A House postal reform bill (HR-5719) that would remove postal employees and retirees from the general FEHB population “would affect how health care is provided to all federal annuitants and employees,” the Congressional Budget Office has said.

The CBO analysis is the first official assessment of the impact of splitting the pool of FEHB-covered persons as proposed in that bill, which has cleared the committee level in the House. That committee vote is considered a major step toward postal reform since the issue has languished in the House for many years. A Senate bill similar in many ways has bipartisan support; although time is fast running out for further action this year sponsors believe momentum is building for eventual passage.

The bill would create a new “Postal Service Health Benefits” program similar to the FEHB, with premiums based on the expected health care costs of only those USPS employees, annuitants and dependents who participate in the program; as with the FEHB, premiums for postal employees and annuitants would be the same for a plan. Meanwhile, premiums for those remaining in the FEHB would be based only on that population. CBO projected that those premiums would decrease somewhat “because nonpostal enrollees cost FEHB plans slightly less than postal enrollees, on average.”

Also under the bill, postal retirees would be required to enroll in Medicare Part B (covering physicians and related services) when eligible at 65, and plans in the new postal health program would have to participate in Medicare Part D (prescription drugs). The result would be to shift some of the costs of postal retirees onto the Medicare program, with the result that “PSHB premiums for postal employees and annuitants would be lower than the FEHB premiums those people will face under current law.”

However, at the same time, because postal retirees would be compelled to enroll in Medicare, all would have to pay its premiums, adding a new cost for those who otherwise would not have paid them.

The CBO cost estimate did not translate the potential impacts of those moving pieces into dollar terms for individuals.