NEAR ELDERLY: FEHBP Plan Picks Up Steam
"[T]he first serious alternative approach" to President Clinton's proposal to allow the near-elderly to buy into Medicare "is getting some notice," National Journal reports. The proposal would "let people age 62-65 buy into the Federal Employee Health Benefits Program (FEHPB) instead of Medicare." The proposal has been endorsed by Sen. John Breaux (D-LA), chair of the Medicare reform commission. Breaux said, "I asked the president to look at the [proposal]. I am sending it to all the (Medicare) commission members, to congressional leaders and Members of Congress." Supporters of the FEHPB plan said it "would be a better choice than Medicare for covering early retirees," because the program "has created competition between private health plans instead of relying on the 'bureaucratic price controls' of Medicare." According to David Kendall, the Progressive Policy Institute senior analyst who developed the proposal, FEHBP "offers a greater variety of health plans" and more "comprehensive benefits" than Medicare. In addition, Kendall argues, the FEHBP plan is one that Republicans can sign on to because it features a "competitive system that restrains the public costs of subsidizing health care coverage." Kendall said the number of near-elderly who choose to buy into either program would likely be the same and while up-front costs would be similar, but "FEHBP would be preferable because prices would rise and fall based on the market, while Medicare's prices are harder to adjust" (Serafini, 3/14 issue).
The COBRA Answer?
Today's San Francisco Chronicle reports that "nobody is willing to predict anything of substance will pass in time to help those approaching retirement age now." Even if Clinton's near-elderly plan is approved, full access to affordable health care will be a "far cry" away for those "under the traditional retirement age." The Chronicle reports that "[e]arly details" on the Clinton plan "envision strict eligibility limits for those between the ages of 55 to 61." Only those persons who "have lost employer-based health coverage because [they] had been fired or laid off" would be eligible. Employee Benefit Research Institute's Paul Fronstin said, "Not very many people could meet those standards." COBRA, the federal program extending employer health insurance coverage for up to 18 months after a person leaves a job, could be the "best option" for the near elderly, the Chronicle reports. Although COBRA coverage usually costs several hundred dollars a month, it is still "far less than what private insurance would cost in the individual market" (Hall, 3/16).