Behind feds' health premium changes

Wednesday - 9/28/2011, 7:49pm EDT

Your Turn with Mike Causey

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By Jolie Lee
Federal News Radio

Federal employees will pay an average of 3.8 percent more in health premiums next year. That's far less than the 7.2 percent average increase feds faced this year.

Given that health care costs are a problem "we haven't quite licked in this country," the Office of Personnel Management should get credit for tamping down the rise in premium costs, said Federal Times writer Steve Losey, in an interview with Your Turn with Mike Causey.

Feds can expect "no real overall huge changes, but there are minor tweaks" to the plans, Losey said.

Part of the reason for the lower 2012 increase is OPM's focus on generic drugs.

"Prescription drugs are a growing and large chunk of the cost of premiums, and it's something critics have said OPM should focus more on," Losey said.

OPM has encouraged plans to offer generic drugs.

The agency also proposed buying prescription drugs directly from a pharmacy benefit manager. It estimates that would save $1.6 billion over the next decade. But OPM would need Congress to pass a law allowing it to conduct negotiations, part of the agency's request in its 2012 budget proposal.

What will also help with costs is several name-brand drugs coming off of their patents next year — meaning cheaper, generic versions will be available, Losey said. Some of those medications include Lipitor, a cholesterol-lowering drug; Avandia, a diabetes drug; and Lexipro, a drug to treat depression.

OPM also is putting more emphasis on preventative and wellness programs. Blue Cross Blue Shield will offer health club membership at a cost of $25 for initiation and $25 per month.

An increase in younger enrollees may have helped lower costs as well. A new law last year extended the age to 26 for dependents for health care coverage, adding about 280,000 young people to FEHBP.

These young people "don't get sick a whole lot, they don't have a lot of medical conditions," Losey said. "The thought was getting more of them on the rolls would help bring health care down."

Losey said he asked OPM about the effect of the addition of the younger enrollees. The agency dismissed that as a a reason for the slowing growth of feds' health care premiums because there was "no real evidence," he said.

In the first half of the show, Mike talked to Steve Bauer, executive director of the Federal Employees Education and Assistance Fund, about what the feds-helping-feds charity had to deal with this year, and the help it gave furloughed FAA workers.