Cheaper, Better Health Plan Slated for Federal Workers

At a time when efforts to reform the nation’s health system and cut its costs have all but collapsed on Capitol Hill, the Federal Employees Health Benefits Program will expand benefits and cut average premiums for the 1995 benefit year.

Jim King, director of the Office of Personnel Management, which runs the health insurance program for federal workers, retirees and their families, said Tuesday that the total average premium in 1995 will decrease by almost 3.4%. Last year it increased by 3%. The average contribution by an enrollee for his or her portion of the premium will decrease by 1.1%, King said.

At the same time, King announced four major changes in benefits:

* Starting immediately, all plans will be required to cover controversial high-dose chemotherapy with autologous bone-marrow transplantation in the treatment of breast cancer, ovarian cancer and multiple myeloma, a benefit addition strongly sought by women’s health advocates.

* Lifetime maximum limits on mental health benefits in fee-for-service health plans will be eliminated.

* All plans will cover childhood immunizations without deductibles or co-payments for the benefit itself, although the associated office visit might be subject to cost-sharing.

* “Opt-out” benefits will be offered by several prepaid HMO-type plans, allowing a patient to obtain treatment outside the plan’s network and still receive reimbursement for part of the cost.

In the last year or so, increases in premiums by insurers generally have continued to rise but at a slower pace than in previous years. But actual reductions in premiums are highly unusual.

OPM associate director Ed Flynn said insurers participating in the federal employee health plan, which insures 9 million people, have been able to slow down premium increases for 1995 partly by improving efficiency and cutting over-utilization of services.