Federal health benefits touted as model for reform


A box accompanying an article in Saturday's editions of The Sun incorrectly reported that participants in the health insurance program for federal workers paid an average of $77.46 in 1993 for a year's coverage. The $77.46 is the average paid for a month's coverage.

The Sun regrets the error.

WASHINGTON -- Once targeted for extinction by President Clinton, the health insurance program for federal workers is suddenly being touted as a reform model that could serve millions of Americans.

Sen. Edward M. Kennedy, a Massachusetts Democrat and an influential committee chairman, not only praised the program this week but proposed to expand it by permitting most privately employed workers to join.

An expanded program would be a boon to many private workers because the federal program provides more comprehensive *T insurance benefits than offered by many companies -- and generally at a lower cost.

Although it's too early to predict the fate of the Kennedy proposal, the president himself has already praised it, saying, "I think it's a good place to start."

Federal-worker groups say the Kennedy endorsement gives their program a big boost and improves its prospects for survival. That's great news to many federal workers who had feared that the plan might be terminated under the Clinton proposal.

"I was worried about being kicked out of my plan," said Rob McCulley, an Internal Revenue Service worker from Ijamsville in Frederick County.

John Sturdivant, president of the American Federation of Government Employees, was optimistic about the chances of preserving the federal health program. "I would say the plan is taking on a new life of its own," he said.

Mr. Clinton's health reform proposal would abolish the federal health program and require its 9 million participants, -- including members of Congress, the president and retired government workers -- to receive coverage through regional insurance purchasing groups. Nearly 300,000 federal workers live in Maryland.

Fearing that they would wind up with less-generous benefits and higher premiums, workers have urged Congress to retain the program.

They have received support from an unlikely combination of sources, from the conservative Heritage Foundation to liberals like Mr. Kennedy. All agree that the program is too good to be killed.

The program offers an unusually wide choice of seven national plans to all employees, including those that permit patients to choose their doctors and more-restrictive plans like health maintenance organizations (HMOs).

Premiums are generally cheaper than under private plans. The most popular federal plan, the Blue Cross "standard option," costs $4,860 a year for family coverage -- roughly $400 less than the national average for similar plans that permit patients to choose their own doctors.

In addition, the federal "standard option" plan provides better benefits than many private plans. It covers doctor visits and hospitalization, mental health services and prescription drugs.

Program costs have been rising, although 30 percent less than ** the national average in recent years, partly because, "We have enormous purchasing power," said James B. King, director of the Office of Personnel Management, which administers the program.

The combination of good benefits, choice of plans and reasonable prices has made the program popular.

"I'm very pleased with it," said Dick Keidel, a project leader with the international operations branch of the Social Security Administration in Woodlawn. "It's well worth it. When I needed the coverage, it was there."

Workers' fears about losing their program eased in recent months as Mr. Clinton's reform plan came under fire.

Many lawmakers object to the president's proposal to compel most Americans to obtain insurance through the regional purchasing alliances, which would have ended the federal workers' program.

Mr. Kennedy may have dealt this part of the president's reform plan a death blow this week. The senator instead proposed that Americans receive coverage through their employers, voluntary health alliances or the federal program.

A longtime advocate of national health insurance, Mr. Kennedy lauded the federal program as "tried and tested" and said it should be an option for workers at companies with fewer than 1,000 employees, and for the uninsured, self-employed and farmers.

Mr. Kennedy's proposal would open the program to roughly two-thirds of the private work force.

"I have felt for years that every American should have the opportunity to have the same health coverage on the same terms as members of Congress and the president," Mr. Kennedy said this week.

The panel that Mr. Kennedy chairs -- the Senate Labor and Human Resources Committee -- is working on health care legislation, as are other committees in Congress.

It's unclear what reform plan will finally pass Congress because lawmakers are sharply divided over issues like financing and cost control.

But some federal workers expressed concerns about the program if millions of private-sector members join it.

They worry that premiums might rise because of higher administrative costs and the uncertain health status of new members.

Supporters "say the plan now is a success, but that's because it has a select group of participants," said Leon Transau, an Interior Department employee.

"If you bring in millions of people, it won't be the same group. The risk rate will rise, and it will be entirely different."

Mr. King, the federal personnel chief, reacted cautiously to the proposal to expand the program. He noted that the government can hold down program costs partly because most of the insured -- all except retirees -- work for federal agencies.

That makes it simpler to handle paperwork, enroll new members and discharge others as they leave federal employment. It would be harder, he said, to administer the program if people outside the government joined.

Is it possible to expand the program? "The answer is yes," Mr. King said. "Is it easily done? No."


* Provides health insurance for 9 million government workers, retirees, and their dependents.

* Immediate coverage begins upon enrollment. There is no medical exam beforehand and no restrictions for age or pre-existing conditions.

* Seven basic plans are available; Blue Cross, which covers 1.55 million workers and their families, is the most popular. Other options, including health maintenance organizations, are available. In 1993, employees paid an average of $77.46 for a year's coverage.

* The government pays he bulk of workers' premiums. In 1994, the government paid up to $1,721.20 for each individual enrolled and $3,676.92 for families.

* Participation is voluntary, and there is an annual period during which employees may switch plans.

* To be covered by federal health insurance after retirement, employees must have participated for at least five years.

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