Would Carper’s latest bill really take postal workers out of FEHBP?

Monday, November 2

  • Mick Mouse

    Of course this will not apply to Congress. Those scum will always have the best of everything. In my town the really good doctors do not accept Medicare. I do not want any part of it!

  • postalnews

    Uh…. yes, I am. Why do you ask?

    The purpose of the article was to outline the changes the Carper plan would implement. No one is required to have Medicare B and D currently. Under Carper’s plan it would be mandatory. You can decide for yourself whether or not that’s a good thing- I just report the facts.

  • Ronda Burke

    You don’t just report the facts. If you did, you would agree that USPS would be removed from FEHBP. Carper’s plan creates a seperate risk pool, a significantly smaller and older risk pool than that found in FEHBP enrollees. You see this is how insurance companies decide what to charge. The plans offered may be the same, but they will cost more.

  • postalnews

    Sorry, but you’re wrong. Our story explained exactly what will happen in the unlikely event that Carper’s bill passes. We said that “technically” postal workers will not be removed from FEHBP. That’s a fact, not an opinion. Will it cost employees and retirees more overall? I don’t know- and neither do you. I would also point out that your comment appears to be based entirely on information that you got from what we reported. You’re welcome!

  • Mark Jamison

    The requirement to enter Medicare Part D could have some ramifications. Previous discussions would have allowed plans within FEHB to include drug coverage under a Part D exception (that’s the way many private sector retirement plans work although many are offloading drug coverage). Stand alone Part D coverage could end up being more costly for retirees.
    The issue of required participation in Medicare needs to be discussed for the entire FEHB pool. Yes, Medicare would see some increases in costs but Federal employees and agencies have been paying into Medicare for years and some actuarial looks take the possibility of participation into account. Medicare participation and the attendant opportunity to offer supplemental plans for Federal retirees would be cost effective and would make FEHB much more sustainable.
    There’s no reason that Congress couldn’t act on this issue separately while also addressing the RHBF prefunding which would be largely unnecessary with required Medicare participation. The only real sticking point would be with respect to the current penalties that come from waiting to enter Medicare. That could be addressed with a six month or one year amnesty.

  • Barney

    I planned on getting Part A and B anyway since they both pay 80% then Nalc picks up the rest therefore no costs but premiums paid. The issues that worry me are risk pool and possible different rates and higher for guys like me and so many older retired postal worker Part D I do not need being a disabled Vet and would not like being forced into it

  • Mark Jamison

    “technically” is doing an awful lot of heavy lifting in that statement.
    Really no need for the sarcasm in response to Ms. Burke. The PSHBP will be a part of FEHB but totally walled off from FEHB. In general creating a smaller risk pool would likely result in higher premiums however the Medicare participation requirement would have a mitigating effect so it is hard to say at this point what the immediate impact would be.
    A couple of years ago when GAO looked at Donahoe’s proposal to take USPS out of FEHB it questioned his assertions that coverage would remain the same or cheaper.
    It’s also likely that the effect on FEHB will be more than negligible.
    So yes, “technically” it is a fact that the bill keeps postal employees in FEHB but it’s also a fact that they become a separate and distinct entity within FEHB and walled off from all other Federal employees. That has implications beyond impacts on rates and coverage.

  • postalnews

    There’s never any “need” for sarcasm, but in that particular case, it was entirely appropriate. Also entirely appropriate was the use of the word “technically”, since I spelled out what would be different about the USPS only plans.

  • postalnews

    Not sure what the “ramifications” of the part D requirement would be, since retirees would still have the prescription drug coverage from their FEHB plan. Whether the negative impact of the additional premium would be offset by the positive impact of dual prescription coverage would be the big question, wouldn’t it.

    Also- as far as the medicare tax business- I don’t think that the fact that USPS and its employees have been paying the tax will mollify the tea party types- they’ll focus on dollars and cents, not right and wrong. I’d fully expect them to portray the plan as a taxpayer bailout, since most of the net savings for the USPS come from the Medicare fund.

  • Mark Jamison

    In rereading the bill I see that the exemption for supplemental plans that have drug coverage is mentioned so it isn’t an issue.
    Yes, the Tea Party types will make an issue of Medicare costs – Ron Johnson has done in that in the Senate hearings. If facts matter, and they often don’t in politics, then focusing on costs to Medicare is a non-issue. First, as the economist Dean Baker likes to point out, the context of numbers matter. As a stand alone figure the cost to Medicare if postal employees are required to sign up looks like a large number (if I’m remembering right GAO had it about $2 billion). However when compared to total Medicare costs it’s a minuscule percentage. Moreover, it’s not clear that some of the Medicare actuarial figures don’t already include the costs for eligibles who may not sign up – the figures that breakout costs for requiring Medicare sign up seem to skirt that issue.
    Second, the cost to Medicare has to be offset by the savings in the PSHBP (or if this were made FEHB wide those costs). In that case it pretty much becomes a no brainer.
    The 1984 addition of Federal employees to Medicare makes no sense unless FEHB (like pretty much every employer sponsored plan) requires eligibles to enlist in Medicare.

  • postalnews

    All of that may be true, but I think it will come down to the claim that the USPS is currently losing billions every year, and the Carper bill will solve that by taking money from Medicare. Whether or not the “losses” are real won’t matter, and the amount the USPS and its employees pay in Medicare taxes won’t matter- just the fact that Medicare will lose and the USPS will gain.

    Also- when you say that “the cost to Medicare has to be offset by the savings in the PSHBP”, the PSHBP savings go to the USPS (and possibly the USPS employees), not the taxpayer. That certainly won’t be seen as an “offset”.

  • Mark Jamison

    That sounds about right (if the change were to FEHB generally that would be another matter in terms of savings). It’s unlikely this bill is going anywhere. Carper is in the minority, the majority leadership on the committee in the Senate won’t give this much of a look. Even if the bill were to miraculously make it through the Senate in something resembling its current form it won’t go anywhere in the House where Meadows (my Congressman) is chair of the subcommittee and besides being very Tea Party influenced also on the outs with leadership.
    Carper desperately wants a legacy, he has said as much in several hearings. Probably won’t happen in an election year.
    One section of the bill really stood out. This little nugget from the section on Postal Operations:

    (D) the feasibility, including the costs and benefits, of bifurcating postal delivery into 2 components, consisting of a market-dominant product delivery component and a competitive product delivery component.

    That sounds very much like creating a separate “for profit” delivery entity.

  • postalnews

    See the recent Brookings paper just published that calls for exactly that…

    http://postalnews.com/blog/2015/09/21/how-to-save-the-usps-by-splitting-it-in-two/