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March 27, 2014
As prepared for delivery
Thank you John. Thank you for your continued leadership of OPM’s Health and Insurance mission. I so appreciate your stewardship of FEHB, which provides such high quality, affordable health care for 8.2 million Federal workers, retirees and their families. I also want to thank you for all the hard work you and your teams have done to make the implementation of our expanded opportunities and responsibilities under the Affordable Care Act such a success.
This conference is a great collaboration between OPM and AHIP. I want to thank Candy Schaller of AHIP, our partner for the past 16 years, and Ellen Gay of OPM for all the work they did to put on this event.
We are coming together at a crucial time for health care in our country. In four days, the first open enrollment period for the Affordable Care Act closes.
In the past month, I have traveled to Philadelphia, San Antonio, Houston, Miami and I just got back from Phoenix. I’ve been spreading the word about how important it is for all Americans without health insurance to sign up for a plan in the Affordable Care Act Marketplaces.
I’ve concentrated on the Hispanic community – in particular on women in this community. They are the ones who usually make decisions for the family when it comes to health care. Nearly 25 percent of all Latinos in America are uninsured.
As I’m sure you know Latinos suffer from certain illnesses at higher levels than the rest of the population. We have more of the risk factors that can lead to heart disease, diabetes and obesity.
The Affordable Care Act can help us reduce those trends, particularly through free preventive care and wellness programs, like those that you offer to Federal employees, retirees and their families as well as tens of millions of health care consumers across this great nation.
The good news is that since the Affordable Care Act’s open enrollment period began in October, more than 5 million people have signed up for a plan in the Marketplaces. Millions more have enrolled in, renewed, or learned that they are eligible for Medicaid.
Do we want those numbers to be larger? Yes. President Obama, the First Lady and Administration officials from the Chief of Staff to Cabinet Secretaries have, like me, been traveling the country to get the word out.
Advocacy campaigns like Get Covered America have been holding events and going door-to-door to bring people to enrollment sites. Even NBA players are starring in television ads. They are especially working on convincing those so-called young invincibles that they must sign up for a health plan, that they are one sports injury, one serious illness away from bankruptcy if they are not insured. As you well know, it is crucial that we get the 18 to 34 –year-old age group signed up in big numbers.
The Affordable Care Act has already helped millions of young Americans. Under the new law, more than three million young adult children have been able to remain on their parents’ health insurance until they turn 26. And 325,000 of them are the children of Federal workers in FEHB.
This provides the peace of mind for parents that if their children get seriously ill or injured in an accident that they won’t have to worry how to pay the medical bill. And it means that young people are less likely to put off the kind of preventive care that can forestall a serious illness.
As you can tell, like the President, I’m already fired up about this.
After all, we at OPM consider the FEHB program the original Marketplace. For 50 years – half a century – the FEHB has served the Federal workforce with affordable, reliable, high quality health care.
As the largest employer-sponsored health insurance plan in the nation, the FEHB has led the way. Our FEHB partnership with all of you in this room is a vital element of OPM’s mission – to recruit, retain and honor a world-class 21st Century workforce.
OPM must recruit the best talent for the increasingly complex and high-skilled Federal jobs of the future. When we are recruiting that scientist who will find better ways to protect the air we breathe and the water we drink. When we talk to the engineer who will discover the newest technology to produce clean, reusable energy. When we are recruiting the researcher who will find the next cure for cancer. We can assure them that included in their Federal benefit package is affordable health insurance on a par with any other employer, coverage that will give them access to high quality care. We can assure them of that because year in and year out the partnership between all of you and FEHB makes it so.
It may be too early to assess the law’s full effect on bending the cost curve. Yet we have already seen evidence that the Affordable Care Act has had an impact on consumer spending, on employer premiums and overall health expenses.
We estimate that health spending grew by just 3.7 percent in 2012, the fourth straight year of historically low increases in spending.
The Kaiser Family Foundation’s 2013 annual survey of employer health benefits showed employer premiums rose by just four percent.
I’m glad that for three straight years, the average premium increase for Federal employees, retirees and their families enrolled in the FEHB was under 4 percent. This is the first time in 20 years we’ve seen such stability. I want to commend John and his negotiating teams at OPM and all of you for such a successful year.
But as we all know, these premium increases have come amidst difficult times for our Federal workforce. Federal employees have been through a sequester, furloughs, continued budget challenges and three years of pay freezes. In 2014 Federal workers received a 1 percent pay increase. President Obama’s 2015 budget proposal includes another 1 percent salary hike.
In light of the continuing tight budget, we must do all we can to control and lower health costs. The more we can all work to drive health costs down, the better we can keep premium increases in check.
As I mentioned, preventive care is an integral element of the Affordable Care Act. The preventive care and wellness programs that are woven into the fabric of all of your health plans will play a major role in educating our workforce in how to maintain a healthier lifestyle. . Congratulations to all of you who have focused on improving your rates of breast cancer screening, diabetes screening, and immunizations during 2013. The healthier Federal workers are, the less we as a nation will spend on health care.
We at OPM also have a responsibility to make sure that our consumers are getting quality and value for their premium dollars.
As you see in this year’s Call Letter, these are priorities for FEHB in the coming year. High on our list is managing prescription drugs. Prescription drugs represent 25 percent of total FEHB spending. We need to continue to focus on ways to make prescription drugs as affordable as possible while ensuring that FEHB members are getting access to safe, high quality medications.
We all know that it’s not enough to take care of people when they get sick. We must do all we can to keep the Federal workforce well. I know that FEHB carriers offer a wide variety of wellness programs.
But our employees are not participating in these programs in the numbers they should. We need to work together on this.
In the coming year, I urge you to look at your programs and to work with us to come up with incentives, processes and innovations that will encourage employees to take advantage of these programs. We will collaborate with you to get the word out to the Federal workforce that wellness programs work.
Since last year’s Carriers Conference, Congress added the Self Plus One enrollment category to the FEHB program. This new enrollment type, which will provide more flexibility to FEHB members, will start with the 2016 plan year.
This change will bring FEHB into step with other large employers, including state and local governments that offer three-tiered enrollment options.
It will align health plans with other federal benefits that OPM currently offers - the employee-pay-all dental and vision benefits. And, it allows an employee or retiree to choose a less expensive option which covers only the enrollee and one family member.
We look forward to working with you to implement this new enrollment category efficiently and effectively.
Also since last year, a landmark U.S. Supreme Court decision that struck down DOMA meant that Federal employees could at long last add their same sex spouses to their health benefit plans. We at OPM were prepared for this welcome decision. Within days of the ruling, we provided guidance to you about how Federal workers could immediately add their same sex spouses to their coverage. You worked quickly and efficiently to help provide this new benefit to our valued employees. And I want to thank you for your efforts.
Before I go, I want to talk to you about another important aspect of the Affordable Care Act, a provision that is integral to our partnership with the insurance industry: the Multi State Plan Program.
OPM’s development and administration of the MSP is an opportunity for us to broaden and deepen our successful partnership. I have no doubt that the 50-year historical collaboration between us is what led Congress to entrust OPM with this program. Together we will provide Americans with greater choices as they shop for health plans in the Marketplaces.
I appreciate the Blue Cross and Blue Shield Association’s embrace of the MSP. In 2014, more than 150 Multi State plan options are available in 30 states and the District of Columbia. I hope at this conference next year we will be able to welcome new issuers to the program.
When you participate in the Marketplace through our MSP program, you not only get to market the OPM seal of approval, but you get our partnership, a valuable asset in this new health insurance world.
Early indications are that enrollment in the MSP options is strong. The Affordable Care Act allows us to be flexible in implementing the program with a nationwide issuer, or with a group of issuers who operate in different parts of the country.
Our team of experts stands ready to assist you. Talk with us about how you can sign up. It would be good for the American people and good for you to have another seat at the table as the health care debate in this country continues.
Our employees are the Federal government’s most precious resource. Every day, Federal workers stand guard over our security. They fight forest fires. They keep watch over our environment. They provide care to our veterans. They ensure the safety of our transportation system.
We must make sure that we continue to provide the most affordable, comprehensive and cutting edge health care to these dedicated employees and their families while they are on the job and once they retire.
I know that together, we will continue to do just that.