OPM has opened the door for FEHB carriers to propose new benefits that are not offset by cost reductions in the same plan option, an exception to its long-standing policy that additional benefits must be “cost neutral.”
OPM said that while cost neutrality remains a general principle, for plan year 2020 it will “entertain proposals that are not cost-neutral in the current year within a single plan option, if the carrier can show a strategy to achieve cost-neutrality within that option and eventual savings in the near-term future (i.e., within three years). In addition, we will entertain proposals to provide greater value to enrollees with Medicare coverage without concern for cost neutrality.”
Further, “carrier proposals may include benefit enhancements in one plan option that are offset by reductions in another of that carrier’s plan options to achieve cost-neutrality. Carriers must still maintain a meaningful difference between plan options,” it said in the annual “call letter” to insurance companies.
The call letter outlines the terms of the FEHB program for the upcoming calendar year and starts the annual process of negotiations between OPM and the carriers that results in the announcement each autumn of plan terms and premiums, followed by the open season for changing health insurance coverage.
OPM long has used the cost-neutrality requirement as one of its strategies to hold down premium increases in the program, but leading to complaints from some enrollees that the program is slow to add coverage for new developments in health care.
The letter also once again emphasizes other long-running strategies including controls on prescription drug costs—which make up 27 percent of total program costs—and incentives for enrollees to use healthy-living benefits. In the former category, for example, it tells them to renew their emphasis on using generic drugs rather than brand-name drugs, and to use less expensive options among high-cost specialty drugs. In the latter category, for example, it tells them to “re-invigorate messaging about the tobacco cessation benefit” and make clear that programs to quit e-cigarettes are covered; and to make sure they are consistently providing a list of preventive care benefits without out-of-pocket costs to the enrollee.
Other provisions of the letter include encouraging carriers to make mental health services more readily available, including through expanded tele-health services in areas lacking in providers and further restrictions on the dispensing of opioids.