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Stephen Lynch wants to ‘blow up’ rare government program that’s working

Rep. Stephen Lynch of the House Oversight Committee suggested during a hearing last week that Congress should “blow up” the federal health benefits program known as FEHBP.  But a growing number of experts think that this scorched earth approach to a system that 8 million Americans rely on for health benefits is a bad idea.


Rep. Lynch has introduced the FEHBP Prescription Drug Integrity, Transparency and Cost Savings Act (HR 4489) to increase oversight of the tactics used by pharmacy benefit managers (PBM) to negotiate reduced drug costs for federal employees.


But as Mark Merritt recently wrote in Roll Call:

By any measure, FEHBP is a huge success. It has been routinely touted in the health reform debate as a national model for high-quality health care programs. A recent survey by the Office of Personnel Management, the agency administering FEHBP, found that federal employees are overwhelmingly satisfied with their current health benefits — by a 7-1 margin. This is significant, since pharmacy benefits are the most often used part of the program. The bottom line is that FEHBP offers prescription-drug benefit programs that are as good as or better than those offered by many Fortune 500 companies.

Nonetheless, the goal of this legislation is to force OPM to take FEHBP in an entirely different direction. It wants the program’s prescription drug benefits to operate less like those of savvy large employers and more like those of the Medicaid program for the poor. Currently, FEHBP relies on the same, sophisticated pharmacy benefit managers used by blue chip companies, Medicare Part D, and other successful programs to improve affordability. This bill would drive many well-regarded PBMs out of the program altogether and rely instead upon government price controls and micromanagement to do the job.

Rep. Lynch’s bill would undermine cost-saving tools and reduce choices for federal workers. And the Office of Personnel Management opposes Rep. Lynch’s bill. So why “blow up” a popular program that’s effectively delivering drug benefits to 8 million federal employees? Good question.

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