Federal Employees Health Benefits Program (FEHBP)

Monday February 9, 2009

The Federal Employees Health Benefits Program (FEHBP), which currently covers eight million active and retired federal employees and their dependents, is the nation’s largest employer-sponsored health insurance plan. Together, taxpayers and federal employees paid private insurance companies $34 billion in FEHBP premiums last year, a price that does not include the additional enormous out-of-pocket charges paid exclusively by enrollees and their families. The program is routinely held up as a model for national health care reform, and a means to expand coverage to the currently uninsured. Additionally, some have suggested its use as the “public plan” option in Senator Obama’s national health care policy. FEHBP was also the template for the 2003 legislation that established the Medicare prescription drug coverage. Those who must rely upon FEHBP for health insurance know its flaws well, and consider it anything but a model.

In the last eight years, average premiums have risen by 69.3%, far faster than the average growth of national health care costs during the same period. During this time, in addition to out-of-control premium increases, FEHBP participants have suffered:

Increases in out-of-pocket costs,
unpredictable reductions and shifts in covered benefits from year to year,
the sudden disappearance of popular plans (in the 2007-08 cycle, 14 plans dropped out, forcing 29,000 enrollees to find entirely new coverage), and
the introduction of tax-shelter alternatives to insurance that promise to undermine standards and put further inflation pressures on those with traditional coverage.

Finally, in spite of being forced to pay anywhere from 30% to 65% of premiums, federal employees have no meaningful voice in the program on issues such as coverage, plan choice, quality standards, or the trade-offs between benefits and costs.

FEHBP has both structural and political flaws. Each makes the program more expensive than it should be for both the government, and for federal employees. The changes in FEHBP sought by AFGE are aimed at lowering costs without reducing benefits, improving the accountability of both the plans and the Office of Personnel Management (OPM), and achieving parity with the benefits provided by large private and public sector employers.

We strongly caution against opening up FEHBP to the general public by having it serve as the “public plan” option. FEHBP contains all of the flaws of the private health care system that Senator Obama’s health care plan seeks to rectify. FEHBP cannot be the alternative “public plan” because it has none of the virtues of a public plan, and all of the shortcomings of a private plan. Indeed, it is worse than most large, private employer plans because its structure squanders the leverage it might exercise over venders and providers to obtain the lowest prices. As described below, it fails the most basic test of an employer plan: it doesn’t even provide universal coverage for federal employees, retirees, and their families.

The proposal to create electronic health records in FEHBP and other programs to help lower costs, avoid medical errors and redundancies, and improve health outcomes has played a central role in Senator Obama’s health care policy. Legislation to require all FEHBP participants to have electronic health records has been introduced in the past two Congresses. AFGE opposed mandatory electronic records on the grounds that their initial costs would be substantial and borne by enrollees, and that no adequate privacy protections could be assured.
The potential savings and benefits of electronic health records are highly speculative, but their risks and costs are both real and enormous. The specific conditions which must be met to win support for mandatory electronic medical records in FEHBP are detailed below.

FEHBP’s Biggest Flaw: High Costs and Uneven Coverage

The officially announced average 2009 FEHBP premium increase was 7%. Over eight years, premiums have risen by an average of 69%. These increases occurred at the same time that the general rate of inflation hovered between 2 and 3 percent, and federal pay raises have ranged from 2 to 4 percent.

But the real story in FEHBP continues to be cost shifting from the government onto federal employees and retirees. Put aside for a moment the 7% figure that OPM made sure was the headline for the press coverage of its 2009 premium increase announcement. For federal employees, the numbers are much less positive. OPM has continued to take advantage of its ability to manipulate the formula for FEHBP premiums to engineer historic cost shifting maneuvers. They have claimed that since they had been putting aside too much in past years for reserves, they would dip into those reserves again this year to subsidize the government’s share of premiums. As a result, again—for the fourth year in a row--federal employees and their families will be forced to shoulder a far bigger increase in FEHBP premiums than the government will bear. Specifically, in the largest FEHBP plan, the Blue Cross/Blue Shield (BC/BS) Standard Option for Family Coverage, the government’s increase for 2009 was just 7.9% while employees will pay 13.4% more. The average share of premiums paid by the government is now down to 68%; in 2001 it was just under 72%.

The financing formula for FEHBP is complex – it combines two types of caps on the government contribution: a dollar cap, and a percentage cap. The dollar cap is calculated on the basis of 72% of average premiums, weighted by enrollment among about 280 plans. The percentage cap is 75%, so that no matter what the premium actually is, the government will pay no more than 75% of the premium. For example, if the dollar maximum amounted to 80% of the premium of any given plan, the government would still cap its contribution at 75% regardless of the dollar amount of the weighted average formula.

An estimated quarter of a million federal workers and their families are uninsured because FEHBP premiums are unaffordable to them on their modest federal salaries. The continued cost-shifting only increases the ranks of uninsured and underinsured Americans. Refusal on the part of OPM to take steps to stabilize cost-sharing or restrict insurance companies’ premium increases will force many more federal workers and their families to make the painful “choice” to go without health insurance.

As recently as eight years ago, the government’s average share of premiums was 72%. The average share paid by the government has now dropped to 69% and the Bush Administration’s relentless expansion and promotion of “high deductible” health savings account plans threaten to reduce this amount further. This declining average, however, hides the fact that the government pays as little as 35% of the premium of some plans because FEHBP’s financing formula caps the dollar value of the government’s contribution at 72% of the weighted average premium. In 2009, the maximum government subsidy for a plan in FEHBP will be $9,166 for family coverage and $4,047 for individuals.

OPM should use its administrative powers to make sure that cost shifting ends, despite the fact that the financing formula protects the government with a “ceiling” or maximum percentage, and fails to protect federal employees and retirees with a “floor” or minimum percentage. The Bush administration’s introduction of ever-more-bare-bones plans into FEHBP was explicitly designed to encourage movement out of comprehensive plans in order to affect the weighted average formula. This shift was exemplified by the replacement of Blue Cross-Blue Shield’s “High Option” with a new Blue Cross-Blue Shield “Basic Option.” The BC/BS High Option was one of the most comprehensive plans in FEHBP. The BC/BS “Standard Option,” used to be the somewhat more modest alternative, affordable to working families. But today, in sprite of drastic reduction in benefits in 2009, the Standard Option is the more comprehensive option, and the Basic Option – a far more restrictive and less generous plan-- is what is affordable to working families. This shift is a material reflection of the decline in standard of living for federal employees. Unless steps are taken to limit premium increases and prohibit benefit decreases, the decline will continue.

For 2009, OPM initially approved a move by Blue Cross/Blue Shield to force those in its Standard Option (the FEHBP plan that covers over half of the program’s participants) to pay all of the cost of certain non-emergency procedures performed by out-of-network providers up to $7,500 per procedure. In previous years, those in the Blues’ Standard Option paid just 25% of the cost of care for out-of-network procedures. The services and procedures that would have been subject to these drastic benefit cuts included: operative procedures, emergency room care, treatment of fractures and dislocations, including casting; pre- and post-operative care by surgeons, obstetrical deliveries, circumcisions of newborns, diagnostic colonoscopy, biopsies, removal of tumors and cysts, correction of congenital anomalies, treatment of burns, insertion of internal prosthetics, surgical assistance due to complexity of surgical procedures, and more. One might ask how treatment of burns, obstetrical deliveries, and emergency room care came to be categorized as “non-emergency” or how a patient on the operating table could be expected check the network status of a surgeon whose assistance is being sought, but OPM saw no problem with these changes. Only when Members of Congress and AFGE expressed outrage over these benefit cuts (coupled with 13% premium increases for enrollees) did OPM agree to renegotiate the terms of the 2009 contract with Blue Cross/Blue Shield. The status quo ante was not restored, however. For 2009, enrollees will have to pay 30% of the cost of out-of-network procedures, and OPM gave federal employees and retirees an additional month of open-season to consider their options.

OPM never brought these changes to the attention to federal employees and federal retirees, and neither did Blue Cross/Blue Shield. When the news emerged close to the end of the annual open-season for selecting an FEHBP plan, many in the program were not only in a quandary about whether to switch to another plan, but also in somewhat of a panic because the decision had been put to them so close to the deadline for change. Most of all, there was anger that no one was at the negotiating table representing the interests of the people who pay about a third of the premiums. The 2009 Blue Cross/Blue Shield fiasco proves once again that federal employees need to have their union at the table when this crucial component of their compensation is negotiated, and AFGE will continue to push for legislation that requires OPM to include unions in its annual negotiations with FEHBP carriers.

Health Savings Accounts: The Bush Administration’s Use of FEHBP as a Laboratory for Extremist Theories on Health Care

Health Savings Accounts were pushed by President Bush as an alternative to the restrictions of managed care and yet another means for the affluent to shield their investment income from taxation. The trade-off for having a substantial portion of one’s health care expenses uninsured was supposed to be freedom from managed care’s restrictions on choice of provider and choice of treatment. However, neither goal has been served by FEHBP’s High Deductible plans. The reality of HSAs under FEHBP is that they are not only as expensive or more expensive than traditional plans, but most of them include managed care restrictions on all covered services. And the only remotely affordable High Deductible plans in FEHBP are Health Maintenance Organizations (HMOs) that combine tightly managed care with $2,500 of uninsured “deductibles.” Predictably, they have been shunned by the middle class families who make up the federal workforce and its retirees, who stand to gain little from tax shelters and who value genuine protection from the high cost of needed health care services. As of 2008, only around 6,000 federal employees enrolled in plans with HSA components.

The introduction of High Deductible Plans into FEHBP, however, does make cost comparisons of different plans both confusing and misleading. Prior to the introduction of High Deductible/Health Savings Account plans, it was possible to compare plans on the basis of premiums and benefits, even though no two plans in FEHBP offer identical coverage. But it cannot be fairly said that a Health Savings Account plan like HealthAmerica Pennsylvania that charges an annual premium of $4,498 per year, of which $1,125 (25%) is charged to the employee, but which requires a $2,500 deductible (part of which is supplied by the government’s share of the premium) before any benefits are paid is more or less expensive than Blue Cross/Blue Shield Standard option which charges $5,872 in total premiums for individual coverage, and $1,825 to the employee (31.1%) but begins reimbursement after a $250 deductible.

Further, what can be said of premium inflation when FEHBP’s new plans are designed so that more than a third of the “premium” is a deposit in a Health Savings Account that rises by an amount determined by tax law rather than health care costs? Has the government shifted costs when a family with a Health Savings Account must spend at least $5,000 before benefits kick in (HealthAmerica Pennsylvania) rather than a maximum of about $3,500 required by BlueCross/Blue Shield, when only the Health Savings Account holder has a shot of ending the year with thousands tax-free tucked away for another day?

The Administration allowed Blue Cross/Blue Shield to offer a Health Savings Account/High Deductible option starting in 2008, in addition to the two plans it already sells to FEHBP participants. It believed that the Blue Cross “brand name” will encourage more participation in Health Savings Accounts so that this laboratory experiment will yield more promising data. AFGE opposes the use of FEHBP as a means of promoting HSAs, and opposes all expansions of HSA-type of plans in the program. In particular, we oppose any expansion of Blue Cross-Blue Shield contracts within FEHBP. Already the largest insurance contractor in FEHBP, Blue Cross has won for itself exemption from the Government’s Cost Accounting Standards (CAS), an exemption that makes it impossible for auditors to make sure that the company does not pass on to FEHBP costs it incurs in the course of providing services to other customers. Until the government is able to make sure that Blue Cross is not making improper charges to FEHBP by the application of CAS, AFGE believes that no additional contracts should be awarded to Blue Cross/Blue Shield under the FEHB program.

The fact is that the introduction of HSAs has not reduced average premiums, or the rate of increase in premiums. According to OPM, just under 12,000 people have signed up for the Health Savings Account or High Deductible plans since they have been an option within FEHBP, just 0.01% of the eligible population. And in spite of the fact that spending on FEHBP continues to rise at rates that exceed our nation’s overall health care inflation, and in spite of its foray into offering alternatives to insurance like HSAs, FEHBP fails the most important test of a group insurance program. It does not produce universal coverage for its target population—federal employees, retirees, and their families. Because of OPM’s collaboration in perpetuating the system’s flaws, it collects almost no data that would reveal the extent of the program’s failures. For example, it refuses to collect data on federal employees who are uninsured, the portion of the federal workforce that has no health insurance from any source, but is eligible to participate in FEHBP.

OPM is loathe to draw attention to uninsured federal employees, so there has not been a serious attempt to measure the size of this group, as well as its reasons for declining to participate in FEHBP, since 1992, when OPM contracted with Gallup to survey a small sample of nonparticipants. From that sample, it is estimated that approximately 250,000 federal employees who are eligible for the full employer subsidy under FEHBP not only do not use FEHBP, but they are entirely uninsured. The remainder of non-participants have health coverage from another source, predominantly from a spouse or from previous military service. There are no data on the number of uninsured federal retirees who are or were eligible for FEHBP coverage.

The reason most commonly cited by uninsured federal employees to explain their lack of participation in FEHBP was its prohibitive cost. The terms offered to federal employees under FEHBP are substantially worse than those offered to the employees of other large, unionized employers, both in the private and public sector. While on average the government pays just 70% of premiums and not more than 75%, other large employers pay at least 80% and often 100%, according to recent data published by the Bureau of Labor Statistics (BLS), and the Kaiser Family Foundation.

AFGE’s Legislative Solutions

Employees of the U.S. Postal Service bargain collectively over both wages and their employers’ share of FEHBP health insurance benefits. Postal workers pay 15% of FEHBP premiums while the Postal Service pays 85%. The Federal Deposit Insurance Corporation (FDIC), a federal agency that regulates the banking industry, also negotiates with its employee union over health insurance and pays 85% of premiums and provides employer-subsidized vision and dental insurance as well. In both cases, the employer does so not because of the overwhelming power of the union, but because it is a “best practices” business decision to do so. Simply put, employers who fail to pay an adequate or fair share of health insurance premiums are the ones facing human capital crises, and those who pay their fair share do not.
AFGE has long supported reforms that would allow the government to use the size of FEHBP, and its potential leverage over the insurance and pharmaceutical industries to produce savings which would render FEHBP more affordable for federal employees. For years, cost shifting onto federal employees has been the government’s only response to out-of-control premium increases. Forcing employees to shoulder a higher share of FEHBP costs has been justified as producing an incentive to be more diligent in restricting utilization and lowering costs. With the government shouldering a higher portion of FEHBP’s costs, perhaps OPM and OMB will be motivated to do more than rubber-stamp the demands of these politically powerful industries.

In the last two Congresses, House Majority Leader Steny Hoyer (D-MD) introduced legislation to change the financing formula for FEHBP so that agencies would pay 80% of the weighted average of premiums, with a maximum of 83% of any given plan. This legislation improves the affordability of FEHBP immensely. The current average contribution is under 70% with a maximum of 75%, and moving to an average of 80% with a maximum of 83% would open the door to health insurance to many of the 250,000 uninsured federal workers who cannot afford coverage at today’s rates. These financing changes would be an important step toward making FEHBP more affordable for federal workers and their families. They are also a smart response to the government’s much-discussed “human capital crisis.” Closing the gap between the federal government and other large, progressive employers in both the private and public sectors in the area of health insurance benefits goes a long way toward improving prospects for recruiting and retaining the next generation of federal employees.

In addition, extending health insurance coverage through the Federal Employees Health Benefits Program (FEHBP) to dependents up to age 25 has long been a priority for AFGE’s members. Many children of federal employees are forced to delay completion of college degrees because they must work to earn the money necessary to pay the ever-increasing tuition and fees charged by institutions of higher learning. These young adults may also remain economic dependents of their federal employee parents until age 25 because they are pursuing the advanced degrees which are increasingly necessary even for entry-level jobs in some professional occupations. Finally, a large number of young adults whose parents are federal employees are in the workforce but hold jobs that provide either no employer-sponsored health insurance or health insurance options that are entirely unaffordable.

According to the Robert Wood Johnson Foundation, as of 2004, approximately 13.7 million Americans between the age of 19 and 29 were uninsured. Unless they are either full-time students, or their parents’ full-time caregivers, they, for the most part, lose eligibility for coverage under their parents’ family coverage. In the FEHBP, unmarried children can be covered up until the age of 22. Only in rare circumstances, such as when the child is incapable of supporting him or herself because of a disability that began before age 22, will FEHBP continue to cover dependents over that age. Fourteen states have passed legislation that to some degree redefines “dependent” for purposes of family health insurance coverage, and the majority of those have extended coverage to the age of 25.

In the last Congress, Chairman Danny K. Davis introduced legislation to bring the federal government up to the standards set by these progressive states and other employers against whom the federal agencies compete to recruit and retain employees. The bill provided a straightforward answer to the problem of insurance coverage for the young adult dependents of federal employees, and the costs to FEHBP of his solution –to extend family coverage to those in the age interval of 22 to 25 –was negligible. The benefit to families, however, would have been substantial. AFGE strongly supports extending family coverage in FEHBP to include those up to age 25, and will work for its enactment in the 111th Congress.

AFGE’s Administrative Solution

AFGE believes that FEHBP’s carriers should be required to purchase prescription drugs at the discounted prices the government has negotiated for purchase off the General Services Administration’s (GSA) Federal Supply Schedule (FSS), as negotiated by the Department of Veterans’ Affairs. The negotiated drug prices available from the FSS are used by the Veterans Health System, the Department of Defense, the U.S. Bureau of Prisons, the Indian Health Service and other public health entities administered by the U.S government. It simply makes no sense for the federal government to pay one set of discounted prices for the prescription drugs it purchases for use in veterans hospitals and clinics, military hospitals and clinics, Indian Health Service facilities and federal prisons, and other drastically higher prices when it pays for prescription drugs for its eight million employees, retirees, and their dependents who work in those agencies and programs. Why should taxpayers finance this inequity?

In 1999, one FEHBP carrier petitioned the government for permission to purchase the prescription drugs it provided to its federal enrollees off the FSS. Both OPM and OMB agreed that OPM had the authority to allow its FEHBP carriers access to the FSS discounts. After all, since taxpayers were paying for the prescriptions, every opportunity to minimize expenditures should be utilized, and the laws and regulations were already in place to allow the plan to operate. Those enrolled in the FEHBP plan would have access to the FSS discounts for the drugs on the schedule, and have a different and separate reimbursement rate and mechanism for drugs that were not. For a moment, it looked like the first real cost-containment mechanism ever adopted for FEHBP would go forward.

Unfortunately, the major health insurance carriers joined with the pharmaceutical industry and their own pharmaceutical benefit manager subsidiaries and threatened a “strike” i.e. they told OMB that if FEHBP plans were permitted to purchase drugs off the FSS at discounted prices, they would no longer sell to FEHBP plans at all. The message was clear: Give us the higher prices we demand for FEHBP, or do without the drugs. In the face of this “your money or your life” ultimatum, OMB decided to hand over the money. AFGE believes that the Obama administration should issue a rule requiring FEHBP carriers to purchase off the FSS, despite any threats of retaliation from these powerful industries. It will save FEHBP hundreds of millions of dollars, and provide a positive model for reform of the Medicare Part D program.

Prescription drugs now account for 11 percent of all health care spending, and 23 percent of all out-of-pocket costs for insured Americans. For 2003, the most recent year that national health care spending data are available, prescription drugs accounted for 50 percent of the increase in out-of-pocket costs for health care. OPM repeatedly cites prescription drugs as a major source of FEHBP’s own inflationary spiral; for 2006, they claimed again that almost a third of the average increase is directly attributable to drug prices, for 2007-9, OPM declined to analyze the source of premium differences. Thus, legislation to gain access to the real prescription drug discounts available to other federally-funded health programs would mark important cost-saving progress for both taxpayers and federal employees.

This effort coordinates perfectly with the proposal to bring the costs of the prescription drug benefit contained in the Medicare Modernization Act down through direct government price negotiations with the pharmaceutical industry. Since the Medicare prescription drug program is based on the FEHBP’s design, the issues are virtually identical. Apologists for the two programs’ structures believe that competition among plans is enough to bring down prices. Empirically that has been proven to be a false hope. In December 2005, Families USA published a report comparing the lowest prices available under the various Medicare prescription drug plans to the prices the DVA negotiates for the FSS for the 20 most commonly prescribed drugs and found that in 19 out of 20 cases, the FSS price was lower. The median difference was 48.2% lower for FSS prices, i.e., if you compared the lowest price available under any Medicare plan, the median difference between that and the FSS prices was 48.2%. For half of the drugs, the lowest price under Medicare’s private plans was 150% of the FSS price or one-and-one half times higher, and for a quarter the lowest Medicare price was double the FSS price.

These price differences amount to billions a year difference in costs for the government and for enrollees. Federal employees are no more able than most Medicare prescription drug insurance enrollees to shoulder expenditure differences of thousands per year, but the Families USA study shows that is exactly what the flawed structure of FEHBP and the Medicare prescription drug program requires.

AFGE has been advocating for a prescription drug payment by the Medicare System to OPM for FEHBP plans. OPM has been eligible to claim funding for retiree prescription drug coverage as a result of the law enacting Medicare Part D prescription drugs. The Medicare Modernization Act of 2003 (MMA) clarified that the federal government, as an employer, would be eligible to receive a payment made available to all employers that provide prescription drug benefits that were at least as generous as the new Medicare Part D program. During the MMA debate, AFGE was concerned that employers would react to Part D by ending their own retiree drug coverage. The “Medicare employer payment” was designed to encourage employers to retain such benefits.

In 2004, OPM and Centers for Medicare and Medicaid Services (CMS) staff made preparations to receive the employer payment on behalf of FEHBP. However, OPM has refused since 2005 to apply for the payment.

A December 2006 GAO study (GAO 07-141) requested by Senator Daniel Akaka found that premium growth in one of the largest FEHBP plans with a high share of older enrollees could have been 3.5 to 4 percent lower in 2006 had the payment been accessed. Additionally, the payment would have lowered the growth in premiums across all FEHBP plans for 2006 by more than 2 percentage points on average, from 6.4 percent to about 4 percent. GAO also found that FEHBP premiums in the future would be more sensitive to drug cost increases than would be premiums of other large private and public employer plans that receive the retiree drug payment. CMS makes the payment to employers on an annual basis, and to date, OPM has forgone two payments, that could have lowered FEHBP costs by more than $2 billion.

AFGE has worked with lawmakers on legislation which would require OPM to apply for the Medicare employer payment for the purpose of offsetting premiums charged to the government and all enrollees on an equitable basis. An Obama administration should apply immediately for the subsidy so that AFGE members can benefit from additional funding for FEHBP.

Electronic Medical Records

In OPM’s 2008 call letter to FEHBP contractors, the agency’s approach to this complex issue was merely to ask for proposals that would “broaden the use of health care IT.” OPM’s guidance was extremely vague; it failed entirely to address any of the concerns FEHBP’s enrollees have about the adoption of electronic medical records.

AFGE’s first concern is privacy. Before any FEHBP carrier adopts mandatory electronic medical records, we believe that the following issues need to be addressed seriously and completely. What follows is a list of AFGE’s concerns regarding privacy and electronic medical records:

Limits on what data can be collected. Only data that is absolutely necessary for clearly defined purposes should be collected or shared in an electronic medical record.
The purpose of the inclusion of any data must be specified, and the data only used for that specified purpose.
Clear limitations must be established for how the data is used, and degrees of access must be specified for each user.
There must be clear and stringent tests for accuracy, relevance, and currency of data in an electronic medical record.
There must be clear and stringent prohibitions on employer access to records, and clear remedies associated with any breach of this prohibition.
It must be clear to all parties to an electronic medical record that compliance with all regulations and standards will be monitored.
Clear and strict procedures must be established for how to handle breaches of privacy. The individual subject of an electronic medical record should have full access to all audits and records of access.
Security safeguards must be established and updated regularly to guard against breaches, losses, and all authorized and unauthorized access.
Clear and accessible mechanisms must be established for subjects of electronic medical records to make complaints regarding the privacy, accuracy, and access of their records. Remedies must also be established for those affected by breaches, including full compensation for any harm caused by a breach of privacy.

AFGE’s second concern with electronic medical records has to do with the costs. Although many grandiose claims are made on behalf of health care IT’s cost-saving potential, there is little acknowledgement of the substantial costs associated with establishing and maintaining these electronic records. It is also necessary to note that all carriers already have full electronic records of all compensated care for each person they insure. Providers have made clear that the costs of purchasing and maintaining the interoperable software that these records require will impose enormous costs on them that they will need to pass on in the form of higher charges for office visits. No provider suggests that health care IT would reduce the number of office visits. In addition, the time spent on recording information into the electronic record would have to be compensated, as would all those involved in maintaining them. While these IT costs are real and indisputable, the hoped-for savings that result from providers having access to the records are virtual.

AFGE does not discount entirely the claims made by proponents of electronic medical records. The potential for cost avoidance from unnecessary or duplicative medical testing, and the potential for avoidance of harm from ignorance of a patient’s allergies or unrevealed sensitivities should not be underestimated. However, it is wrong to suggest that electronic medical records are an unambiguous money-saver. They may prevent some unnecessary or dangerous tests or procedures from being carried out, but their financial cost is substantial.

Conclusion

AFGE strongly supports legislation like that introduced by Majority Leader Hoyer in the last two Congresses which improves the financing formula to make group health insurance—the most efficient means of delivering health care coverage—more affordable and more accessible for federal employees and their families. Likewise, AFGE will work to pass legislation that extends FEHBP family coverage to dependents up to age 25. AFGE will also work with Congress and the Obama administration to ensure that federal employees and retirees have a seat at the table when OPM negotiates benefits and premiums with FEHBP’s insurance carriers, so the interests of those who pay a third of the program’s costs will be considered. AFGE also believes that the Obama administration should take aim at one of the major causes of premium inflation—prescription drug prices. It should take a cautious attitude toward electronic medical records, where high costs and the potential for breaches of privacy make them highly controversial among federal employees.