AFGE official criticizes health insurance proposals in Obama budget

Proposals would shift $8.4 billion in costs onto enrollees over decade

WASHINGTON, April 11, 2013 /PRNewswire-USNewswire/ -- In testimony delivered today before a House subcommittee, American Federation of Government Employees Public Policy Director Jacqueline Simon criticized proposals that the Obama administration has presented for altering the Federal Employees Health Benefits Program.

Simon testified before the House Oversight and Government Reform Subcommittee on Federal Workforce, U.S. Postal Service, and the Census. The hearing focused on the FEHBP and whether it is a good value for federal employees. A copy of the testimony is available here: http://bit.ly/14egKZe.

Simon's testimony was critical of the proposals for FEHBP changes that the administration has put forth.  As described in President Obama's fiscal 2014 budget, released Wednesday, the proposals would shift costs for the program onto federal employees to the tune of $8.4 billion over 10 years.

"With federal pay frozen for three straight years, massive tax increases on FERS employees via increased retirement contributions, and furloughs of up to 14 days that may be repeated each year for the next decade, federal employees cannot withstand any more reductions in their compensation," Simon said. 

The proposals include charging more for federal employees who are ill or overweight, charging more to families with more than two persons, worsening the FEHBP's already severe problems with risk segmentation by introducing regional PPOs, and making changes to prescription drug coverage. The administration would also support FEHBP coverage for domestic partners and other dependents.

"The administration's FY 14 budget piles on with additional cuts to retirement benefits for both CSRS and FERS employees hired before 2013.  It is astounding that they would add more than $8 billion in cuts to FEHBP on top of this," Simon said. "The administration calls this 'modernization' of benefits; we call it cannibalization."

Simon also called for the establishment of a statutory employee advisory committee for FEHBP that would be modeled on the Employee Thrift Advisory Committee for the Thrift Savings Plan, the Federal Salary Council for the General Schedule pay system, and the Federal Prevailing Rate Advisory Council for the Federal Wage System.

"Federal workers pay on average 30% of premiums and as much as 64% in some plans, yet we are denied information and denied any input in decisions about changes in benefits, changes in administration or changes in the program's structure.  Workers are apparently just supposed to keep quiet and keep paying," Simon said. "But like all other middle class Americans, federal workers cannot afford to do this.  Giving federal employees an opportunity to learn more about their health insurance program – and a chance to have their interests, views, and concerns receive serious consideration – is a reform worth supporting."

The American Federation of Government Employees (AFGE) is the largest federal employee union, representing 670,000 workers in the federal government and the government of the District of Columbia.

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SOURCE American Federation of Government Employees