[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Extensions of Remarks]
[Page 2511]
[From the U.S. Government Publishing Office, www.gpo.gov]



FEDERAL EMPLOYEE HEALTH BENEFITS FOR MILITARY RETIREES: LET'S CARRY OUT 
                        A CREDIBLE DEMONSTRATION

                                 ______
                                 

                     HON. RANDY ``DUKE'' CUNNINGHAM

                             of california

                    in the house of representatives

                      Wednesday, February 28, 2001

  Mr. CUNNINGHAM. Mr. Speaker, today I am reintroducing legislation 
that will address deficiencies in the ongoing demonstration project to 
assess the viability of a Federal Employees Health Benefit Program 
(FEHBP) option for military retirees. Since Congress authorized that 
demonstration in the FY99 Defense Authorization, I have raised concerns 
that the limits on it would prevent us from gaining adequate data on 
which to judge this option. Unfortunately, those concerns have been 
validated over the past years, and I am resubmitting corrective 
legislation to put us back on the right track.
  While many in Congress have been pushing for an FEHBP option for 
military retirees for years, that effort has been stymied because some 
believe that it would be too costly. That is because budget analysts 
made some illogical assumptions in projecting the cost of FEHBP for 
military retirees. For example, the budgeteers incorrectly calculated 
that all eligible military retirees would select this option. But that 
is not logical. Some people may be satisfied with their access to care 
under Tricare, or opt out based on cost calculations. Moreover, budget 
analysts did not account for the savings that would accrue in other 
health programs for those who participate in FEHBP.
  Given these unrealistic assumptions, I joined other FEHBP supporters 
in pushing a demonstration so that we could validate the true cost and 
viability of this option. Unfortunately, even the demonstration was 
scaled back, creating a ``Catch 22'' situation.
  Congress authorized a three-year demonstration limited to 66,000 
participants at up to ten sites. Because the number of eligibles that 
could be offered this option was capped at 69,663, it has been almost 
impossible to attract a credible pool of participants on which to judge 
the viability and cost. To achieve anything close to our intent, we 
would have to have one hundred percent participation--something no one 
but the budget analysts ever assumed possible. Set up for failure, this 
effort could provide opponents the perfect fodder to kill the FEHBP 
option.
  DOD never began any real marketing of the option to potential 
beneficiaries until August 1999--two months before the pilot was to 
begin. And the effort that was made was completely inadequate. 
Notification consisted of a postcard mailer without any detailed 
information so that eligible participants could compare costs to their 
current arrangements. People who have Medicare Part B coverage were not 
informed that under some plans, they wouldn't have to make copayments 
or meet deductibles. The Department was slow to announce health fairs 
conducted by FEHBP insurers, leaving less than a week in most cases for 
potential participants to plan.
  The artificial limits, combined with inadequate marketing of FEHBP to 
military retiree, led to unusually low participation. At the end of 
1999, less than one thousand people in eight sites nationwide have 
signed up for the FEHBP option. Fortunately, a renewed marketing effort 
and extension for signup last year increased participation to 7200. But 
almost two years were lost in getting this demonstration off the 
ground, and it is set to expire at the end of 2002. Meanwhile, DOD 
still must spend money to market to this small group of eligible 
participants.
  Those who participate in the FEHBP program are also prohibited from 
getting any further care in a military treatment facility. MTFs such as 
Walter Reed Army Medical Center need the older patients to keep up 
their full range of medical skills and they have the space to 
accommodate retirees. We should allow MTFs to bill health care plans 
for services--as we are now starting to do with Medicare Subvention.
  My bill would address these limitations by:
  Removing the limits on the number of people and areas of the country 
in which the demonstration may be carried out.
  Removing the restriction, which prevents participants from using 
military treatment facilities (MTFs), and allows MTFs to charge the 
FEHBP plans for retiree services. That balances cost considerations, 
and ensures a steady mix of older patients so that the military medical 
personnel are able to keep up their full range of skills.
  Extending the current demonstration two years so that we have the 
benefit of solid data and a credible program on which to judge the 
viability of the FEHBP option.
  Mr. Speaker, these fixes are no substitute for comprehensive military 
retiree health care reform. In my view, the time for demonstrations and 
patchwork fixes to the DOD health care system is over. Congress took a 
major step in that direction last year by authorizing the ``Tricare for 
Life'' benefits. But we need comprehensive action to ensure a menu of 
affordable heath care options for military retirees. I am confident 
that an honest assessment will confirm the viability of an FEHBP option 
for all military retirees.
  We cannot continue to punt on that because of budget concerns. We 
provide FEHBP to millions of civilian federal employees throughout 
their careers and in retirement. Military personnel and their families 
make many sacrifices throughout their careers. The least we can do is 
provide them with the same level of care that other federal workers 
have. They deserve no less.

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