
Says James, “OPM’s job is to serve the federal civilian work force and its retirees, while enforcing merit principles in hiring and stopping prohibited personnel practices. It’s not OPM’s job to compete against private health plans.” The best features of the FEHBP- broad consumer choice and intense Multi-plan competition, free of heavy regulation and massive bureaucracy, and governed by approximately 80 pages of statutory text- are worthy of replication. Giving OPM the power to sponsor “multi-state” health plans in competition against the private sector is not the same thing.
Health Care News
Although the details have not been released, Majority Leader Harry Reid (D-NV) has floated yet another potential “compromise” to his health care bill. There appear to be two broad elements: a federal insurance plan run by the Office of Personal Management and a Medicare buy-in option for Americans over 55.
Don’t Be Fooled. There is nothing new or original about these ideas. Both these policies have been recycled from previously failed efforts. Senator John Kerry’s (D-MA) health care proposal from his 2004 failed Presidential bid included a federal plan run by the Office of Personal Management (OPM). The Medicare buy-in was proposed by President Clinton in 2000. Those ideas were bad when they were introduced and are no better today.
– New Federal Insurance Plan. The compromise proposal appears to envision giving the Office of Personal Management the authority to contract with a private, non-profit to administer a special federal health plan. There are several key problems with such an approach. First, running a stand alone health plan, in effect, a public plan for the entire nation, will undoubtedly result in higher taxpayer costs. In other words, the size of government, once again will grow. Taxpayers can expect new demands for funding. Second, if OPM was given broad power to negotiate and determine services, benefits, premiums, etc., this federal plan would be no different than the older version of the “ public plan” that so many are bitterly opposed to; merely because the public plan is ”private” in name only doesn’t change a thing. Finally, shifting this public plan option to OPM means the Director of OPM could end up as the ultimate health care czar, reporting directly to the President.
– Medicare Buy In. The compromise proposal suggests allowing individuals 55 to 64 to “buy-in” to the Medicare program early. This too has multiple problems. First, opening Medicare will lead to selection issues. As CBO points out, enrollees would likely be higher users of medical services which would be reflected in higher premiums. To address this, the government may likely subsidize these enrollees, adding more cost to the taxpayers. Second, it would also likely create a crowd-out effect, where the government buy-in option squeezes out the availability of private coverage, including retiree coverage from a former employer. Finally, Medicare is already fiscally unsustainable. This solution would only accelerate its doom.
– Medicaid Expansion. While reports claim that the idea of expanding Medicaid even further beyond what is currently in the bill appears to be off the table, it should be noted that while the Senate bill includes a Medicaid expansion to 133% FPL, the House bill goes much further, raising eligibility to 150% FPL. Therefore, an even bigger Medicaid expansion may not be a dead deal.
Still Plenty Wrong With The Bill. Regardless of the merits of Majority Leader Reid’s latest attempt at a compromise, there is plenty wrong with the Patient Protection and Affordable Care Act — massive consolidation of regulatory authority over health care to the federal government; unintended consequences of the employer mandate; constitutional concerns over the individual mandate; inequities created through the subsidy structure; massive Medicaid expansion; Medicare “savings” shifted out of Medicare; and a flood of new taxes that impact Americans regardless of income — to name just a few.
Health Care News
Details are diabolical. Very soon, the fine print of the latest Senate scheme on the government-run health plan will be unveiled. If the Senate leadership has its way, the newly hatched “compromise” on the “public plan” will move quickly by the fleeting light of day toward passage.
In their relentless drive to overhaul one sixth of the American economy, Senators are obviously making it up as they go along. In the latest desperate search to find some form of government-run health plan to compete against private health plans that is somehow acceptable to Senate liberals and moderates alike, the Senate Democratic leadership is entertaining the idea of stripping the existing “public option” from the big Senate health bill (H.R. 3590), and replacing it with a combination of public options: an OPM/FEHBP sponsored plan (that will be “private” in name only) and an expansion of the two giant — and financially troubled or debt ridden — Great Society entitlements: Medicare and Medicaid. If the original idea of the public option was to keep costs down, As its champions have tiresomely insisted, a proposal to expand Medicaid and Medicare is curious to say the least: Both are major drivers of the health care spending curve upwards — well into the stratosphere.
More Debt. Medicare and Medicaid expansions are nothing new. The latest proposal to expand Medicare, a program for senior and disabled Americans, down the age scale was proposed by the Clinton Administration in the late 1990’s, after the collapse of its 1,342-page health care bill. The same proposal is under consideration now, expanding Medicare to cover people between the ages of 55 and 64 years of age. Depending on how the amendment is written, this could jump start a massive enrollment of the Baby Boom generation before 2011, when the first wave of Boomers is set to retire. No details are available, nor is there any kind of cost estimate. Medicare already has a long-term debt of $38 trillion.
Higher State Costs. A major Medicaid expansion is already embodied in both the House and Senate bills. The Senate bill would expand Medicaid up the income scale to 133 percent of the federal poverty level, and the House bill would expand it to 150 percent of the poverty level; in both cases there would be massive erosion of private health insurance among families in these income categories. Which is the key point, apparently. For those who are enrolled in it, Medicaid delivers poor quality care compared to private health insurance. But Senate liberals are undeterred, and the issue of poor quality is rarely even discussed in the largest of the government’s health programs. Of course, the problem with the massive Medicaid expansion is that it will also add to the already burdensome Medicaid costs on the states.
More Central Control. The more interesting element of this proposal is the creation of an “FEHBP Plan” administered by the Office of Personnel Management (OPM). OPM is the agency that runs the popular and successful Federal Employees Health Benefits Program (FEHBP) that covers members of Congress and federal workers and retirees. There are no details about any of this yet, beyond some discussion of broad concepts in the media. However, it appears that under the Senate Democrats’ compromise proposal, OPM would be given authority to contract with private, nonprofit insurers (such as Blues and Kaiser) to compete in the federally designed health insurance exchanges that would be erected in each of the states under the Senate bill. It appears that the government would sponsor certain favored health plans to compete against the private health plans in the states. It is not clear how a restricted set of plans would add much to competition or to expand personal choice of benefits, particularly if the benefits are politically standardized.
The key question is what authority OPM would have in the negotiation of rates and benefits, and in the financing and the administration of the program. These details are crucial. If OPM were given absolute authority to set premiums and benefits, it could conceivably set premiums below the market prices, thus undercutting private health plans on an un-level playing field, leading to the kind of erosion of private health coverage that was envisioned under the “robust” public plan favored by the Left. If it sets rates and benefits on the basis of the market rates, of course, it would fail to achieve the Left’s goal of a “robust:” administered pricing system, a central rationale for the public plan in the first place. But, of course, that could change over time. The key issue in health care policy is the infrastructure of power and control; the levers of power and domination, additional staff and funding, can be always added later, especially if an artificially low priced, government-sponsored health plan (or plans) starts to run deficits.
Meanwhile, consider the existing power of OPM. Under current law, the Director of OPM has plenary authority in negotiating rates and benefits with private health plans, a vast authority repeatedly upheld by the federal courts. The OPM Director reports to only one person: The President of the United States. If the goal is for government to dominate the health insurance markets through the creation of a new “public option” — private health plans that are private in name only — the end result could be a national health insurance market literally run out of the West Wing of the White House.
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