Beware a Public Health Plan in Private Disguise

Kathryn Nix / January 06, 2010

In the ongoing attempts of Congress to find an alternative to the “public plan” in health reform, the Senate bill includes a provision to give the Office of Personnel Management (OPM), which oversees the Federal Employee Health Benefit Program (FEHBP) a new role: sponsoring health plans to compete against private health plans in every state in the nation.

As Kay Cole James, a former director of OPM, points out in a recent op-ed, the FEHBP works because OPM plays the neutral role of an umpire: federal employees choose the private plan they like from a wide variety of different plans, all of which compete against each other to attract the most enrollees. The federal government provides its employees with a defined contribution towards their health costs, and it doesn’t micromanage their choices. OPM allows variety and flexibility in the program, and limits its regulatory role to ensuring consumer protections. Sen. Reid’s proposal would have OPM sponsor new multi-state plans. OPM would set the premiums for plans it sponsors. (more…)