[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





WE'D LIKE TO SEE YOU SMILE: THE NEED FOR DENTAL AND VISION BENEFITS FOR 
                           FEDERAL EMPLOYEES

=======================================================================

                                HEARING

                               before the

                     SUBCOMMITTEE ON CIVIL SERVICE
                        AND AGENCY ORGANIZATION

                                 of the

                     COMMITTEE ON GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 3751

 TO REQUIRE THAT THE OFFICE OF PERSONNEL MANAGEMENT STUDY AND PRESENT 
OPTIONS UNDER WHICH DENTAL AND VISION BENEFITS COULD BE MADE AVAILABLE 
  TO FEDERAL EMPLOYEES AND RETIREES AND OTHER APPROPRIATE CLASSES OF 
                              INDIVIDUALS

                               __________

                           FEBRUARY 24, 2004

                               __________

                           Serial No. 108-173

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform


                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia                 C.A. ``DUTCH'' RUPPERSBERGER, 
CANDICE S. MILLER, Michigan              Maryland
TIM MURPHY, Pennsylvania             ELEANOR HOLMES NORTON, District of 
MICHAEL R. TURNER, Ohio                  Columbia
JOHN R. CARTER, Texas                JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee          ------ ------
------ ------                                    ------
------ ------                        BERNARD SANDERS, Vermont 
                                         (Independent)

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

         Subcommittee on Civil Service and Agency Organization

                   JO ANN DAVIS, Virginia, Chairwoman
TIM MURPHY, Pennsylvania             DANNY K. DAVIS, Illinois
JOHN L. MICA, Florida                MAJOR R. OWENS, New York
MARK E. SOUDER, Indiana              CHRIS VAN HOLLEN, Maryland
ADAH H. PUTNAM, Florida              ELEANOR HOLMES NORTON, District of 
NATHAN DEAL, Georgia                     Columbia
MARSHA BLACKBURN, Tennessee          JIM COOPER, Tennessee

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     Ron Martinson, Staff Director
                Chris Barkley, Professional Staff Member
                            Reid Voss, Clerk
            Tania Shand, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 24, 2004................................     1
Text of H.R. 3751................................................     4
Statement of:
    Block, Abby, Deputy Associate Director, Office of Personnel 
      Management; Ed Wristen, president and CEO, First Health; 
      Dr. Stan Shapiro, vice chairman, CompBenefits; Jon 
      Seltenheim, chairman, National Association of Dental Plans; 
      and Howard J. Braverman, O.D., past president, American 
      Optometric Association.....................................    11
Letters, statements, etc., submitted for the record by:
    Block, Abby, Deputy Associate Director, Office of Personnel 
      Management, prepared statement of..........................    13
    Braverman, Howard J., O.D., past president, American 
      Optometric Association, prepared statement of..............    74
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................    70
    Davis, Hon. Danny K., a Representative in Congress from the 
      State of Illinois, prepared statement of...................     8
    Davis, Hon. Jo Ann, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     3
    Seltenheim, Jon, chairman, National Association of Dental 
      Plans, prepared statement of...............................    51
    Shapiro, Dr. Stan, vice chairman, CompBenefits, prepared 
      statement of...............................................    32
    Wristen, Ed, president and CEO, First Health, prepared 
      statement of...............................................    18

 
WE'D LIKE TO SEE YOU SMILE: THE NEED FOR DENTAL AND VISION BENEFITS FOR 
                           FEDERAL EMPLOYEES

                              ----------                              


                       TUESDAY, FEBRUARY 24, 2004

                  House of Representatives,
          Subcommittee on Civil Service and Agency 
                                      Organization,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:11 p.m., in 
room 2247, Rayburn House Office Building, Hon. Jo Ann Davis 
(chairwoman of the subcommittee) presiding.
    Present: Representatives Davis of Virginia, Blackburn, 
Chairman Tom Davis (ex officio), Davis of Illinois, Norton, and 
Van Hollen.
    Staff present: Ron Martinson, staff director; Chad Bungard, 
deputy staff director; Rob White, communications director; 
Chris Barkley, professional staff member; Reid Voss, clerk; 
John Landers, detailee; Tania Shand, minority professional 
staff member; and Teresa Coufal, minority assistant clerk.
    Mrs. Davis of Virginia. A quorum being present, the 
Subcommittee on Civil Service and Agency Organization will come 
to order.
    I want to thank you all for joining us today as we take a 
look at how we can make available better dental and vision 
benefits for members of the Federal family. I know this issue 
is of great importance to Federal employees, retirees, and 
their families. These two benefits are consistently at the top 
of their wish list.
    Earlier this year I introduced H.R. 3751, which requires 
the Office of Personnel Management to study the options for 
enhancing Federal dental and vision benefits, and to issue a 
recommendation to Congress by June 30th of this year. I felt it 
was time for OPM to reevaluate its dental and eye care 
offerings to the Federal Employees Health Benefits Program.
    For reasons that I expect OPM to explain in detail here 
today, the dental and vision benefits offered through the FEHBP 
have essentially remained unchanged for about 15 years. A lot 
has changed in that time. Primarily we have learned a great 
deal more about the importance of dental and vision care to our 
overall health. I think it is a black mark against the Federal 
Government that its current dental and vision offerings are so 
meager.
    We have held several hearings in this subcommittee and 
endorsed several pieces of legislation to assist the Federal 
Government in attracting and retaining talented workers. 
Employee benefits are another piece in this puzzle, because the 
Federal Government is lagging behind its competitors. Just look 
at dental benefits. Nearly every midsized and large private 
sector firm offers fairly generous dental care. Federal 
employees understand this disparity.
    My hope is that this hearing and my introduction of H.R. 
3751 can be the start of a collaborative process by which the 
House, the Senate, the administration, and industry 
representatives can determine the best way to enhance both 
dental and vision benefits while maintaining the overall 
strength of the FEHBP.
    I want to thank you all for being here today.
    And I would like to recognize my ranking member, Mr. Davis, 
to see if he has an opening statement.
    [The prepared statement of Hon. Jo Ann Davis and the text 
of H.R. 3751 follow:]

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[GRAPHIC] [TIFF OMITTED] T5156.004

    Mr. Davis of Illinois. Thank you very much, Madam 
Chairwoman, and let me thank the witnesses for coming.
    Visual health and oral health are integral to general 
health. Eye and oral diseases are progressive and becoming more 
complex over time. Our ability to eat, see, read, learn, and 
communicate all depends on good visual and oral health.
    Periodic eye and dental examinations are an important part 
of routine preventative health care. Many visual and oral 
conditions present no obvious symptoms; therefore, individuals 
are often unaware that problems exist.
    There are safe and effective measures to prevent the most 
common eye and dental diseases. That is why early diagnosis and 
treatment are important for maintaining good visual and oral 
health and why a vision and dental benefit should be made 
available to Federal employees and annuitants.
    We know that in 1987 the Office of Personnel Management 
stopped plans in the Federal health benefits program from 
adding new vision and dental packages. OPM did so for various 
reasons. However, that decision was made more than 15 years 
ago, and it is now time to take a fresh look at how we can meet 
the visual and oral health needs of Federal employees.
    Let's not be shortsighted. In the long run, preventive care 
through periodic examinations and doctor visits will help keep 
down long-term vision and dental costs due to early detection.
    I have worked in the health area for many years and prior 
to running for public office actually served as president of 
the National Association of Community Health Centers, and 
health was something that I paid a great deal of time on and 
attention to, and I often wondered why we didn't put as much 
emphasis on prevention and early detection even as we talked 
about cost containment and lowering the costs of health care. I 
think that we can be most effective in improving health status 
when we make sure that each and every individual has optimal 
opportunity to prevent themselves from getting ill to the point 
where they have to be institutionalized, hospitalized, or have 
expensive doctor visits and perhaps even surgery.
    So, Madam Chairwoman, I thank you for holding this hearing, 
and look forward to some very positive results.
    [The prepared statement of Hon. Danny K. Davis follows:]

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    Mrs. Davis of Virginia. Thank you, Mr. Davis.
    I would now like to recognize Ms. Holmes Norton for an 
opening statement.
    Ms. Norton. Thank you very much, Madam Chairwoman, and I 
very much appreciate your interest in augmenting the FEHBP and 
your bill, as well as your study.
    Even without vision and oral care, the FEHBP is behind the 
great Fortune 500 companies and has been for some time. So the 
fact that we are trying to catch up is nothing to congratulate 
ourselves about, but I am very pleased to see leadership of the 
Chair in focusing on yet another shortcoming. The problem I 
have is of course that when you already have a benefit plan 
where the employer does not pay what it would pay if it were a 
Fortune 500 company--and the last time I looked, there isn't a 
Fortune 500 company as big as the government of the United 
States--then of course to go forward and add to that raises yet 
another question, and that is who is going to pay for it. I 
think that employees should wonder whether we are going to get 
the kind of benefit that they got with long-term care: 100 
percent paid for by the employee. In that case, the employer 
becomes a vessel.
    Thank you very much, and it's good to have those who can 
afford it get it, but I would hate to see the idea of cost 
sharing gradually disappear from the FEHBP.
    Now, you could argue that with long-term care it's so 
expensive that's why the Federal Government couldn't possibly 
do it. Well, it could have done something. It could have done a 
little bit of it. But it did none of it. So my question, at a 
time when people all over the United States are striking, not 
for wages but for loss of health care, my question is, is the 
employer ready to pick up his share along with the employee? 
Because, if not, I'm not sure how the employees will look at 
this.
    Employees who can already afford it perhaps already pay for 
their dental care or for their oral care, so the employees I'm 
most concerned about are employees in the lower grades for whom 
some subsidy here could have some real meaning. And we have to 
recognize that employers who pick up part or all of the cost of 
health care in fact are calculating that in their wages. So in 
fact it's not ever free to the employee. But if the employee 
only becomes a vessel, then I'm not sure what role the employer 
is playing except to provide a group umbrella. And I suppose we 
should all be grateful for small favors. There are a lot of 
those group umbrellas that people can join right now. You can 
go out and join other kinds of groups outside of your employer 
today because they are forming as a result of the cost of 
health care.
    I am very concerned about the rising cost of FEHBP. I am 
not among those who hold FEHBP up the way it is always held up 
in all Presidential campaigns. They say look at this FEHBP. I 
know that Federal employees must say what are they talking 
about? If our costs are going up 10 percent a year or 12 
percent a year or 15 percent a year, what is happening out 
there in the rest of the marketplace?
    So I am concerned about how we would pay for this. And, 
frankly, I have a hard time with this if in fact there was not 
cost sharing here, because I believe it would be the beginning 
of the end of cost sharing.
    I would love to know what the figures are in the public 
sector. In the private sector there are many millions of people 
who are dropping their own health care or dropping family 
members or having employers drop health care or offload more of 
it onto employees because of the rising cost of health care. So 
if this is an add-on to today's health care cost for the 
employee, then I think the committee would want to look more 
closely at what we are doing for the employees, and I think 
that Uncle Sam ought to be willing to step up to the plate the 
way far smaller employers than our government does.
    Thank you very much, Madam Chairwoman.
    Mrs. Davis of Virginia. Thank you, Ms. Norton. That's why 
we've asked OPM to do a study on it and to give us some 
recommendations, because if we do anything we want to make sure 
we do what's right for the employees.
    And I would just testify from my own personal experience. I 
don't take FEHBP. I opted not to when I was elected because my 
husband's insurance through the city where he worked, where he 
retired from was actually better. But from a personal 
standpoint, I just spent $13,000 out of my own pocket for 
dental because we don't have dental. So if there is some way 
that we can help the Federal employees, we want to do that.
    Ms. Norton. Now we see an additional motivation, Madam 
Chairwoman.
    Mrs. Davis of Virginia. Actually, that was after the fact. 
But it has become an additional motivation.
    Mr. Van Hollen, welcome. Do you have an opening statement?
    Mr. Van Hollen. No, thank you, Madam Chairwoman. Just I 
appreciate the fact that you are holding this hearing and 
looking into this issue. So thank you.
    Mrs. Davis of Virginia. Thank you.
    I ask unanimous consent that all Members have 5 legislative 
days to submit written statements and questions for the hearing 
record, and that any answers to written questions provided by 
the witnesses also be included in the record. And, without 
objection, it is so ordered.
    I ask unanimous consent that all exhibits, documents, and 
other materials referred to by Members and the witnesses may be 
included in the hearing record and that all Members be 
permitted to revise and extend their remarks. Without 
objection, it is so ordered.
    I also ask unanimous consent that statements from Delta 
Dental of California and the National Association of Retired 
Employees may be included in the hearing record. And, without 
objection, it is so ordered.
    I would like to welcome our panel today, and to thank you 
all for coming and for being patient with us.
    With us today we have Ms. Abby Block, the Deputy Associate 
Director of Office of Personnel Management. After Ms. Block, we 
will hear from Mr. Ed Wristen, the president and CEO of First 
Health. Then we are going to be hearing from Dr. Stan Shapiro. 
Dr. Shapiro is the vice chairman of CompBenefits. And then 
after Dr. Shapiro we will hear testimony from Mr. John 
Seltenheim, the chairman of the National Association of Dental 
Plans. And, last but not least, will be Dr. Howard J. 
Braverman, the past president of the American Optometric 
Association.
    It's standard practice for this committee to administer the 
oath to all witnesses; and if all witnesses could please stand, 
I will administer the oath. If you would stand, please, and 
raise your right hands.
    [Witnesses sworn.]
    Mrs. Davis of Virginia. Let the record reflect that the 
witnesses have answered in the affirmative, and you may be 
seated.
    The panel will now be recognized for an opening statement, 
and we ask that you summarize your testimony in 5 minutes, and 
that any further statement you may wish to make will be 
included in the record.
    I would again like to first welcome Ms. Abby Block, and I 
thank you for being with us today, Ms. Block. You are now 
recognized for 5 minutes.

STATEMENTS OF ABBY BLOCK, DEPUTY ASSOCIATE DIRECTOR, OFFICE OF 
  PERSONNEL MANAGEMENT; ED WRISTEN, PRESIDENT AND CEO, FIRST 
  HEALTH; DR. STAN SHAPIRO, VICE CHAIRMAN, COMPBENEFITS; JON 
SELTENHEIM, CHAIRMAN, NATIONAL ASSOCIATION OF DENTAL PLANS; AND 
HOWARD J. BRAVERMAN, O.D., PAST PRESIDENT, AMERICAN OPTOMETRIC 
                          ASSOCIATION

    Ms. Block. Thank you, Madam Chairwoman, and members of the 
subcommittee. I am pleased to appear before you today on behalf 
of Director Kay Coles James to discuss the views of the Office 
of Personnel Management on dental and vision benefits under the 
Federal Employees Health Benefits Program.
    Director James has always expressed a willingness to review 
the policies and programs affecting the pay and benefits of 
Federal employees in order to ensure their effectiveness for 
employees, the Government, and the taxpayer. As you know, this 
year for the first time we made flexible spending accounts 
available to Federal employees. Pretax dollars deposited into 
those accounts can be used to cover the cost of deductibles and 
co-payments and other health care costs that are not covered by 
FEHBP plans, and also to pay eligible dependent care costs. 
Director James is firmly committed to the ongoing review of all 
the benefits offered under the FEHB Program.
    Of course, given the ever increasing cost of providing 
health benefits coverage throughout the Nation, we must be 
mindful of the effects of any changes on the cost of coverage 
for Federal employees, retirees, and their families. Under the 
leadership of Director James, and through a combination of 
tough negotiating and careful scrutiny, we have managed to 
restrain the cost increases for our program in recent years 
below the level for the economy generally. We would not want to 
do anything that would not reflect the same level of due 
diligence and careful concern.
    With regard to your bill, H.R. 3751 would of course require 
OPM to study and present recommendations under which dental and 
vision benefits could be made available to Federal employees 
and retirees and other appropriate classes of individuals. 
Regrettably, since the bill was introduced so recently, the 
administration has not yet developed a position. Therefore, I 
am not able to express a view on it at this time. I can say, 
however, that even where there is no objection to conducting a 
study or review, traditionally the administration has objected 
to any statutory requirement to make recommendations.
    I will, of course, be happy to discuss the extent of dental 
and vision coverage under the current FEHB Program. At Director 
James' request, we have been gathering information on dental 
and vision care programs so we can be aware of the practices of 
other employers and cognizant of industry trends. I also would 
be happy to offer any information I have about how such 
programs are structured and administered by the industry for 
other purchasers. I would be pleased to answer any questions 
you might have in that regard.
    [The prepared statement of Ms. Block follows:]

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    Mrs. Davis of Virginia. Thank you, Ms. Block.
    Mr. Wristen, you will be recognized for 5 minutes.
    Mr. Wristen. Thank you, Chairwoman Davis, and members of 
the committee.
    I am Ed Wristen, president and CEO of First Health. First 
Health is a premier national health benefits services company 
and provides integrated managed care solutions serving the 
group health, workers compensation, State agency and Federal 
Government markets.
    First Health has been a provider of managed care services 
in FEHBP since 1985. Since July 2002, First Health has served 
as the plan administrator, underwriter, managed care service 
provider and PBM, fully integrating all those functions for the 
second largest plan in the program, Mail Handlers Benefit Plan. 
We appreciate this opportunity to present testimony on H.R. 
3751.
    As a company that strives to remain at the cutting edge in 
providing quality health care options, we believe we can offer 
valuable perspective and assistance in this matter.
    What are the current options for dental and vision 
benefits? We would like to emphasize that Federal employees 
currently have dental and vision benefits available to them for 
many plans participating in FEHBP. Currently, there are 12 fee 
for service plans, 6 open to all Federal employees and 6 closed 
plans limited to employees of specific agencies. Approximately 
70 percent of all FEHBP members are in these 12 plans. Five of 
those six open fee for service plans and three of the six 
closed fee for service plans have dental benefits included in 
their FEHBP offerings. The remaining 30 percent of FEHBP 
enrollees are in some 210 comprehensive, or HMO plans, some of 
which offer dental coverage in the FEHBP benefit packages.
    In addition, five open fee for service plans with dental 
also offer supplemental dental plans to their members at 100 
percent member cost that augment FEHBP offerings, and three 
offer supplemental vision plans.
    Finally, four of the six closed plans offer supplemental 
dental and vision, and in addition many of the HMOs in FEHBP 
offer supplemental dental or vision benefits.
    The benefit issue OPM is to study is not one characterized 
by lack of availability. Numerous options already exist for 
Federal employees to obtain dental and vision benefits. The 
issue that merits attention is how the delivery of these 
benefits can best be enhanced while maintaining a strong and 
viable FEHBP.
    How can the existing structure be enhanced? Obviously, what 
would be most attractive to Federal employees is the 
enhancement of dental benefits and the addition of vision 
benefits to current FEHBP offerings. If this were done, the 
Federal Government would shoulder most of the increased cost. 
However, budgetary constraints impacting FEHBP since the early 
1980's have served to limit virtually any benefit increases, 
especially those for dental or vision benefits. We do not see 
these constraints changing substantially in the current 
environment, although some relaxation of this situation would 
be warranted and welcome.
    What OPM has done to address budgetary constraints is 
arguably a reasonable approach: They have allocated scarce 
government contribution dollars to preserve medical benefits 
rather than permitting benefit increases for dental benefits or 
the addition of vision benefits existing in FEHBP plans since 
1987. Thus the dental benefit offerings with FEHBP have been in 
effect at 1987 levels. This has led to the state of affairs 
where they are considered inadequate by 2004 standards.
    What about supplemental plans? Many of the FEHBP plans 
offer various supplemental dental plans to compensate for the 
FEHBP dental coverage occasioned by the freeze. This has been 
done with OPM's knowledge, encouragement, and assistance. OPM 
allows FEHBP carriers to use their official plan brochure to 
announce the availability of non-FEHBP offerings, such as 
dental and vision supplements, and permits FEHBP to discuss the 
offerings at health fairs. These dental and vision supplemental 
offerings have become part of these FEHBP plans' total 
offerings to Federal employees.
    Why is the government carve-out for dental and vision not a 
solution? Introducing a new carved-out dental or vision benefit 
plan will upset the current competitive balance in FEHBP which 
has served the government and Federal employees since inception 
in 1960, and it will do so without any discernible benefit as 
these benefits are already available. There is no magic bullet 
of cost savings or quality of benefit gains. Instead, doing so 
by creating an additional subcontracting system would add cost 
and complexity where there already exists a system and 
experienced carriers providing dental and vision benefits. The 
existing system can handle any enhancements that Congress or 
OPM desire to see made in dental or vision benefits. And with 
minor adjustments, they are currently offering benefits to the 
broad health care needs of Federal employees.
    Why is the long-term care program not a model? The issue at 
the heart of this bill doesn't require a new contracting system 
like created for long-term care. That offering was an entirely 
new benefits program. Dental and vision have been an integral 
part of FEHBP for years. We already have the infrastructure in 
FEHBP, and using the current FEHBP and its carriers will 
preserve the competitive environment. The system of balanced 
competition is a model for private sector and Medicare reform. 
It shouldn't be tampered with. Any new resources by the 
Congress or OPM should be used to enhance the existing program.
    Chairwoman Davis and members of the committee, thank you 
again for this opportunity to share our views. I hope that my 
testimony helps clarify some of the issues associated with the 
delivery of dental and vision benefits, and would welcome the 
opportunity to further work with you and your committee as you 
examine those issues.
    [The prepared statement of Mr. Wristen follows:]

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    Mrs. Davis of Virginia. Thank you, Mr. Wristen.
    I would now like to recognize Dr. Stan Shapiro. Thank you 
for being with us today, and you may proceed with your 
statement. You are recognized for 5 minutes.
    Dr. Shapiro. Chairwoman Davis and members of the 
subcommittee, my name is Dr. Stanley Shapiro, and for more than 
33 years I have been privileged to provide dental benefits, 
both as a practicing dentist as well as an executive officer of 
one of America's leading dental benefits companies. I am 
grateful for this opportunity to speak with you today in 
support of H.R. 3751, which may potentially lead to expanding 
Federal employee health care benefits to include voluntary 
dental and vision plans.
    Our Nation has made great strides in educating Americans 
about the importance of oral health, and there is a growing 
recognition that oral health is integral to general health. New 
products, therapies, and technologies have enabled people to 
retain their natural teeth throughout their lives, thereby 
enhancing their health and well-being. Today, the percentage of 
Americans who receive dental care is higher than ever before, 
and I believe this has occurred as a result of third party 
funding through government programs for the underserved and 
private dental coverage offered in the workplace. Statistics 
indicate that 54 percent of all Americans currently have dental 
coverage, yet throughout my career I have witnessed the role 
that cost has played as a barrier to accessing dental care. 
This is unfortunate since it is well established that dental 
disease is preventable, and children who receive routine 
preventive care have the opportunity to live their lives free 
from dental cares and periodontal disease. Oral Health in 
America, a report of the Surgeon General in the year 2000, 
stated that children from families without dental insurance are 
three times more likely to have dental needs than children who 
come from families with dental insurance.
    The FEHBP is a successful model for demonstrating the 
purchasing leverage of the Federal Government and the ability 
to provide choice among the types of plans offered. But while 
some of these medical plans include dental and vision benefits, 
they are difficult to evaluate and typically provide very low 
levels of coverage when compared to the wide array of plans 
that are readily available in both the public and private 
sectors.
    To demonstrate this point, we have evaluated 150 FEHBP 
medical plans to define the levels of dental benefits coverage. 
Out of 150 plans, only 1 provided preventive dental care for 
children. Out of 150 plans, only 14 offered orthodontic 
coverage. Furthermore, reimbursement levels and annual maximum 
benefits were limited. Similar results occur for vision 
benefits, creating a confusing basis for FEHBP participants to 
evaluate the cost of high option medical plans against the 
actual benefits received. All too often there are failed 
expectations, and the perception is that dental and vision 
benefits offered by FEHBP are inadequate and disappointing. 
This is exacerbated by the escalating costs and structural 
changes in health plans that Federal employees encounter when 
selecting the appropriate medical coverage for their families. 
The FEHBP acknowledges the low dental benefits levels and 
communicates this fact on its Web site to Federal employees. It 
responds to a frequently asked question, by stating, ``Everyone 
wants to keep premium increases as low as possible, so 
generally, to increase benefits plans make tradeoffs. We would 
not want to sacrifice medical benefits to get dental or vision 
benefits.''
    In contrast, employees of 48 State governments have 
voluntary dental benefits, and 44 of those are stand-alone 
plans that offer benefits which are superior to those included 
in the FEHBP medical plans. In my home State of Florida, for 
instance, State employees may select from eight different 
stand-alone dental plans, and more than 50 percent of employees 
currently participate in one of the plans. For the past 3 
years, and despite rising medical costs, enrollment in the 
voluntary dental plans in Florida has increased as a percentage 
of the work force from 49 percent in 2001 to 55 percent in 
2003. The same trends hold true for the voluntary vision plan. 
In the private sector, dental plans are both varied and 
affordable. Of the three most popular plan types that include 
orthodontic coverage, the average monthly premium for an 
employee is $14.10 for a dental HMO, $22.07 a month for a 
dental PPO, and $28.20 for a full indemnity plan. An employee 
can cover his or her spouse and children through a dental HMO 
for an average monthly premium of only $36.35. Once enrolled in 
the plan, there are typically no deductibles or annual 
maximums, no charges for preventive care, minimal direct cost 
for restorative care, savings of up to 50 percent on major 
services, and reductions of 25 to 50 percent in the cost of 
orthodontic treatment. It is no surprise that employees 
appreciate this purchasing leverage and utilize dental plans to 
facilitate their access to care.
    Employers have learned that dental benefits are an 
important component of employee benefit programs. Surveys 
indicate that 95 percent of employers with 500 or more 
employees provide dental benefits as well as 48 of the 50 State 
governments and thousands of county, city, and municipal 
government and school districts.
    In the competition for quality employees, voluntary dental 
and vision benefits fulfill employee expectations and create a 
competitive advantage for any employer. With the largest work 
force in America, the Federal Government can establish without 
cost a more comprehensive ancillary benefits program that will 
enhance the oral and general health of Federal employees and be 
perceived with value by all participants.
    To that end, I urge you to support H.R. 3751. Thank you 
very much.
    [The prepared statement of Dr. Shapiro follows:]

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    Mrs. Davis of Virginia. Thank you, Dr. Shapiro.
    I now would like to recognize Mr. Seltenheim. You are 
recognized for 5 minutes.
    Mr. Seltenheim. Good afternoon, Chairwoman Davis, Ranking 
Member Danny Davis, and members of the subcommittee. Thank you 
for the opportunity to testify before the subcommittee on 
providing stand-alone dental benefits to Federal employees. My 
name is Jon Seltenheim, and I am chairman of the Board of 
Directors of the National Association of Dental Plans.
    NADP represents the vast majority of regional and national 
companies that offer dental benefits. I testify today 
supporting H.R. 3751. NADP believes OPM will conclude as we 
have that FEHBP should provide dental benefits in the same 
excellent manner they provide medical insurance coverage to 
Federal employees, their families, and retirees. However, 
unlike the majority of private sector programs, FEHBP provides 
little in the way of dental coverage.
    The first portion of my testimony points out the value of 
dental coverage. And this is not simply anecdotal, but comes 
from Federal Government reports, empirical data, claims data 
from our member companies, and reports generated from impartial 
research institutes.
    The landmark 2000 Surgeon General Report, ``Oral Health in 
America,'' has as its primary theme ``Oral health is integral 
to general health.'' This report documented that the two 
primary dental diseases, caries and periodontal disease, are 
still common and widespread despite safe and effective measures 
to prevent them. The report goes on to document that the 
primary barrier to dental care is cost, and the existence of 
dental benefits helps to overcome this barrier and provide 
access to care.
    Beyond cost, research continues to show that the potential 
association of dental disease, especially advanced periodontal 
conditions, with coronary heart disease, has an association 
with coronary heart disease, stroke, and low-weight premature 
babies. Dental disease does have broader health and financial 
impacts which must be considered in reviewing the value of 
dental benefits.
    In the 2000 report of the Surgeon General, the estimate was 
that 108 million Americans did not have access to a dental 
benefit, about two and a half times the uninsured medical 
population. The report also noted that 70 percent of 
individuals with private dental insurance reported seeing a 
dentist in the past year, while 50 percent of those without 
dental benefits did, a 120 percent difference.
    So you can clearly see that dental benefits facilitate 
people going to the dentist. And as the report notes, 
preventive care is essential to keeping down overall dental and 
medical costs, because early detection of other diseases can be 
found through oral checkups, especially things like oral 
cancer.
    The National Institute of Dental and Craniofacial Research 
estimates that for every dollar spent on dental disease and 
prevention, $4 is saved in subsequent treatment costs. 
Therefore, promoting access to dental care is essential to 
keeping up our Nation's oral and general health.
    Based on the 2003 NADP/DDPA dental benefits report, 
enrollment is conservatively estimated in the year 2002 to be 
154 million Americans, or about 54 percent of the population 
have dental coverage. This is a 63 percent increase from the 
1989 HHS report.
    The products that comprise the market have changed over 
time with the most recent growth being in the PPO market and 
discount dental segments. The most accurate look at what U.S. 
employers provide in terms of dental benefits is the Mercer 
Survey of Employer Sponsored Health Plans. This 2003 report 
found that 66 percent of all employers provided dental, 96 
percent of employers with more than 500 employees, and 98 
percent of large employers, those with over 20,000 employees, 
provided a dental benefit. For county, city, and State 
government entities, the survey revealed that 95 percent of 
government employers with more than 500 employees offered 
dental benefits, with a median deductible and maximums of $50 
and $1,000 respectively. This would indicate that most are 
offering comprehensive fee-for-service programs. This is 
significant as it definitively illustrates that FEHBP is out of 
step in this arena with similarly situated large employers, 
whether private or governmental.
    In conclusion, the study requested of OPM is timely and 
important to the oral and physical health of Federal employees. 
NADP believes that offering a dental benefit to Federal 
employees will not only provide a valued dental benefit from 
the employee's perspective, but will also serve to provide a 
benefit package that is more competitive with other 
governmental, commercial and military offerings. NADP stands 
willing to provide additional detail in these and other areas 
of investigation by OPM in response to the study requested by 
H.R. 3751.
    [The prepared statement of Mr. Seltenheim follows:]

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    Mrs. Davis of Virginia. Thank you, Mr. Seltenheim.
    Dr. Braverman, if you will bear with us for a moment. We 
have been very blessed to have our chairman of our full 
committee Chairman Tom Davis join us, and he is no stranger to 
caring about our Federal employees. And Chairman Davis, you are 
recognized for an opening statement.
    Chairman Tom Davis. Well, first of all, thank you very much 
for being with us, and thank you, Madam Chairwoman and the 
other members. I think you can see the level of interest here 
on the subcommittee and full committee in trying to move this 
ahead.
    FEHBP I think is a great program, but it's not going to 
remain a model for excellence in employer-provided health care 
coverage unless we continue to explore avenues to enhance the 
care and choice provided, And I would ask to put my entire 
statement in the record if that will be OK.
    Mrs. Davis of Virginia. Without objection.
    [The prepared statement of Chairman Tom Davis follows:]
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    Chairman Tom Davis. But we appreciate you being here today, 
and I think we would like to move ahead on this if we can. But 
see how the hearing goes, and maybe we can proceed to markup in 
the next few weeks. Thank you for your leadership.
    Mrs. Davis of Virginia. Thank you, Mr. Chairman.
    Dr. Braverman, thank you so much for being patient, and now 
we will recognize you for 5 minutes.
    Dr. Braverman. Thank you.
    Chairwoman Davis and Chairman Davis and members of the 
subcommittee, I am Howard Braverman, past president of the 
American Optometric Association. Currently, I am chairman of 
the AOA's Industrial Relations Committee and I am proud today 
to represent the American Optometric Association on this most 
important issue that's before you.
    The AOA is a national organization that represents more 
than 30,000 doctors of optometry, educators, and students. We 
are dedicated to improving the visual health of the public, and 
appreciate the opportunity to be here today to discuss the 
important issue of vision care in the Federal work force.
    AOA fully supports the intent of H.R. 3751 to require the 
Office of Personnel Management to study the issue of vision and 
dental benefits, and also to recommend to Congress how these 
can best be offered to all Federal employees. This is not only 
an important benefit, but an important health care issue, one 
that can enhance both employees' quality of life and their 
efficiency and job performance in the workplace. We commend you 
for your leadership on this issue.
    In my remarks today, I will outline for you the need 
Americans, especially those of working age, have for routine 
vision care as well as the extent to which employees desire a 
vision benefit.
    The U.S. Department of Health and Human Services estimates 
that 64 percent--that's 64 percent of the work force older than 
17--need some form of visual correction. But in addition to the 
work force, we are really talking about 160 million Americans 
who need eyeglasses or contact lenses. And the sad truth is 
that fewer than 93 million get regular vision health care.
    Today, vision care has become a valuable benefit not only 
to employees but also to their employers. There are a number of 
factors that are influencing that realization to both employer 
and employee. The first is presbyopia. In the aging work force 
it is the No. 1 reason why employees today are seeking a vision 
benefit that not only includes a comprehensive eye health 
examination but glasses or contact lenses at a reasonable cost, 
for by age 40 people start to experience a visual loss in the 
ability to read due to the aging process.
    The second reason is that computers in the workplace have 
now caused a new syndrome called computer vision syndrome 
[CVS]. Workers who spend considerable time at computers are 
significantly at risk for this syndrome that causes headaches, 
dry eyes, and other related problems. The ability to have 
regular eye health examinations and glasses at a reasonable 
cost can go a long way to combat this problem.
    Employees today have realized that eye health care is a 
must for their families. Mothers and fathers have learned that 
if their children can't see then they can't learn. And today, 
the State of Kentucky requires children to have a comprehensive 
eye health examination, not just a screening, prior to entering 
public school. However, whether it's required or not, parents 
are realizing that it's most important to have their children's 
eyes examined prior to entering school. A voluntary vision 
benefit would be a great help to employees to pay for their 
families' regular eye health care and glasses or contact 
lenses.
    Routine eye examinations provide an opportunity for early 
detection of potentially life threatening health problems, such 
as high blood pressure, arteriolosclerosis, and diabetes, 
diseases which, if they are not detected early, can result in 
major and expensive complications. There are many other serious 
conditions that can be identified through eye health 
examinations. They include glaucoma, cataracts, and macular 
degeneration, and of course diabetic retinopathy. Early 
treatment of these conditions is the key to avoiding serious or 
total vision loss.
    Our senior citizens and our retirees have a great need for 
vision care, but only 16 percent have vision benefits. Forty 
percent of America's senior citizens report that the cost of 
routine eye examinations is just prohibitive. A recent Family 
and Work Institute study also found vision care to be one of 
the chief benefits that employees seek. In this study, vision 
benefits ranked second among nearly 40 optional benefits as the 
program for which they were willing to trade an existing 
benefit. In response to this demand, vision care benefit plans 
are more and more becoming one of the tools employers use to 
compete for talented employees.
    For these reasons, and because people wear glasses and/or 
contact lenses for cosmetic reasons, a voluntary vision benefit 
for Federal employees will help control costs of these health 
requirements. The cost of a vision plan is low, about 3 percent 
of the cost of a medical premium. On average, American 
employees and their families would pay between $8 and $10 per 
month for their vision benefit. The premium is not so high that 
workers do not find it an attractive addition to their benefits 
portfolio.
    The American Optometric Association supports regular eye 
examinations for everyone, and strongly endorses a voluntary 
benefit for Federal employees. We would be pleased to be of 
service in helping to point out the important considerations 
for selecting a vision plan. Improved access to eye care is an 
important component in any comprehensive health care strategy.
    Before closing, I would like to also urge the subcommittee 
to favorably consider another piece of legislation, H.R. 3268, 
introduced by Congressman Cummings. H.R. 3268 would extend the 
same glaucoma screening coverage provided today by Medicare to 
Federal employees who are in high risk populations. This is a 
simple yet important step in the early detection and treatment 
of this debilitating disease. Caught early enough, glaucoma can 
be managed and serious damage, which can include blindness, can 
be prevented. The long-term savings both to society and to 
individuals whose quality of life will be preserved as a result 
of these screenings is well worth the modest investment to the 
program.
    Thank you again for the opportunity to appear before this 
subcommittee, and I will of course be happy to answer any 
questions.
    [The prepared statement of Dr. Braverman follows:]

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    Mrs. Davis of Virginia. Thank you, Dr. Braverman, and thank 
you to all of our witnesses.
    I would like to now move into the question-and-answer 
period, and I would like to yield to our Civil Service 
Subcommittee ranking member, Danny Davis. Mr. Davis, you have 
the floor.
    Mr. Davis of Illinois. Thank you very much, Madam 
Chairwoman, and this is a question perhaps we could each 
respond to. Oftentimes when we start talking about dental 
health and the provision, there is a perception that it is too 
costly to provide. How do you respond to that perception?
    Mr. Seltenheim. On a percentage basis of cost versus the 
medical premium, it's about 8 to 10 percent of the total 
medical premium that we see today. So we would say that it's an 
excellent benefit in relation to cost.
    Dr. Shapiro. I would add, sir, that in the marketplace 
today there are such a wide variety of plans that if they were 
offered in a balanced program where this variety were added 
people could access the plan that best suited their individual 
needs. And as I indicated in my testimony, the price of some of 
these plans is very modest. You can then select the plan that 
is best structured to help you accomplish the types of cost 
savings you need to access your dental care.
    Mr. Davis of Illinois. Would you have any recommendations 
in terms of cost sharing? That is, any part or percentage the 
employer should pay with the employee paying the rest.
    Dr. Shapiro. My experience over my career of 25 plus years 
in this industry is that every employer views it in a different 
way. I will tell you, however, that in purely voluntary plans 
where there is no cost sharing, there is still a very high 
demand by employees. As the cost sharing goes up, of course 
then those numbers go up as well.
    Mr. Seltenheim. And I would add that, you know, you can 
start with no contribution, you can then move to some employer 
contribution. And typically what the larger Fortune 500 firms 
are doing today is they are simply giving health credits that 
go toward medical and dental, so the employee has the choice as 
to the combination of medical and dental plans that they would 
choose to pursue based off of what their individual benefit 
needs are. So a family is going to have different types of 
benefit needs than an older couple or a single, so many 
employers are going to benefit credits and using that as a way 
of allowing the choice to be the employee's.
    Mr. Davis of Illinois. Are we familiar with any research 
which delineates how important individuals feel that vision 
care is, how people feel about their vision, and the extent to 
which it should be taken care of?
    Dr. Braverman. I can't speak to any particular plan, but I 
would be happy to supply the committee with the American 
Optometric Association studies that have shown how important 
vision care is and the advantages of having a voluntary vision 
plan. For example, the average cost of an eye examination and 
eyeglasses is well over $300. We are just looking at the 
premium for a stand-alone voluntary vision plan, it is one-
third of that. So certainly we would be happy to supply you 
with that type of information, sir.
    Mr. Davis of Illinois. Thank you very much.
    I have no further questions, Madam Chairwoman.
    Mrs. Davis of Virginia. Thank you, Mr. Davis.
    Ms. Block, what is OPM's view of the adequacy of our 
current FEHBP dental and vision benefits, and how does it 
compare with the private sector?
    Ms. Block. Well, I don't have extensive data. My 
understanding is that there is a very broad range of what's 
actually offered in the private sector. So there is not a 
single model out there that one could compare us to. Without 
doubt, as has been said, we have established certain priorities 
in the FEHB Program, and those priorities have been in place 
for a number of years. And we work very, very hard, and under 
the guidance of Director James, as you know, we have worked 
particularly hard in the last few years to keep our premium 
increases below the national average and affordable for Federal 
employees and retirees.
    Mrs. Davis of Virginia. Let me interrupt you.
    Ms. Block. And so there is a tradeoff involved.
    Mrs. Davis of Virginia. Let me interrupt you right there. 
You said that those benefits have been in place for many, many 
years. Why hasn't OPM allowed any increases in the benefits 
since 1987?
    Ms. Block. Because to have allowed those increases without 
reducing medical benefits would have caused even greater 
premium increases than we have faced.
    Mrs. Davis of Virginia. Does the administration have a 
position on providing an increase in dental and vision benefits 
for the Federal employees?
    Ms. Block. The administration does not have a position as 
yet on that issue.
    Mrs. Davis of Virginia. When do you expect them to have a 
position on what I consider to be a very important issue?
    Ms. Block. I don't have a specific timeframe. But given the 
introduction of your bill, we are clearly looking at it.
    Mrs. Davis of Virginia. What kind of a plan do you think 
that the Federal employees would probably take most advantage 
of? A stand-alone or what? Do you know?
    Ms. Block. I think that all of the issues that have been 
raised both by members of the subcommittee and the members of 
the panel are exactly the kind of issues that we would have to 
consider were we to do the study proposed under H.R. 3751. So I 
don't have an opinion at this time. Those are exactly the right 
issues to look at.
    Mrs. Davis of Virginia. Is it possible to increase, in your 
opinion, the dental and vision benefits within FEHBP without 
expending any additional Federal money by reducing other rarely 
used health benefits currently offered by some of the plans? 
Assuming there are some pretty rare benefits that aren't used.
    Ms. Block. Well, there really aren't any rare benefits that 
aren't used. There is some group of people somewhere that are 
using every single benefit that is available now. The rate at 
which people use benefits of course varies, but the nature of 
the benefit dictates that certainly fewer people go to the 
hospital than visit the doctor; but we surely wouldn't want to 
reduce hospital benefits because that's the case. So we have 
carefully balanced the benefits with the help of our partners, 
the insurance carriers, over the years to try to provide as 
good a balance of comprehensive benefits as we believe is 
affordable for our Federal employees and retirees.
    Mrs. Davis of Virginia. What if you had an enrollee paid 
stand-alone package as opposed to an increase in the dental/
vision benefits within the FEHBP? Do you think that would 
provide the best opportunities to select coverage suited to the 
needs of a particular employee and her family if it were an 
employee-paid stand-alone?
    Ms. Block. That would be one of the things we would have to 
look at as we study the issue more carefully toward evolving an 
administration position. I don't have a position at this time.
    Mrs. Davis of Virginia. Do you think that offering a stand-
alone dental/vision plan would result in damage to the current 
competitive foundation of the FEHBP, since current FEHBP health 
plans can distinguish themselves by combining supplemental 
dental policies with their health benefit plan?
    Ms. Block. I had not thought of it in that context, but it 
would certainly be something in the course of a study that we 
would want to discuss with the participating carriers in the 
FEHB program.
    Mrs. Davis of Virginia. And just to clarify one thing, you 
said you are not allowed to give us recommendations? Is that 
what you said?
    Ms. Block. Yes. I believe that is the position of the 
Department of Justice that the legislative branch cannot 
require the executive branch to provide recommendations.
    Mrs. Davis of Virginia. Thank you very much, Ms. Block.
    Ms. Holmes Norton.
    Ms. Norton. I don't know if this is the park police case or 
not sprouting forward, Ms. Block, but my sympathy is with you. 
How many--approximately what percentage of employees have some 
dental health through FEHBP?
    Ms. Block. I think that depends on whether you consider 
what's available within the FEHBP plans, per se, or as Mr. 
Wristen mentioned in his statement, the various supplemental 
plans that are available.
    Ms. Norton. Give me both.
    Ms. Block. If you include the ones that have some 
supplemental benefit and/or an FEHBP benefit available, you are 
probably looking at close to 70 percent of the employees in the 
program. I don't have the exact number off the top of my head.
    Ms. Norton. So would you therefore characterize this as 
less a matter of access than of cost, since it looks like a 
great many have some form of dental insurance?
    Ms. Block. I think it's a question of how people view 
access, how or where they are, or what's available to them 
through the various plans, and what their expectations are.
    Ms. Norton. Would most of these--I note, for example, in 
Mr. Wristen's testimony--and I'm quoting here at page 2, the 
five open fee for service plans offer supplemental dental 
benefit plans to members at 100 percent of member cost. All of 
those supplemental plans would be at 100 percent of member 
cost. Now, it's hard for me to get around what you have done 
because it's hard for me to say that you have made an incorrect 
judgment in assuming that simply adding dental could be done 
without some kind of tradeoff, unless the Federal Government 
were willing to step up somehow with a greater amount of money. 
Let me ask you this. Given your experience--and don't tell me 
you haven't done a survey, I understand that. Do you believe 
employees would rather have a greater contribution to their 
FEHBP plan, greater than 70 percent or whatever it is, if they 
were given that choice as opposed to dental and vision 
additions to their plan?
    Ms. Block. Ms. Norton, I truly am in no position to answer 
that question. I simply don't know the answer. I can't speak 
for Federal employees as a group.
    Ms. Norton. That's something--you know what? I don't know 
why FEHBP wouldn't at least--since 1987 have wanted to find out 
what employee preferences are. It seems to me that you ought to 
be doing that every few years anyway. Could I ask that you do 
that, to find out what their preferences are without promising 
to do anything, which are you not in a position to do anyway?
    Ms. Block. Well, I'm not in a position to promise that we 
could do such a survey, but it's certainly something that we 
could consider.
    Ms. Norton. Let me enter this notion about a wholly 
different infrastructure. Clearly, if an employee wants to pay 
for it, they can get dental, some dental. Now, are most of 
these plans--what we are accustomed to hearing is that these 
companies will pay for an itsy bitsy amount of what the dental 
work costs. I'm not sure about vision work. Are most of these 
70 percent employees getting fairly minimal benefit in costs 
toward their dental work out of these plans?
    Ms. Block. I think each plan has a different structure, so 
I can't really generalize for all of them. Clearly, always, as 
with the FEHBP in general, premiums have to cover the cost of 
providing the benefit. That's always the issue. You always need 
to be sure that you have enough revenue to provide the services 
that you are contracting to provide. And that's why I don't 
know the answer. We don't get involved in any way with the non-
FEHBP dental offerings, so I don't know data on them.
    Ms. Norton. What about the FEHBP dental offerings? Is that 
minimal? Tell me what you do know, Ms. Block.
    Ms. Block. The FEHBP, the current FEHBP offerings are 
typically a fee schedule, and that fee schedule has not 
increased in recent years.
    Ms. Norton. So that's what makes the amount so low that the 
employee can get?
    Ms. Block. And that's typical. There are exceptions to 
that. I mean, some of the HMOs actually provide services, for 
example. So again, because we have so many choices in the FEHB 
Program, there is no single structure or benefit pattern that I 
can say is typical of all of the FEHBP.
    Ms. Norton. What I'm confused about, and perhaps you, Ms. 
Block, perhaps the other panelists, can help me out on, is the 
notion of a stand-alone plan. I mean, why would we want an 
entirely new infrastructure that somebody has to pay for? 
That's what we have now. We have thousands of insurance 
companies, and that's where all our money goes. Our money 
doesn't go to health care, it goes to keep health care plans 
running. So once somebody tells me that we need another stand-
alone something, I want to know more about what you mean by a 
stand-alone plan, why whatever we are talking about couldn't 
just be part of FEHBP. That stands right there. Why couldn't we 
just incorporate it in there? What is to be gained by a wholly 
new infrastructure for some of the health care we would provide 
our employees?
    Ms. Block. Well, since we have not made any proposal in 
terms of any approach, I would defer to the other members of 
the panel who have addressed this issue.
    Mr. Seltenheim. In terms of an objective for employees, I 
think the value of stand-alone benefits that is not within 
necessarily the medical offerings themselves could result in a 
high reimbursement rate and less out-of-pocket cost to the 
actual employees and their family members. I mean, I think 
that's part of the value of doing a study, is to take a look at 
what the reimbursement rate levels are today under some of the 
various plans and make a determination.
    Ms. Norton. Could you explain why--less cost to employee 
and higher reimbursement rate if it's a stand-alone plan?
    Mr. Seltenheim. Right.
    Ms. Norton. Would you have several plans all competing with 
each other?
    Mr. Seltenheim. And that's part of what helps to I think 
provide an opportunity. With the opportunity of choice 
employees can make a determination as to what benefit level are 
they seeking, what type of network do they want to have access 
to, and they can make a decision as to potentially what their 
out-of-pocket costs are. As of right now, where there are 
offerings it's in fact embedded within medical plans, although 
there are some supplemental programs available. I think it's a 
matter of offering employees greater choice, is what it boils 
down to.
    Ms. Norton. Thank you, Madam Chairwoman.
    Mrs. Davis of Virginia. Before I go to Mr. Van Hollen, I 
just want to say--I had a town hall meeting recently and talked 
about the long-term health care plan, and it is my 
understanding that it is strictly with one carrier, and there 
is no competition. A lot of the people don't feel that they 
have a real choice because there is no competition.
    Ms. Norton. For FEHBP?
    Mrs. Davis of Virginia. For long-term health care 
insurance.
    Ms. Norton. For our long-term health care? Well, maybe Ms. 
Block would want to tell us why they decided on that.
    Mrs. Davis of Virginia. That's another hearing, and we are 
going to ask those questions then. But I think that's the 
whole----
    Ms. Norton. We didn't just--we are not doing a monopoly 
here. There was a competition, but they competed and this is 
the guy who said he would give us the best price.
    Mrs. Davis of Virginia. Right. And there are a lot of 
complaints because they don't feel they have a choice now. And 
that's why I think that doing this where you have several 
different plans and several different carriers would give 
Federal employees better options. I don't know, but we can ask 
those questions at another hearing. I don't want to beat this 
horse to death.
    Mr. Seltenheim. Just another thought. It's not only a 
matter of cost and types of plan, but it's also a matter of 
access. Who has a large network in a particular area that would 
become attractive to an employee is something else to factor 
in.
    Mrs. Davis of Virginia. Thank you, Mr. Seltenheim.
    Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Madam Chairwoman.
    I have a question, Ms. Block, just in terms of the 
administration's position on this. I realize you don't yet have 
a position, we don't know exactly when you have will have a 
position. I don't know what the schedule is for moving forward 
with the markup, but I hope we will have the benefit of the 
administration's views before that time. I want to make a 
distinction here because I wasn't quite clear what you meant by 
saying the Attorney General has taken the position that you are 
not required to make recommendations based on a request from 
Congress. It's one thing to say you oppose the bill, it's 
another thing to take the position that if the bill passes, 
because of separation of powers issues you are still not going 
to respond because it requires recommendations. And so what I 
want to know is if you're suggesting that the administration is 
taking the position that even if this bill passes that you are 
not required to respond.
    Ms. Block. No. I don't want to be misunderstood. We would 
be required to respond. We would certainly do the study, and we 
would be pleased to provide options. We simply would not be 
able to give recommendations unless the administration chose to 
do so.
    Mr. Van Hollen. OK. So you would----
    Ms. Block. I don't mean in any sense that we would 
disregard the provisions of the bill.
    Mr. Van Hollen. So you would respond by providing options, 
but not say this is our preferred option. Is that it?
    Ms. Block. That's correct.
    Mr. Van Hollen. Thank you. Just with respect to the last 
paragraph of your testimony, you said that, ``OPM has been 
gathering information on dental and vision programs so that we 
can be aware of the practices of other employees and cognizant 
of industry trends. I also would be happy to offer information 
I have about how such programs are structurally administered by 
the industry for other purposes.''
    Could you give us, based on that review, your conclusions 
as to whether you see others in the industry providing greater 
benefits and still being able to contain costs in a way that 
could be a model? I understand you can't bless any model that 
could be a good model for us.
    Ms. Block. Well, that's exactly what we've started from a 
very preliminary perspective to look into. And at this point 
we're just asking questions. We have certainly not reached any 
conclusion. I have had the good fortune of meeting with some of 
the members of the panel, for example, and the organizations 
that they represent. But it has been strictly in terms of 
trying to understand how the industry functions and what the 
industry offers other employers in terms of structures, plan 
type, and so on. So we're at the very preliminary stages of 
trying to collect that kind of information, since up until now 
we have not offered or thought about a discrete benefit for 
dental or vision. This is very preliminary-stage information 
gathering for us.
    Mr. Van Hollen. OK. Now, I'm not sure I understand exactly 
how the FEHBP works in this respect. As I understand it, we put 
a freeze on an expansion of dental benefits under FEHBP; is 
that right?
    Ms. Block. Well, what we have done in terms of the 
expansion of any benefit, we have had a tradeoff policy for the 
expansion of any benefit in the FEHB Program for a number of 
years. And that's for cost containment purposes. So any time a 
carrier proposes to increase benefits or add benefits in one 
area, we look for a tradeoff that will cover the cost of 
expanding that benefit from some other area.
    Mr. Van Hollen. Sure. OK. So if a carrier is providing a 
plan under FEHBP right now, and they came to you and said, we 
want to expand dental benefits in this way and we're going to 
reduce other benefits in that way, they could do that now.
    Ms. Block. Well, we would prefer that they wouldn't. And we 
have asked carriers not to do that for a number of years 
because we have made the determination that, as valuable as we 
believe dental and vision benefits to be--and I don't want to 
at all give the impression that we don't understand the 
importance of those benefits, indeed we do, as we understand 
the importance of other benefits that our employees have 
expressed an interest in--we have simply made the determination 
that things like hospital care, physician care, maternity 
care----
    Mr. Van Hollen. If I might ask you----
    Ms. Block [continuing]. Are our priorities and those are 
the things that we need to prioritize.
    Mr. Van Hollen. Yes, I understand that. And that may well 
be my choice. And I don't know how FEHBP works completely, but 
my understanding--let's say a carrier was given that choice, 
and they did increase dental benefits and they reduced benefits 
somewhere else; isn't the ultimate choice left to the consumer?
    Wouldn't that mean that they had--why would they do that if 
they didn't think more people were going to sign up? And if 
they did think more people were going to sign up, why don't you 
let them take the risk in making that determination rather than 
deciding for them?
    Ms. Block. There are other considerations that have to be 
weighed, considerations that have to do with anti-selection, 
for example. If one carrier offers a benefit that is typically 
used by otherwise low-utilizing members and drops a benefit 
that is typically very expensive, therefore discouraging 
enrollment in that plan by high-utilizing members, you get into 
a very dangerous anti-selection situation. And that's another 
part of the equation that we have to consider.
    Mr. Van Hollen. Thank you. Thank you very much.
    Thank you, Madam Chairwoman.
    Mrs. Davis of Virginia. Thank you, Mr. Van Hollen.
    I enjoyed hearing the exchange on that and I guess I'm not 
real sure what you just explained, because I sort of liked what 
Mr. Van Hollen said, because when I came on board and saw the 
brochure on all these different plans, I mean, there were a 
gazillion choices. So why not, if we had a carrier that wanted 
to offer more dental, why not give the employee that choice?
    The other thing that I thought was--my legal counsel was 
trying to explain it to me--in your responses several times, 
you said you have done it to keep the cost down. Boy, do I hear 
from my constituents how they get a little bit of a raise and 
their cost goes up 47, 48 percent on their health insurance. So 
I'm not sure I follow that line item. Maybe you can explain it 
to me later.
    I want to thank all the witnesses for coming. We probably 
will have some questions for you for the record if we can 
submit them to you in writing and have you respond. And we will 
make sure that our members all have that same opportunity.
    I'd like to again thank all of you for coming. I do think 
this is a very important issue and one that we hear about a lot 
from our Federal workers. Dental and vision plans are very 
important to them. So I'm certainly hoping that if we can get 
this bill passed, that we can get a study from OPM and maybe do 
something to help our employees from here on out. But thank you 
all very much for coming.
    With that, the hearing is adjourned.
    [Whereupon, at 4:15 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
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