Legislation To Amend the Federal Employees Health Benefits Act

GAO commented on three bills being considered by Congress to amend the Federal Employees Health Benefits Act. GAO noted reasons that the Federal Employees Health Benefit Program has encountered problems, including the: (1) inability to contain the spiraling costs of health care; (2) lack of predictability over budgeting for the government's contribution toward health plan premiums; (3) attempts to keep pace with the more expensive private sector health programs; and (4) expensive premiums making the program unattractive. S. 2027 would establish a needed cost containment program which emphasizes cost effectiveness, while requiring that the government's contribution toward health plans be based on a weighted average of the premiums charged by all participating plans. S. 1685 would require that the government's contribution be adjusted annually by the fluctuations in the Consumer Price Index for All Urban Consumers. H.R. 3798 proposes annual adjustments to the government's contribution in an amount proportional to changes in the Gross National Product. GAO believes that these bills would contribute to solving many of the current problems facing the program. Further, the requirement for periodic Comptroller General reviews and reports on the activities of the utilization and peer review organizations should be deleted from S. 2027.