In order to secure the votes to pass a health care bill, Senate Democrats were forced to scrap the widely-unpopular public option. But before chalking this up as a victory for opponents of government-run health care, though, its replacement deserves a closer look. As described in Sec 1334 of the Senate bill, the Director of the Office for Personnel Management (OPM) would now be charged with sponsoring a set of multi-state health plans to compete with private insurers. As a recently published detailed analysis by Heritage’s Bob Moffit and Kathryn Nix shows, this new program is simply a placeholder for the public option.
On January 20, The Heritage Foundation hosted three former OPM directors to explore the ramifications of the new proposal. Former Director Linda Springer opened by questioning the role of OPM in the proposal. OPM currently administers the successful Federal Employee Health Benefits Program, and it is due to this expertise that the agency was chosen to run the new multi-state plans. However, Springer warned that overstretching OPM beyond its traditional role could result in the cannibalization of the existing FEHB program.
Dan Blair, another former Director, echoed this fear, emphasizing that the new role assigned by the Senate bill falls well outside the mission of the OPM, which is to ensure an effective and efficient federal workforce. This establishes a critical question that lawmakers must answer: Is the federal workforce better served by the current OPM, or one that has an entirely new and unrelated agenda? Blair noted, “to me, the two objectives don’t seem to mesh very well, and I’m concerned of what the impact will be on OPM’s other programs.”
Moreover, there are too many unanswered questions about the program to gain an accurate assessment of the proposal. As Blair pointed out, this provision was added to the bill after it left committee, and no hearings or in-depth analyses have been conducted to enhance understanding of its reach. Remaining unanswered questions include the overall cost of the program and who will bear the risk of insolvency. The language on this is vague, when not altogether absent.
Finally, whether deliberate or not, Sec. 1334 would allow the Director near-limitless powers to dictate competition within health insurance markets. Specifically, the bill allows for the Director to personally set premiums for the sponsored health plans and negotiate profit margins and medical loss ratios that may differ from the rules that HHS would apply to private health plans. According to Moffit and Nix, then, “the new Senate bill makes no pretense to establishing anything resembling a level playing field for market competition between public and private health insurance options.”
Former OPM director Donald Devine emphasized this point by citing changes he himself made to the FEHBP during his tenure as Director in the early 1980s. Devine cut benefits and denied abortion coverage, decisions that were unpopular, especially on the left, but upheld nonetheless by the Supreme Court. Under the Senate bill, this power would be extended to OPM’s new role in the state exchanges.
As Devine himself said,“This is incredible power to give somebody over the health care of the people of the United States…I’ll put it this way…do you really want to put me in charge of your medical program for everybody in the country?”