Psychiatric Services has published a study examining the impact of the 2001 implementation of substance abuse parity in the Federal Employee Health Benefit Program (FEHBP). Examining health plan spending and treatment utilization, the study reviewed data from six FEHBP health plans between 1999 and 2002. Comparing FEHBP plans with similar plans not offering substance abuse treatment at parity, the authors found that parity did not significantly impact substance abuse treatment utilization. However, the study found that individuals receiving substance abuse treatment in plans with parity incurred an average of $101.09 less in out-of-pocket expenses than did similar individuals in non-parity plans. The authors conclude that parity successfully lowered individuals’ costs without increasing plan costs.

Azzone, V., et. al. (2011). Effect of insurance parity on substance abuse treatment. Psychiatric Services,  62:129-134. doi: 10.1176/appi.ps.62.2.129. http://psychservices.psychiatryonline.org/cgi/content/abstract/62/2/129 

Authors: Azzone, V., Frank, R., Normand, S. T., and Burnam, A.

A report by the Hay Group, outlining the results from its annual Health Benefits Prevalence Report, estimates that employer-sponsored health care premiums will increase an average of 9 percent in 2010 excluding the effects of changes to plan design, medical management, or plan administration.  The projections are based on 30 years of trends in employer-sponsored coverage and data from the Federal Employee Health Benefits Program (FEHBP), which Hay says is a leading indicator for other employer-sponsored plans.  The report notes that though the annual premium increase in 2009 was the lowest since 2000, FEHBP data indicates the decline may have bottomed out.

Full Report:  Trends in Health Premiums: From the Hay Benefits Prevalence Report and the FEHB Program (PDF | 319.15 KB)

The Hay Group. (2010). Trends in health premiums: from the Hay Benefits Prevalence Report and the Federal Employees Health Benefits Program 1981 through 2010.

This report from the Kaiser Family Foundation examines the health care needs and costs of children, profiling two particular children. 

From the report:

As health reform discussions continue, one key topic that will need to be addressed is what will be included in the coverage provided and how well it will meet individuals’ health care needs.  Because they are growing and developing, children have a distinct set of health care needs that evolve over time and differ from those of adults. Moreover, while as a group children are relatively healthy, one in seven has special health care needs.  Given that under reform, many children will be covered through private plans and some children who are currently covered through public programs may be shifted to private plans, it is particularly important to consider how well private plans might meet children’s health care needs. A key question for children is what coverage standards will be applied to these private plans under reform.

To examine how well a generous private plan today addresses the varying health needs of  children, this brief analyzes the specific health care needs of two children, including:

• Jacob, a 7-year-old boy who is in generally good health but suffers from the relatively common ailments of asthma and allergies; and
• Isabel, a 13-year-old girl who was born prematurely and has cerebral palsy and requires a broad range of acute and long-term services and supports that enable her to function and learn at school.

Profiles of the health care utilization of these children during the last year were developed through interviews with their parents. Their actual utilization was then compared to the benefit coverage and cost-sharing requirements of the Blue Cross Blue Shield Standard Option (BCBSSO) plan to determine which of their services would be covered and what their families would pay both in cost-sharing and for non-covered services. The BCBSSO is the most popular coverage option offered through the Federal Employees Health Benefits Program (FEHBP) and is similar in many respects to coverage offered by other large employers. Overall, it is generous in terms of the benefits covered, but it charges relatively significant cost-sharing. The analysis also considers what coverage these children would receive and the costs their families would pay under Medicaid’s EPSDT benefit package, which is specifically designed for children with low incomes and/or high health needs. 

Full report: Children and Health Care Reform (PDF | 1 MB)

Kaiser Family Foundation. (2009). Children and health care reform: assuring coverage that meets their health care needs. Alker, J., Pollitz, K., Wachino, V., Libster, J., and Paradise, J. 

This report discusses the possibility of applying key components of the Federal Employees Health Benefits Program (FEHBP) to national health care reform legislation to increase quality and coverage of care at the federal level.

From the report:

The Federal Employees Health Benefits Program (FEHBP), the nation’s largest employer-sponsored health plan, offering enrollees numerous options for health insurance. Over its 50-year history, the program has kept participation high, administrative costs low and premiums affordable—making it an enticing model for health reformers of all political stripes. Conservatives like its reliance on private plans and market competition. Liberals like the prospect of expanding to everyone the FEHBP’s large-employer-style benefits, community rating, and close oversight of insurer pricing.

The FEHBP model is so popular that most federal reform proposals include versions of a similar insurance "exchange" as a way to offer a range of private-market insurance choices to a broader population. A new paper from the Urban Institute shows that while opening the FEHBP to non-federal employees or replicating its features nationally is not feasible, lessons can be drawn from the program that enhance and inform federal reform efforts.

The paper offers three main observations for reformers, drawn from experience with FEHBP:

1. Because people outside of large employer groups are quite diverse in health status and income, they and their health risks are likely to be unevenly distributed across health plans. Strong countermeasures to make sure plans are not disproportionately saddled with the costliest clients will need to be identified.
2. It can be challenging to maintain a wide range of benefit packages for enrollees to choose among, and actions could be taken in this regard.
3. FEHBP’s model of relating to health plans through negotiation is an alternative to conventional contracting, and is worth considering.

Full Report: Lessons for Health Reform from the Federal Employees Health Benefits Program (PDF | 92.63 KB)

Robert Wood Johnson Foundation & The Urban Institute. (2009). Lessons for health reform from the Federal Employees Health Benefits Program: how aspects of the nation's largest employer-sponsored health plan could serve as a model for reform. Bovbjerg, R. R.

On June 24, the Government Accountability Office (GAO) released a report examining prescription drug cost-control mechanisms in Medicare Part D, Medicaid, the Veterans Health Administration, the Department of Defense (DoD), and the FEHBP.

From the report:

Government Accountability Office (GAO). (2009). Prescription Drugs: Overview of approaches to control prescription drug spending in federal programs.

This Office of the Assistant Secretary for Planning and Evaluation (ASPE) report examines the impact of implementing parity within the Federal Employees Health Benefits (FEHB) Program.

From the report:

Historically, the FEHB Program has worked toward improved MH/SA benefits. For example, President Kennedy asked the Civil Service Commission (OPM’s predecessor agency) to modify the FEHB Program to treat mental illnesses in the same manner as general medical illnesses (Hustead et al., 1985). In response, from 1967 to 1975, the FEHB Program’s two nationwide health insurance plans offered parity benefits. Beginning in 1975, however, when more flexibility in benefit design was permitted, MH/SA coverage began to erode, with diminution of benefits continuing into the early 1980s. From 1980 to 1997, the share of total claims accounted for by MH/SA claims declined from 7.8% to 1.9% (Foote and Jones, 1999). This trend reflects MH/SA coverage in the larger health care market. It should be noted, however, that other health care costs (e.g., prescription medications) escalated during this time period.

In its annual “call letter” to carriers each spring, OPM issues benefits policy guidance on negotiations for the next contract year. The “call letter” issued by the OPM in 2000 stated that beginning in January 2001, an MH/SA parity policy would go into effect. The aim of the parity policy would be to provide insurance coverage for MH/SA services the same as that for general medical care with respect to benefit design features, such as deductibles, copayments, and limits on visits and inpatient days.

Full report: http://aspe.hhs.gov/daltcp/reports/parity.htm

US Department of Health and Human Services. Office of the Assistant Secretary for Planning and Evaluation. (2004). Evaluation of parity in the federal employees health benefits (FEHB) program: final report.