ACP-ASIM Recommends Steps for Opening Federal Employee Health Benefits Program to Uninsured
(Washington, DC): The success of proposals to reduce the number of uninsured Americans by opening the Federal Employee Health Benefits Program (FEHBP) to qualified individuals will largely depend on the design of a publicly funded defined contribution plan for low-income individuals, according to a policy paper issued by the American College of Physicians - American Society of Internal Medicine.
"The ACP-ASIM supports consideration of the use of an FEHBP buy-in with a well-designed defined contribution as one strategy to make affordable health insurance coverage available to all Americans," said Dr. William Hall, MD, FACP. "It may make sense to approach such major reform in a sequential fashion, starting with the low-to-moderate income individuals and families, in combination with the expansion of Medicaid and S-CHIP."
A key part of a successful proposal involves a public sector funded defined contribution to qualified participants, typically low-to-moderate income individuals and families with an income up to 300% of the federal poverty level (FPL). ACP-ASIM proposes a subsidy of $2,800 per adult for those at 101% of the FPL, phasing to a subsidy of $2,400 per adult for those at 150% of the FPL (in 1999 dollars).
The College makes a series of additional recommendations for the design of a FEHBP buy-in program.
- Establish a parallel FEHBP buy-in program, targeted initially to individuals and families with incomes between 100-200% of FPL
- Separate the insurance pool from the existing FEHBP from the insurance pool for the parallel FEHBP buy-in.
- Establish a standardized benefit plan for the parallel FEHBP buy-in.
- Establish a high-risk pool for enrollees with greater-than-usual health needs.
- Provide a high enough defined contribution so low-wage workers can afford to buy coverage through the FEHBP plan.
- In addition to a tax credit, other mechanisms, such as direct income-related premium subsidies (cash or voucher) should be considered.
- If the public sector funded defined contribution is a tax credit, allow low-wage individuals who have no income tax liability to claim the credit by making the defined contribution refundable.
- Initially target low-to-moderate income individuals and families.
- A full or near-full public sector funded defined contribution should be maintained as long as possible over the eligible income range.
- Minimize incentives for employers to drop health insurance coverage by allowing the premium subsidy to be applied to the employee's share of the health insurance premium for employer-based insurance.
- Gradually expand the FEHBP buy-in to uninsured individuals with incomes that are greater than 300%, as part of an overall strategy to make affordable coverage available to all Americans.
"Additional sequential proposals may be needed in order to achieve coverage for all Americans, but the combination of an FEHBP buy-in and the expansion of Medicaid and S-CHIP has the potential to make a substantial improvement in decreasing the number of uninsured Americans," said Dr. Hall.
The American College of Physicians-American Society of Internal Medicine represents more than 115,000 physicians and medical students. It is the largest medical specialty society and the second largest medical organization in the United States.
Jack Pope, Washington Office, (202) 261-4556
Jennifer Whalen, Washington Office, (202) 261-4575
Page updated: 11-03-03