Coming soon to your 8 million-member group health plan: The long-sought (by some, long-dreaded by others) self-plus-one option.
Most people have hailed the pending change to the Federal Employee Health Benefits Program as a giant leap forward. A badly needed premium break for families consisting of only two people. But some warn it could create problems — in the form of higher premiums — for current, and future retirees.
When it is implemented, possibly in time for 2015 coverage, traditional couples, same-sex couples and other families of two will be able to get coverage by paying premiums that, presumably, will be lower than the traditional FEHBP family plan, and higher than a self-only plan. The operative word is “presumably”.
The impact of self-plus-one premiums on the FEHBP is yet to be seen. The impact of a third level of coverage, self-plus-one, on the concept of a “group” plan is also hard to predict.
Group health plans are a great deal for some people, less so for others. In most instances, older people pay lower (in some cases much lower) premiums than they would if they had to get stand-alone coverage. Closing that gap is one of the goals of the Affordable Care Act.
The best part of the group plan, for the older-less-healthy is the group rate. Typically, the healthy subsidize the not-so-well. Getting young people to sign up for health insurance is a critical component of the Affordable Care Act. The goal of the ACA (Obamacare) is that 38 percent of those who sign up will be in the younger cohort. So far, only about 24 percent of the new enrollees are in their mid-30s or younger.
Because it’s a group thing, in plans like the federal FEHBP the young are expected to subsidize the old. The idea is that the young will someday be old and less healthy, when younger premium payers will subsidize them.
In a group plan, older people subsidize, to some extent, younger people with babies and growing kids. Or with birth-control assistance, which is not much needed by the 60-something crowd. Singles subsidize married couples. Couples without kids subsidize large families.
The idea behind a group plan is that everybody is family. Young people get older. Healthy people get less healthy. Those who don’t need drugs now probably will someday. Everybody is in the same lifeboat — one for singles the other for families which is two or more people.
Many groups that represent federal and postal workers support the self- plus-one concept. In an era when union membership is declining in most areas, federal and postal unions are hustling to convince new, younger hires that they should be members. One of the questions potential members should ask is if the organization recruiting them pays (like the federal government) the lion’s share of the health premium, and offers a self-plus-one option to its employees and retirees. And if not, why not?
While many applaud the self-plus-one option, some say it not a good idea for the group plan. Among them is Walton Francis, author of Consumers’ Checkbook Guide to Federal Health Plans. Francis was a long-time (now retired) HHS official and is considered the leading expert on the FEHBP plan.
Last month, we asked him about the pending new option. As usual, he didn’t pull any punches.
“Enacting this thing was nuts,” he said. “It may be something that will be ‘scored’ as saving money artificially (but not real savings). … But it cannot actually save real money.”
Francis said his full views were stated in an article he wrote for “NARFE Magazine” (published for members of the National Active and Retired Federal Employees) last summer. Then he added that “If the self-plus-one option is offered and does not in fact provide a significantly better deal for the actual self plus one, then no one will enroll, and it will save zero — even artificially.
“I do not think it can possible offer a better deal to anyone unless it is somehow restricted, e.g., to employees but not retirees. I would add that whether or not this option is ever created it will save zero dollars to the FEHBP program as a whole. The same people will be incurring the same medical expenses. It cannot possibly save the government money unless it costs enrollees more. It cannot possibly save enrollees money unless it costs the government more. So any alleged “savings” to the government will necessarily be at the expense of other enrollees (larger families, or retired couples) who pay more in premiums.
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