A sign in some veterinarians’ offices goes something like this:
I agree to get a dog but it has to sleep downstairs.
Ok, the dog can sleep upstairs but not in the bedroom.
Ok, the dog can sleep in the bed but only on your side.
Ok, the dog can sleep on my side but only at the bottom.
I’m getting the dog his own pillow. This one’s not big enough for both of us.
That kind of progression is commonly heard whenever anyone talks about “reforming”—and you know what that word means—the FEHB program’s benefits, such as the continued eligibility in retirement with the same employer contribution toward premiums as for current employees.
Every time a proposal is made, there is a chorus of “That will never happen because . . .” and then follows a string of confident statements.
The first is that members of Congress would never vote for that change because they are under the FEHB program too. You still hear that one even though that hasn’t been the case for several years. The Affordable Care Act (Obamacare) specifically excluded members of Congress and certain of their personal staff members from FEHB eligibility. That was a move by Sen. Charles Grassley, R-Iowa, to compel members of Congress into the same insurance system as members of the public and to bear the same cost.
OPM under the Obama administration however managed to find (or create) a loophole. It said that affected congressional members and staff could keep the employer subsidy they had while in FEHB if they enrolled in a particular ACA plan for small businesses allowing for such a subsidy. That in turn required OPM designating Congress as not one entity but as hundreds of small businesses: each member’s office has a small number of employees, and each member operates independently of the others, therefore . . .
Whatever you think of that pretzel logic—and Republicans have taken steps including holding up OPM nominees over it and OPM’s refusal to spell out a justification—the fact remains, members of Congress are not in the FEHB.
The second line of argument is that while private sector companies have been cutting back on health insurance coverage, that has been a phenomenon of smaller companies and the federal government should be compared only to the largest companies.
A recent GAO report—which looked at trends in employer-sponsored health care as part of an analysis of financing for Postal Service retirees—did find that the larger the company, the greater the percentage of companies in that category offer retiree health benefits. However, it cited a study finding that even among companies with at least 5,000 employees, that was only 35 percent; for those between 1,000 and 5,000 it is 18 percent and for those with between 200 and 1,000 it is only 9 percent.
And of companies that do offer retiree health insurance, it said, many have tightened eligibility criteria—for example, by discontinuing that benefit for those hired after a certain date—and/or have changed the benefit structure—for example, by paying a fixed dollar amount toward retiree premiums rather than a percentage.
That same report also shows little support for the third argument, that while the private sector has been cutting back on those benefits, government is different. Said GAO, “Based on multiple reports and experts, nearly all state governments continue to offer retiree health benefits to at least some state government retirees but generally have shifted some costs from the state to retirees and/or active employees in various ways.”
They did that by—you guessed it—tightening eligibility criteria and/or changing the benefit structure.
“Between 2000 and 2015, more than a dozen states changed the minimum age or the number of state service years required for retirees to be eligible for health benefits. During that timeframe, at least 10 states adopted formulas for prorating benefits that required different premium-sharing amounts based on years of service, or altered existing prorating formulas, bringing the total to 31 states that used prorating in 2015. At least 5 states stopped making any contributions to health premiums for certain retirees,” GAO found.
If those concepts followed by the private sector and other levels of government sound familiar, they should: all of them have been proposed for the FEHB in recent years.
They haven’t happened. If you feel confident that means they never will, maybe you just got the dog.