The Office of Personnel Management finalized a decision to allow FEHB carriers to offer the same number and type of insurance plan options so that participants have a few more choices. Previously, OPM set minimum standards that allowed certain plans to offer 2 options and one high deductible health plan, while other carriers could offer 3 options of any kind or 2 options and a high deductible plan. With this final rule, all FEHB carriers will offer the same number and type of plans, bringing a few more options to participants.
While participants likely won’t see a huge difference in their options, OPM projected the new regulations would create 2 more plan options. Currently, FEHBP contracts with 83 plan carriers offering about 262 plan options.
“OPM expects that this regulatory change allowing an increase in the number of plan options will have a positive effect on the market dynamics in the FEHB program by potentially increasing competition between health plans,” OPM wrote. “This regulatory change will allow health plans…to offer a greater variety of lower cost and higher quality options to better serve FEHB program enrollee interests. OPM will ensure that any new options are distinct and meet enrollee interests and that enrollees have access to adequate information to understand the available options.”
OPM believes that more insurance plans will boost competition among carriers in FEHBP and that will lower health care costs. OPM has asked for authority to add more plans to FEHBP. The agency received some comments from individuals and FEHB carriers on the change and some expressed concern it would create more competition.
“OPM considers a competitive environment as one in which all carriers conduct business under the same set of rules, meaning no carrier has the advantage of offering products that another carrier cannot,” the agency wrote in the final rule. “While plan benefits vary, OPM wants all carriers to be able to offer the same number and types of plan options.”
The Government Accountability Office is unsure whether this authority would change the health insurance plan for the better. About 5-7% of participants change insurance plans in a given year. GAO is uncertain participants would seek a change and take advantage of them.