Sunday, July 19, 2009

Government verses Private Insurance

While the debate rages on in Washington over Government run verses Private insurance for all Americans, one simple solution has been completely ignored. Open up the Federal Employees Health Benefits (FEHB) Program to everyone.

This like all employer group plans determines the cost of premiums by the number of people enrolled. The government like every other employer pays the greater part of the premium and the employee pays the smaller portion.

In the case of the government they actually dictate to the insurance companies the benefits they can offer and have a greater control of the cost of the premiums. In the old days under Blue Cross Blue Shield an employee had 100% of the cost for medical expenses covered by their plan. The government believed this was causing a high amount of employee absenteeism (calling in sick) so they told the insurance companies they had to curtail their benefits and could no longer pay 100% of an employees medical expenses.

Blue Cross Blue Shield sued but lost their case and the benefits were reduced. Now its pretty much standard policy that the insurance companies pay no more than 80% of the prevailing or reasonable fee for a particular treatment, after the annual deductibles and co-pays have been satisfied. This went down in the late 70s, early 80s.

There are people that believe opening up FEHB to everyone will not work. With all of the control Congress now has over the insurance companies that participate in the plan I cannot buy into the theory that it will not reduce the overall costs of premiums. With the increase in the numbers of people paying premiums the cost would absolutely be reduced.

The major benefit people receive from enrolling in the FEHB program is competition. The individual can pick the insurance provider, the types of benefits and control the amount they are willing to pay each and every year.

Are all Federal Employees or Retirees happy with the program or the cost, no. But, overall it is a successful program and would help to reduce the healthcare cost in America. It would also keep America from going bankrupt during a Recession and by allowing small business to join the program many more unisured Americans could be insured.

Congress will never allow small business into their exclusive club. They are above the average American and therefore must be treated better than everyone alse.

The public can find out more by going to

Federal Employees Health Benefits Program

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