GAO has found no “clear consensus” about the potential effects of widening the range of choice in the FEHB program, for example to add regional preferred provider organization plans, which would be a different type of fee for service plan than what is now authorized.
A report noted that for years, OPM “has proposed that its contracting authority be expanded to allow a greater variety of types of health plans to participate in FEHB than are currently allowed.” In interviewing experts inside and outside the government, though, GAO said that while there was general support, there was also concern about “program instability and higher premiums.”
“Estimates by OPM and others differed significantly on whether the expansion would increase or decrease costs. This is because they used differing assumptions about premiums, enrollment, and other factors, and it is unclear whether the assumptions used in these estimates will be realized,” it added.
Further, it said that even within the current structure there is “significant variation in the plan designs” providing enrollees with a range of choice.
It added that while the number of HMOs has decreased over the last decade, the number of plans available to enrollees also has been increasing as HMO plans expanded their coverage areas. From 2007 to 2015, the median number–the point where half are above and half are below–of plan offerings available in a county increased from 19 to 24 (consisting of 19 nationwide plans and five HMOs). Over that time the number of counties without any HMO plan offerings available declined from 18 percent to less than 2 percent; on the other end, one New York county has 15 HMOs in addition to the 19 national offerings.
However, GAO said, at the same time enrollment has become more concentrated rather than less–the median share of enrollment held by the largest carrier in a county increased from 58 to 72 percent–calling into question whether having more competing plans would drive down premiums.