Members of Congress and representatives of federal employee organizations are trying to get out from under the “patients’ bill of rights” legislation.
While the Senate agreed by voice vote to include government health programs, including Medicare and the Federal Employees Health Benefits Program (FEHBP), under the terms of the Senate version of the patients’ bill of rights, the House versions do not include any such provision.
Federal employee union representatives have stated their opposition to the proposal, arguing it would have a negative effect on the federal employees health insurance program, increasing costs for federal workers and their families. Federal employee plan representatives also fear the impact of lawsuits and the erosion of federal standards for federal employee plans.
Curiously, these complaints about the patients’ bill of rights echo similar sentiments expressed by private employers. Federal employee representatives are right to be concerned. Both the House and Senate versions will add a significant layer of regulation over federal employees’ plans, thereby driving up health care costs.
Private plans in the FEHBP operate in an atmosphere of comparative freedom from the kind of regulation that accompanies traditional Medicare, the beleaguered Medicare+Choice program, Medicaid, and other government health care programs.
Moreover, as Senator Edward M. Kennedy (D- Massachusetts) has pointed out, unlike millions of other Americans, federal employees and their families enjoy a broad choice of plans and can choose the package of benefits they think best for them. As Kennedy has also observed, federal workers and their families do not need the appeals processes embodied in these bills. Federal workers and retirees register a high degree of satisfaction with their private plan coverage. The number of lawsuits over claims in the FEHBP is infinitesimal.
Congress Misses the Point
Both Kennedy’s commentary and the reality of choice and competition in the FEHBP highlight the essential reason why congressional debate on the patients’ bill of rights is missing the point. Patients do not need lawyers when they can fire poorly performing plans, or reject plans that do not give them the benefits they want or need.
Consumer choice is a powerful instrument of patient protection. The best policy is to extend the principle of choice and competition to the health care system, and allow Americans to choose for themselves the plans they want. In such a system, lawyers would be largely superfluous.
If members of Congress want to exclude their own plans, and the plans covering congressional staff and federal workers and retirees, from the patients’ bill of rights proposal, and if they were to do so on the crucial point of personal choice, that would be legitimate. Of course to be fair, they should also exclude from the bill of rights’ provisions private employers who offer a range of health plan choices to their employees. Anything less would be inequitable.
They Just Don’t Get it
During the June 29 Senate debate on the Nickles amendment, Kennedy offered a crucial and largely neglected comment: “It is interesting, as we get into the federal employees, we have 34, 35 different choices. What other worker in America has that kind of choice? The people say, what about your appeal? Generally speaking, you do not need an appeal: You can just go to another health care policy. We have that choice, but working Americans do not. They are stuck with the choices in the workforce.”
Kennedy is, of course, exactly right. In a normal, consumer-driven market in which individuals and families can pick and choose their own plans and benefits, and in which poorly performing health insurance plans can be fired by consumers, one’s need for an appeal system or a complicated regulatory regime is dramatically reduced; nor does one have to hire a lawyer.
The FEHBP is not, of course, a perfect market; nor is it completely free from counterproductive rules restricting either consumer choice or free-market competition. But it is the closest thing in reality to a normally functioning, consumer-driven health insurance market. Moreover, the positive experience of the FEHBP proves that a resort to lawyers is a last resort in a rational system. According to a Washington Post report, Office of Personnel Management officials know of just eight lawsuits in federal court filed by federal employees over disputed claims. The FEHBP covers 9 million persons.
If Congress were genuinely concerned about patients’ rights, it would change the laws and rules that govern the health insurance market. It would give individuals and families the right to make the choices that are best for them, and force health insurance companies to compete in an open market for consumers’ dollars. Congress would, in other words, set to work fixing a broken and distorted health insurance market that frustrates both consumer choice and competition.
Senator Kennedy’s simple observation as to why federal employees are both empowered to act and satisfied with their choices, while other Americans are restricted in their options, is perhaps the best illustration yet why conventional congressional health policy in the House and Senate alike simply misses the point.
Robert E. Moffit, Ph.D. is director of domestic policy studies at The Heritage Foundation. This essay is based on Moffit’s “Why Federal Unions and Members of Congress Want to Escape the Patients’ Bill of Rights,” issued by The Heritage Foundation on July 23, 2001.
For more information . . .
The full text of Moffit’s report is available on the Heritage Foundation Web site at http://www.heritage.org/shorts/20010723pbor.html.