Posted: 6:22 p.m. Wednesday, April 10, 2013
By Phil Galewitz
Two of the nation’s leading forces in health insurance - UnitedHealthcare and the Blue Cross and Blue Shield Association - will face off Thursday before a Congressional subcommittee in a battle for control of the $47 billion program that covers 8 million federal employees, retirees and their families.
UnitedHealthcare said it wants Congress to change the language of a 1959 law that it says gives the nonprofit Blue Cross and Blue Shield plans too much power to dominate the Federal Employees Health Benefits Program (FEHB). The Blues now cover almost two-thirds of the people in the program. UnitedHealthcare says it’s fighting for the change so it and other insurers can more easily compete for the business. United Healthcare is one of the nation’s largest private health insurers.
The Obama administration, in its fiscal 2014 budget proposal released Wednesday, said it favors allowing more plans to compete to cover federal employees. The Blues are fighting the change, saying there is already sufficient competition with 230 plans participating in the program.
The hearing is being held by the House Oversight and Government Reform subcommittee led by Rep. Blake Farenthold, R-Texas. UnitedHealthcare and the BCBS Association, a trade group representing Blues plans across the country, are the only two insurance groups testifying. An official from the American Federation of Government Employees, one of the largest federal labor unions, is also scheduled to testify.
A June 2012 Health Affairs article said that in areas of the country with multiple health plans competing, premiums were more than 10 percent lower compared to areas of low competition.
UnitedHealthcare and the Obama administration are expected to argue that opening the system to more regional health plans would spark greater competition, which would hold down premiums. Others may say the FEHB already offers federal employees enough choices and that it has done well at controlling costs.
Blue Cross Blue Shield offers two national preferred provider or PPO options to FEHB members, which cover 62 percent of enrollees. A PPO plan gives members an economic incentive to use certain providers but does not block patients from getting care outside of its networks.
The next largest plan by enrollment is the Government Employees Health Association (GEHA), which is also a national PPO plan. The GEHA plan covers approximately 7 percent of all FEHB members.
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.