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Expert's View

FEHB--Self Plus One?

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On April 11, Joseph A. Beaudoin, president of the National Association of Federal Employees and Retirees, testified before the House about the Federal Employees Health Benefits program. Among the topics on which he touched was the possibility of creating a "self plus one" enrollment category in the FEHB program.

Because his comments were brief and cogent, I'll let Mr. Beaudoin speak for his organization.

"Currently, FEHBP enrollees belong to one of two categories: self or self and family. This means a family with three or more members pays the same premiums as a two-person household. The idea of creating a 'self plus one' category, as is available in the federal dental and vision plans, has been circulating for years.

"In the past, NARFE has been skeptical [about] establishing a self plus one enrollment category, as it threatens splitting up the risk pool and potentially leading to higher premiums for plans that cover a high percentage of older participants with higher average health costs.

"However, while federal annuitants who are not covered by Medicare Part B are the most costly to insure, the average cost of insuring annuitants with Medicare Part B coverage is lower than the average cost of covering active employees. In other words, self plus one may provide a more affordable option for retirees, which NARFE would support.

"Nevertheless, OPM should provide adequate data and assurances that premiums and other out-of-pocket costs for two person households would decline with the establishment of a self plus one category. NARFE would have serious concerns if federal retirees on fixed incomes would be forced to pay more for the same coverage if this category is established."

Amen to that! I share Mr. Beaudoin's concerns. Furthermore, I wonder if the splitting of such a large risk pool wouldn't work to the disadvantage of some groups within it. Call me an old fuddy duddy, but I was raised on the belief that the best way to secure lower premiums on average was to keep a risk pool as large as possible. That's why I have long believed that there should be only one enrollment category.

For those who want to split the risk pool, their argument is that it would be fairer. What they really mean is that it would lower their premiums. No one ever wants change, no matter how fair, that would cost them more.