Benefit Programs Largely Untouched

The White House budget proposes no significant changes to federal insurance or retirement benefits, although it did repeat a recent announcement that the Office of Personnel Management will ask Federal Employees Health Benefit program carriers to incorporate “health savings accounts” in their 2005 plan year offerings and that OPM is considering whether such a benefit can be added in 2004. HSAs, authorized by last year’s Medicare reform bill, offer tax-favored savings accounts for health care expenses to those under age 65 in high-deductible health insurance plans. Employee organizations have expressed concern that such options would draw away healthier FEHB enrollees, leaving higher premiums and/or lower coverage for the rest. The budget also repeats previous proposals to better coordinate Medicare and FEHB benefits and to “look to the practice of the private sector to ensure high quality, cost-conscious choices.” The budget assumes that retirees will get cost-of-living adjustments, projecting 1.3 percent in 2005, followed by 1.5, 1.8, 2.1 and 2.4 percent through 2009. Those are only projections, however; actual inflation determines COLAs.