<DOC>
[108th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:95156.wais]
WE'D LIKE TO SEE YOU SMILE: THE NEED FOR DENTAL AND VISION BENEFITS FOR
FEDERAL EMPLOYEES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CIVIL SERVICE
AND AGENCY ORGANIZATION
of the
COMMITTEE ON GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
ON
H.R. 3751
TO REQUIRE THAT THE OFFICE OF PERSONNEL MANAGEMENT STUDY AND PRESENT
OPTIONS UNDER WHICH DENTAL AND VISION BENEFITS COULD BE MADE AVAILABLE
TO FEDERAL EMPLOYEES AND RETIREES AND OTHER APPROPRIATE CLASSES OF
INDIVIDUALS
__________
FEBRUARY 24, 2004
__________
Serial No. 108-173
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
CHRIS CANNON, Utah DIANE E. WATSON, California
ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia C.A. ``DUTCH'' RUPPERSBERGER,
CANDICE S. MILLER, Michigan Maryland
TIM MURPHY, Pennsylvania ELEANOR HOLMES NORTON, District of
MICHAEL R. TURNER, Ohio Columbia
JOHN R. CARTER, Texas JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee ------ ------
------ ------ ------
------ ------ BERNARD SANDERS, Vermont
(Independent)
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director/Communications Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on Civil Service and Agency Organization
JO ANN DAVIS, Virginia, Chairwoman
TIM MURPHY, Pennsylvania DANNY K. DAVIS, Illinois
JOHN L. MICA, Florida MAJOR R. OWENS, New York
MARK E. SOUDER, Indiana CHRIS VAN HOLLEN, Maryland
ADAH H. PUTNAM, Florida ELEANOR HOLMES NORTON, District of
NATHAN DEAL, Georgia Columbia
MARSHA BLACKBURN, Tennessee JIM COOPER, Tennessee
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Ron Martinson, Staff Director
Chris Barkley, Professional Staff Member
Reid Voss, Clerk
Tania Shand, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on February 24, 2004................................ 1
Text of H.R. 3751................................................ 4
Statement of:
Block, Abby, Deputy Associate Director, Office of Personnel
Management; Ed Wristen, president and CEO, First Health;
Dr. Stan Shapiro, vice chairman, CompBenefits; Jon
Seltenheim, chairman, National Association of Dental Plans;
and Howard J. Braverman, O.D., past president, American
Optometric Association..................................... 11
Letters, statements, etc., submitted for the record by:
Block, Abby, Deputy Associate Director, Office of Personnel
Management, prepared statement of.......................... 13
Braverman, Howard J., O.D., past president, American
Optometric Association, prepared statement of.............. 74
Davis, Chairman Tom, a Representative in Congress from the
State of Virginia, prepared statement of................... 70
Davis, Hon. Danny K., a Representative in Congress from the
State of Illinois, prepared statement of................... 8
Davis, Hon. Jo Ann, a Representative in Congress from the
State of Virginia, prepared statement of................... 3
Seltenheim, Jon, chairman, National Association of Dental
Plans, prepared statement of............................... 51
Shapiro, Dr. Stan, vice chairman, CompBenefits, prepared
statement of............................................... 32
Wristen, Ed, president and CEO, First Health, prepared
statement of............................................... 18
WE'D LIKE TO SEE YOU SMILE: THE NEED FOR DENTAL AND VISION BENEFITS FOR
FEDERAL EMPLOYEES
----------
TUESDAY, FEBRUARY 24, 2004
House of Representatives,
Subcommittee on Civil Service and Agency
Organization,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 3:11 p.m., in
room 2247, Rayburn House Office Building, Hon. Jo Ann Davis
(chairwoman of the subcommittee) presiding.
Present: Representatives Davis of Virginia, Blackburn,
Chairman Tom Davis (ex officio), Davis of Illinois, Norton, and
Van Hollen.
Staff present: Ron Martinson, staff director; Chad Bungard,
deputy staff director; Rob White, communications director;
Chris Barkley, professional staff member; Reid Voss, clerk;
John Landers, detailee; Tania Shand, minority professional
staff member; and Teresa Coufal, minority assistant clerk.
Mrs. Davis of Virginia. A quorum being present, the
Subcommittee on Civil Service and Agency Organization will come
to order.
I want to thank you all for joining us today as we take a
look at how we can make available better dental and vision
benefits for members of the Federal family. I know this issue
is of great importance to Federal employees, retirees, and
their families. These two benefits are consistently at the top
of their wish list.
Earlier this year I introduced H.R. 3751, which requires
the Office of Personnel Management to study the options for
enhancing Federal dental and vision benefits, and to issue a
recommendation to Congress by June 30th of this year. I felt it
was time for OPM to reevaluate its dental and eye care
offerings to the Federal Employees Health Benefits Program.
For reasons that I expect OPM to explain in detail here
today, the dental and vision benefits offered through the FEHBP
have essentially remained unchanged for about 15 years. A lot
has changed in that time. Primarily we have learned a great
deal more about the importance of dental and vision care to our
overall health. I think it is a black mark against the Federal
Government that its current dental and vision offerings are so
meager.
We have held several hearings in this subcommittee and
endorsed several pieces of legislation to assist the Federal
Government in attracting and retaining talented workers.
Employee benefits are another piece in this puzzle, because the
Federal Government is lagging behind its competitors. Just look
at dental benefits. Nearly every midsized and large private
sector firm offers fairly generous dental care. Federal
employees understand this disparity.
My hope is that this hearing and my introduction of H.R.
3751 can be the start of a collaborative process by which the
House, the Senate, the administration, and industry
representatives can determine the best way to enhance both
dental and vision benefits while maintaining the overall
strength of the FEHBP.
I want to thank you all for being here today.
And I would like to recognize my ranking member, Mr. Davis,
to see if he has an opening statement.
[The prepared statement of Hon. Jo Ann Davis and the text
of H.R. 3751 follow:]
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Mr. Davis of Illinois. Thank you very much, Madam
Chairwoman, and let me thank the witnesses for coming.
Visual health and oral health are integral to general
health. Eye and oral diseases are progressive and becoming more
complex over time. Our ability to eat, see, read, learn, and
communicate all depends on good visual and oral health.
Periodic eye and dental examinations are an important part
of routine preventative health care. Many visual and oral
conditions present no obvious symptoms; therefore, individuals
are often unaware that problems exist.
There are safe and effective measures to prevent the most
common eye and dental diseases. That is why early diagnosis and
treatment are important for maintaining good visual and oral
health and why a vision and dental benefit should be made
available to Federal employees and annuitants.
We know that in 1987 the Office of Personnel Management
stopped plans in the Federal health benefits program from
adding new vision and dental packages. OPM did so for various
reasons. However, that decision was made more than 15 years
ago, and it is now time to take a fresh look at how we can meet
the visual and oral health needs of Federal employees.
Let's not be shortsighted. In the long run, preventive care
through periodic examinations and doctor visits will help keep
down long-term vision and dental costs due to early detection.
I have worked in the health area for many years and prior
to running for public office actually served as president of
the National Association of Community Health Centers, and
health was something that I paid a great deal of time on and
attention to, and I often wondered why we didn't put as much
emphasis on prevention and early detection even as we talked
about cost containment and lowering the costs of health care. I
think that we can be most effective in improving health status
when we make sure that each and every individual has optimal
opportunity to prevent themselves from getting ill to the point
where they have to be institutionalized, hospitalized, or have
expensive doctor visits and perhaps even surgery.
So, Madam Chairwoman, I thank you for holding this hearing,
and look forward to some very positive results.
[The prepared statement of Hon. Danny K. Davis follows:]
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Mrs. Davis of Virginia. Thank you, Mr. Davis.
I would now like to recognize Ms. Holmes Norton for an
opening statement.
Ms. Norton. Thank you very much, Madam Chairwoman, and I
very much appreciate your interest in augmenting the FEHBP and
your bill, as well as your study.
Even without vision and oral care, the FEHBP is behind the
great Fortune 500 companies and has been for some time. So the
fact that we are trying to catch up is nothing to congratulate
ourselves about, but I am very pleased to see leadership of the
Chair in focusing on yet another shortcoming. The problem I
have is of course that when you already have a benefit plan
where the employer does not pay what it would pay if it were a
Fortune 500 company--and the last time I looked, there isn't a
Fortune 500 company as big as the government of the United
States--then of course to go forward and add to that raises yet
another question, and that is who is going to pay for it. I
think that employees should wonder whether we are going to get
the kind of benefit that they got with long-term care: 100
percent paid for by the employee. In that case, the employer
becomes a vessel.
Thank you very much, and it's good to have those who can
afford it get it, but I would hate to see the idea of cost
sharing gradually disappear from the FEHBP.
Now, you could argue that with long-term care it's so
expensive that's why the Federal Government couldn't possibly
do it. Well, it could have done something. It could have done a
little bit of it. But it did none of it. So my question, at a
time when people all over the United States are striking, not
for wages but for loss of health care, my question is, is the
employer ready to pick up his share along with the employee?
Because, if not, I'm not sure how the employees will look at
this.
Employees who can already afford it perhaps already pay for
their dental care or for their oral care, so the employees I'm
most concerned about are employees in the lower grades for whom
some subsidy here could have some real meaning. And we have to
recognize that employers who pick up part or all of the cost of
health care in fact are calculating that in their wages. So in
fact it's not ever free to the employee. But if the employee
only becomes a vessel, then I'm not sure what role the employer
is playing except to provide a group umbrella. And I suppose we
should all be grateful for small favors. There are a lot of
those group umbrellas that people can join right now. You can
go out and join other kinds of groups outside of your employer
today because they are forming as a result of the cost of
health care.
I am very concerned about the rising cost of FEHBP. I am
not among those who hold FEHBP up the way it is always held up
in all Presidential campaigns. They say look at this FEHBP. I
know that Federal employees must say what are they talking
about? If our costs are going up 10 percent a year or 12
percent a year or 15 percent a year, what is happening out
there in the rest of the marketplace?
So I am concerned about how we would pay for this. And,
frankly, I have a hard time with this if in fact there was not
cost sharing here, because I believe it would be the beginning
of the end of cost sharing.
I would love to know what the figures are in the public
sector. In the private sector there are many millions of people
who are dropping their own health care or dropping family
members or having employers drop health care or offload more of
it onto employees because of the rising cost of health care. So
if this is an add-on to today's health care cost for the
employee, then I think the committee would want to look more
closely at what we are doing for the employees, and I think
that Uncle Sam ought to be willing to step up to the plate the
way far smaller employers than our government does.
Thank you very much, Madam Chairwoman.
Mrs. Davis of Virginia. Thank you, Ms. Norton. That's why
we've asked OPM to do a study on it and to give us some
recommendations, because if we do anything we want to make sure
we do what's right for the employees.
And I would just testify from my own personal experience. I
don't take FEHBP. I opted not to when I was elected because my
husband's insurance through the city where he worked, where he
retired from was actually better. But from a personal
standpoint, I just spent $13,000 out of my own pocket for
dental because we don't have dental. So if there is some way
that we can help the Federal employees, we want to do that.
Ms. Norton. Now we see an additional motivation, Madam
Chairwoman.
Mrs. Davis of Virginia. Actually, that was after the fact.
But it has become an additional motivation.
Mr. Van Hollen, welcome. Do you have an opening statement?
Mr. Van Hollen. No, thank you, Madam Chairwoman. Just I
appreciate the fact that you are holding this hearing and
looking into this issue. So thank you.
Mrs. Davis of Virginia. Thank you.
I ask unanimous consent that all Members have 5 legislative
days to submit written statements and questions for the hearing
record, and that any answers to written questions provided by
the witnesses also be included in the record. And, without
objection, it is so ordered.
I ask unanimous consent that all exhibits, documents, and
other materials referred to by Members and the witnesses may be
included in the hearing record and that all Members be
permitted to revise and extend their remarks. Without
objection, it is so ordered.
I also ask unanimous consent that statements from Delta
Dental of California and the National Association of Retired
Employees may be included in the hearing record. And, without
objection, it is so ordered.
I would like to welcome our panel today, and to thank you
all for coming and for being patient with us.
With us today we have Ms. Abby Block, the Deputy Associate
Director of Office of Personnel Management. After Ms. Block, we
will hear from Mr. Ed Wristen, the president and CEO of First
Health. Then we are going to be hearing from Dr. Stan Shapiro.
Dr. Shapiro is the vice chairman of CompBenefits. And then
after Dr. Shapiro we will hear testimony from Mr. John
Seltenheim, the chairman of the National Association of Dental
Plans. And, last but not least, will be Dr. Howard J.
Braverman, the past president of the American Optometric
Association.
It's standard practice for this committee to administer the
oath to all witnesses; and if all witnesses could please stand,
I will administer the oath. If you would stand, please, and
raise your right hands.
[Witnesses sworn.]
Mrs. Davis of Virginia. Let the record reflect that the
witnesses have answered in the affirmative, and you may be
seated.
The panel will now be recognized for an opening statement,
and we ask that you summarize your testimony in 5 minutes, and
that any further statement you may wish to make will be
included in the record.
I would again like to first welcome Ms. Abby Block, and I
thank you for being with us today, Ms. Block. You are now
recognized for 5 minutes.
STATEMENTS OF ABBY BLOCK, DEPUTY ASSOCIATE DIRECTOR, OFFICE OF
PERSONNEL MANAGEMENT; ED WRISTEN, PRESIDENT AND CEO, FIRST
HEALTH; DR. STAN SHAPIRO, VICE CHAIRMAN, COMPBENEFITS; JON
SELTENHEIM, CHAIRMAN, NATIONAL ASSOCIATION OF DENTAL PLANS; AND
HOWARD J. BRAVERMAN, O.D., PAST PRESIDENT, AMERICAN OPTOMETRIC
ASSOCIATION
Ms. Block. Thank you, Madam Chairwoman, and members of the
subcommittee. I am pleased to appear before you today on behalf
of Director Kay Coles James to discuss the views of the Office
of Personnel Management on dental and vision benefits under the
Federal Employees Health Benefits Program.
Director James has always expressed a willingness to review
the policies and programs affecting the pay and benefits of
Federal employees in order to ensure their effectiveness for
employees, the Government, and the taxpayer. As you know, this
year for the first time we made flexible spending accounts
available to Federal employees. Pretax dollars deposited into
those accounts can be used to cover the cost of deductibles and
co-payments and other health care costs that are not covered by
FEHBP plans, and also to pay eligible dependent care costs.
Director James is firmly committed to the ongoing review of all
the benefits offered under the FEHB Program.
Of course, given the ever increasing cost of providing
health benefits coverage throughout the Nation, we must be
mindful of the effects of any changes on the cost of coverage
for Federal employees, retirees, and their families. Under the
leadership of Director James, and through a combination of
tough negotiating and careful scrutiny, we have managed to
restrain the cost increases for our program in recent years
below the level for the economy generally. We would not want to
do anything that would not reflect the same level of due
diligence and careful concern.
With regard to your bill, H.R. 3751 would of course require
OPM to study and present recommendations under which dental and
vision benefits could be made available to Federal employees
and retirees and other appropriate classes of individuals.
Regrettably, since the bill was introduced so recently, the
administration has not yet developed a position. Therefore, I
am not able to express a view on it at this time. I can say,
however, that even where there is no objection to conducting a
study or review, traditionally the administration has objected
to any statutory requirement to make recommendations.
I will, of course, be happy to discuss the extent of dental
and vision coverage under the current FEHB Program. At Director
James' request, we have been gathering information on dental
and vision care programs so we can be aware of the practices of
other employers and cognizant of industry trends. I also would
be happy to offer any information I have about how such
programs are structured and administered by the industry for
other purchasers. I would be pleased to answer any questions
you might have in that regard.
[The prepared statement of Ms. Block follows:]
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Mrs. Davis of Virginia. Thank you, Ms. Block.
Mr. Wristen, you will be recognized for 5 minutes.
Mr. Wristen. Thank you, Chairwoman Davis, and members of
the committee.
I am Ed Wristen, president and CEO of First Health. First
Health is a premier national health benefits services company
and provides integrated managed care solutions serving the
group health, workers compensation, State agency and Federal
Government markets.
First Health has been a provider of managed care services
in FEHBP since 1985. Since July 2002, First Health has served
as the plan administrator, underwriter, managed care service
provider and PBM, fully integrating all those functions for the
second largest plan in the program, Mail Handlers Benefit Plan.
We appreciate this opportunity to present testimony on H.R.
3751.
As a company that strives to remain at the cutting edge in
providing quality health care options, we believe we can offer
valuable perspective and assistance in this matter.
What are the current options for dental and vision
benefits? We would like to emphasize that Federal employees
currently have dental and vision benefits available to them for
many plans participating in FEHBP. Currently, there are 12 fee
for service plans, 6 open to all Federal employees and 6 closed
plans limited to employees of specific agencies. Approximately
70 percent of all FEHBP members are in these 12 plans. Five of
those six open fee for service plans and three of the six
closed fee for service plans have dental benefits included in
their FEHBP offerings. The remaining 30 percent of FEHBP
enrollees are in some 210 comprehensive, or HMO plans, some of
which offer dental coverage in the FEHBP benefit packages.
In addition, five open fee for service plans with dental
also offer supplemental dental plans to their members at 100
percent member cost that augment FEHBP offerings, and three
offer supplemental vision plans.
Finally, four of the six closed plans offer supplemental
dental and vision, and in addition many of the HMOs in FEHBP
offer supplemental dental or vision benefits.
The benefit issue OPM is to study is not one characterized
by lack of availability. Numerous options already exist for
Federal employees to obtain dental and vision benefits. The
issue that merits attention is how the delivery of these
benefits can best be enhanced while maintaining a strong and
viable FEHBP.
How can the existing structure be enhanced? Obviously, what
would be most attractive to Federal employees is the
enhancement of dental benefits and the addition of vision
benefits to current FEHBP offerings. If this were done, the
Federal Government would shoulder most of the increased cost.
However, budgetary constraints impacting FEHBP since the early
1980's have served to limit virtually any benefit increases,
especially those for dental or vision benefits. We do not see
these constraints changing substantially in the current
environment, although some relaxation of this situation would
be warranted and welcome.
What OPM has done to address budgetary constraints is
arguably a reasonable approach: They have allocated scarce
government contribution dollars to preserve medical benefits
rather than permitting benefit increases for dental benefits or
the addition of vision benefits existing in FEHBP plans since
1987. Thus the dental benefit offerings with FEHBP have been in
effect at 1987 levels. This has led to the state of affairs
where they are considered inadequate by 2004 standards.
What about supplemental plans? Many of the FEHBP plans
offer various supplemental dental plans to compensate for the
FEHBP dental coverage occasioned by the freeze. This has been
done with OPM's knowledge, encouragement, and assistance. OPM
allows FEHBP carriers to use their official plan brochure to
announce the availability of non-FEHBP offerings, such as
dental and vision supplements, and permits FEHBP to discuss the
offerings at health fairs. These dental and vision supplemental
offerings have become part of these FEHBP plans' total
offerings to Federal employees.
Why is the government carve-out for dental and vision not a
solution? Introducing a new carved-out dental or vision benefit
plan will upset the current competitive balance in FEHBP which
has served the government and Federal employees since inception
in 1960, and it will do so without any discernible benefit as
these benefits are already available. There is no magic bullet
of cost savings or quality of benefit gains. Instead, doing so
by creating an additional subcontracting system would add cost
and complexity where there already exists a system and
experienced carriers providing dental and vision benefits. The
existing system can handle any enhancements that Congress or
OPM desire to see made in dental or vision benefits. And with
minor adjustments, they are currently offering benefits to the
broad health care needs of Federal employees.
Why is the long-term care program not a model? The issue at
the heart of this bill doesn't require a new contracting system
like created for long-term care. That offering was an entirely
new benefits program. Dental and vision have been an integral
part of FEHBP for years. We already have the infrastructure in
FEHBP, and using the current FEHBP and its carriers will
preserve the competitive environment. The system of balanced
competition is a model for private sector and Medicare reform.
It shouldn't be tampered with. Any new resources by the
Congress or OPM should be used to enhance the existing program.
Chairwoman Davis and members of the committee, thank you
again for this opportunity to share our views. I hope that my
testimony helps clarify some of the issues associated with the
delivery of dental and vision benefits, and would welcome the
opportunity to further work with you and your committee as you
examine those issues.
[The prepared statement of Mr. Wristen follows:]
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Mrs. Davis of Virginia. Thank you, Mr. Wristen.
I would now like to recognize Dr. Stan Shapiro. Thank you
for being with us today, and you may proceed with your
statement. You are recognized for 5 minutes.
Dr. Shapiro. Chairwoman Davis and members of the
subcommittee, my name is Dr. Stanley Shapiro, and for more than
33 years I have been privileged to provide dental benefits,
both as a practicing dentist as well as an executive officer of
one of America's leading dental benefits companies. I am
grateful for this opportunity to speak with you today in
support of H.R. 3751, which may potentially lead to expanding
Federal employee health care benefits to include voluntary
dental and vision plans.
Our Nation has made great strides in educating Americans
about the importance of oral health, and there is a growing
recognition that oral health is integral to general health. New
products, therapies, and technologies have enabled people to
retain their natural teeth throughout their lives, thereby
enhancing their health and well-being. Today, the percentage of
Americans who receive dental care is higher than ever before,
and I believe this has occurred as a result of third party
funding through government programs for the underserved and
private dental coverage offered in the workplace. Statistics
indicate that 54 percent of all Americans currently have dental
coverage, yet throughout my career I have witnessed the role
that cost has played as a barrier to accessing dental care.
This is unfortunate since it is well established that dental
disease is preventable, and children who receive routine
preventive care have the opportunity to live their lives free
from dental cares and periodontal disease. Oral Health in
America, a report of the Surgeon General in the year 2000,
stated that children from families without dental insurance are
three times more likely to have dental needs than children who
come from families with dental insurance.
The FEHBP is a successful model for demonstrating the
purchasing leverage of the Federal Government and the ability
to provide choice among the types of plans offered. But while
some of these medical plans include dental and vision benefits,
they are difficult to evaluate and typically provide very low
levels of coverage when compared to the wide array of plans
that are readily available in both the public and private
sectors.
To demonstrate this point, we have evaluated 150 FEHBP
medical plans to define the levels of dental benefits coverage.
Out of 150 plans, only 1 provided preventive dental care for
children. Out of 150 plans, only 14 offered orthodontic
coverage. Furthermore, reimbursement levels and annual maximum
benefits were limited. Similar results occur for vision
benefits, creating a confusing basis for FEHBP participants to
evaluate the cost of high option medical plans against the
actual benefits received. All too often there are failed
expectations, and the perception is that dental and vision
benefits offered by FEHBP are inadequate and disappointing.
This is exacerbated by the escalating costs and structural
changes in health plans that Federal employees encounter when
selecting the appropriate medical coverage for their families.
The FEHBP acknowledges the low dental benefits levels and
communicates this fact on its Web site to Federal employees. It
responds to a frequently asked question, by stating, ``Everyone
wants to keep premium increases as low as possible, so
generally, to increase benefits plans make tradeoffs. We would
not want to sacrifice medical benefits to get dental or vision
benefits.''
In contrast, employees of 48 State governments have
voluntary dental benefits, and 44 of those are stand-alone
plans that offer benefits which are superior to those included
in the FEHBP medical plans. In my home State of Florida, for
instance, State employees may select from eight different
stand-alone dental plans, and more than 50 percent of employees
currently participate in one of the plans. For the past 3
years, and despite rising medical costs, enrollment in the
voluntary dental plans in Florida has increased as a percentage
of the work force from 49 percent in 2001 to 55 percent in
2003. The same trends hold true for the voluntary vision plan.
In the private sector, dental plans are both varied and
affordable. Of the three most popular plan types that include
orthodontic coverage, the average monthly premium for an
employee is $14.10 for a dental HMO, $22.07 a month for a
dental PPO, and $28.20 for a full indemnity plan. An employee
can cover his or her spouse and children through a dental HMO
for an average monthly premium of only $36.35. Once enrolled in
the plan, there are typically no deductibles or annual
maximums, no charges for preventive care, minimal direct cost
for restorative care, savings of up to 50 percent on major
services, and reductions of 25 to 50 percent in the cost of
orthodontic treatment. It is no surprise that employees
appreciate this purchasing leverage and utilize dental plans to
facilitate their access to care.
Employers have learned that dental benefits are an
important component of employee benefit programs. Surveys
indicate that 95 percent of employers with 500 or more
employees provide dental benefits as well as 48 of the 50 State
governments and thousands of county, city, and municipal
government and school districts.
In the competition for quality employees, voluntary dental
and vision benefits fulfill employee expectations and create a
competitive advantage for any employer. With the largest work
force in America, the Federal Government can establish without
cost a more comprehensive ancillary benefits program that will
enhance the oral and general health of Federal employees and be
perceived with value by all participants.
To that end, I urge you to support H.R. 3751. Thank you
very much.
[The prepared statement of Dr. Shapiro follows:]
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Mrs. Davis of Virginia. Thank you, Dr. Shapiro.
I now would like to recognize Mr. Seltenheim. You are
recognized for 5 minutes.
Mr. Seltenheim. Good afternoon, Chairwoman Davis, Ranking
Member Danny Davis, and members of the subcommittee. Thank you
for the opportunity to testify before the subcommittee on
providing stand-alone dental benefits to Federal employees. My
name is Jon Seltenheim, and I am chairman of the Board of
Directors of the National Association of Dental Plans.
NADP represents the vast majority of regional and national
companies that offer dental benefits. I testify today
supporting H.R. 3751. NADP believes OPM will conclude as we
have that FEHBP should provide dental benefits in the same
excellent manner they provide medical insurance coverage to
Federal employees, their families, and retirees. However,
unlike the majority of private sector programs, FEHBP provides
little in the way of dental coverage.
The first portion of my testimony points out the value of
dental coverage. And this is not simply anecdotal, but comes
from Federal Government reports, empirical data, claims data
from our member companies, and reports generated from impartial
research institutes.
The landmark 2000 Surgeon General Report, ``Oral Health in
America,'' has as its primary theme ``Oral health is integral
to general health.'' This report documented that the two
primary dental diseases, caries and periodontal disease, are
still common and widespread despite safe and effective measures
to prevent them. The report goes on to document that the
primary barrier to dental care is cost, and the existence of
dental benefits helps to overcome this barrier and provide
access to care.
Beyond cost, research continues to show that the potential
association of dental disease, especially advanced periodontal
conditions, with coronary heart disease, has an association
with coronary heart disease, stroke, and low-weight premature
babies. Dental disease does have broader health and financial
impacts which must be considered in reviewing the value of
dental benefits.
In the 2000 report of the Surgeon General, the estimate was
that 108 million Americans did not have access to a dental
benefit, about two and a half times the uninsured medical
population. The report also noted that 70 percent of
individuals with private dental insurance reported seeing a
dentist in the past year, while 50 percent of those without
dental benefits did, a 120 percent difference.
So you can clearly see that dental benefits facilitate
people going to the dentist. And as the report notes,
preventive care is essential to keeping down overall dental and
medical costs, because early detection of other diseases can be
found through oral checkups, especially things like oral
cancer.
The National Institute of Dental and Craniofacial Research
estimates that for every dollar spent on dental disease and
prevention, $4 is saved in subsequent treatment costs.
Therefore, promoting access to dental care is essential to
keeping up our Nation's oral and general health.
Based on the 2003 NADP/DDPA dental benefits report,
enrollment is conservatively estimated in the year 2002 to be
154 million Americans, or about 54 percent of the population
have dental coverage. This is a 63 percent increase from the
1989 HHS report.
The products that comprise the market have changed over
time with the most recent growth being in the PPO market and
discount dental segments. The most accurate look at what U.S.
employers provide in terms of dental benefits is the Mercer
Survey of Employer Sponsored Health Plans. This 2003 report
found that 66 percent of all employers provided dental, 96
percent of employers with more than 500 employees, and 98
percent of large employers, those with over 20,000 employees,
provided a dental benefit. For county, city, and State
government entities, the survey revealed that 95 percent of
government employers with more than 500 employees offered
dental benefits, with a median deductible and maximums of $50
and $1,000 respectively. This would indicate that most are
offering comprehensive fee-for-service programs. This is
significant as it definitively illustrates that FEHBP is out of
step in this arena with similarly situated large employers,
whether private or governmental.
In conclusion, the study requested of OPM is timely and
important to the oral and physical health of Federal employees.
NADP believes that offering a dental benefit to Federal
employees will not only provide a valued dental benefit from
the employee's perspective, but will also serve to provide a
benefit package that is more competitive with other
governmental, commercial and military offerings. NADP stands
willing to provide additional detail in these and other areas
of investigation by OPM in response to the study requested by
H.R. 3751.
[The prepared statement of Mr. Seltenheim follows:]
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Mrs. Davis of Virginia. Thank you, Mr. Seltenheim.
Dr. Braverman, if you will bear with us for a moment. We
have been very blessed to have our chairman of our full
committee Chairman Tom Davis join us, and he is no stranger to
caring about our Federal employees. And Chairman Davis, you are
recognized for an opening statement.
Chairman Tom Davis. Well, first of all, thank you very much
for being with us, and thank you, Madam Chairwoman and the
other members. I think you can see the level of interest here
on the subcommittee and full committee in trying to move this
ahead.
FEHBP I think is a great program, but it's not going to
remain a model for excellence in employer-provided health care
coverage unless we continue to explore avenues to enhance the
care and choice provided, And I would ask to put my entire
statement in the record if that will be OK.
Mrs. Davis of Virginia. Without objection.
[The prepared statement of Chairman Tom Davis follows:]
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Chairman Tom Davis. But we appreciate you being here today,
and I think we would like to move ahead on this if we can. But
see how the hearing goes, and maybe we can proceed to markup in
the next few weeks. Thank you for your leadership.
Mrs. Davis of Virginia. Thank you, Mr. Chairman.
Dr. Braverman, thank you so much for being patient, and now
we will recognize you for 5 minutes.
Dr. Braverman. Thank you.
Chairwoman Davis and Chairman Davis and members of the
subcommittee, I am Howard Braverman, past president of the
American Optometric Association. Currently, I am chairman of
the AOA's Industrial Relations Committee and I am proud today
to represent the American Optometric Association on this most
important issue that's before you.
The AOA is a national organization that represents more
than 30,000 doctors of optometry, educators, and students. We
are dedicated to improving the visual health of the public, and
appreciate the opportunity to be here today to discuss the
important issue of vision care in the Federal work force.
AOA fully supports the intent of H.R. 3751 to require the
Office of Personnel Management to study the issue of vision and
dental benefits, and also to recommend to Congress how these
can best be offered to all Federal employees. This is not only
an important benefit, but an important health care issue, one
that can enhance both employees' quality of life and their
efficiency and job performance in the workplace. We commend you
for your leadership on this issue.
In my remarks today, I will outline for you the need
Americans, especially those of working age, have for routine
vision care as well as the extent to which employees desire a
vision benefit.
The U.S. Department of Health and Human Services estimates
that 64 percent--that's 64 percent of the work force older than
17--need some form of visual correction. But in addition to the
work force, we are really talking about 160 million Americans
who need eyeglasses or contact lenses. And the sad truth is
that fewer than 93 million get regular vision health care.
Today, vision care has become a valuable benefit not only
to employees but also to their employers. There are a number of
factors that are influencing that realization to both employer
and employee. The first is presbyopia. In the aging work force
it is the No. 1 reason why employees today are seeking a vision
benefit that not only includes a comprehensive eye health
examination but glasses or contact lenses at a reasonable cost,
for by age 40 people start to experience a visual loss in the
ability to read due to the aging process.
The second reason is that computers in the workplace have
now caused a new syndrome called computer vision syndrome
[CVS]. Workers who spend considerable time at computers are
significantly at risk for this syndrome that causes headaches,
dry eyes, and other related problems. The ability to have
regular eye health examinations and glasses at a reasonable
cost can go a long way to combat this problem.
Employees today have realized that eye health care is a
must for their families. Mothers and fathers have learned that
if their children can't see then they can't learn. And today,
the State of Kentucky requires children to have a comprehensive
eye health examination, not just a screening, prior to entering
public school. However, whether it's required or not, parents
are realizing that it's most important to have their children's
eyes examined prior to entering school. A voluntary vision
benefit would be a great help to employees to pay for their
families' regular eye health care and glasses or contact
lenses.
Routine eye examinations provide an opportunity for early
detection of potentially life threatening health problems, such
as high blood pressure, arteriolosclerosis, and diabetes,
diseases which, if they are not detected early, can result in
major and expensive complications. There are many other serious
conditions that can be identified through eye health
examinations. They include glaucoma, cataracts, and macular
degeneration, and of course diabetic retinopathy. Early
treatment of these conditions is the key to avoiding serious or
total vision loss.
Our senior citizens and our retirees have a great need for
vision care, but only 16 percent have vision benefits. Forty
percent of America's senior citizens report that the cost of
routine eye examinations is just prohibitive. A recent Family
and Work Institute study also found vision care to be one of
the chief benefits that employees seek. In this study, vision
benefits ranked second among nearly 40 optional benefits as the
program for which they were willing to trade an existing
benefit. In response to this demand, vision care benefit plans
are more and more becoming one of the tools employers use to
compete for talented employees.
For these reasons, and because people wear glasses and/or
contact lenses for cosmetic reasons, a voluntary vision benefit
for Federal employees will help control costs of these health
requirements. The cost of a vision plan is low, about 3 percent
of the cost of a medical premium. On average, American
employees and their families would pay between $8 and $10 per
month for their vision benefit. The premium is not so high that
workers do not find it an attractive addition to their benefits
portfolio.
The American Optometric Association supports regular eye
examinations for everyone, and strongly endorses a voluntary
benefit for Federal employees. We would be pleased to be of
service in helping to point out the important considerations
for selecting a vision plan. Improved access to eye care is an
important component in any comprehensive health care strategy.
Before closing, I would like to also urge the subcommittee
to favorably consider another piece of legislation, H.R. 3268,
introduced by Congressman Cummings. H.R. 3268 would extend the
same glaucoma screening coverage provided today by Medicare to
Federal employees who are in high risk populations. This is a
simple yet important step in the early detection and treatment
of this debilitating disease. Caught early enough, glaucoma can
be managed and serious damage, which can include blindness, can
be prevented. The long-term savings both to society and to
individuals whose quality of life will be preserved as a result
of these screenings is well worth the modest investment to the
program.
Thank you again for the opportunity to appear before this
subcommittee, and I will of course be happy to answer any
questions.
[The prepared statement of Dr. Braverman follows:]
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Mrs. Davis of Virginia. Thank you, Dr. Braverman, and thank
you to all of our witnesses.
I would like to now move into the question-and-answer
period, and I would like to yield to our Civil Service
Subcommittee ranking member, Danny Davis. Mr. Davis, you have
the floor.
Mr. Davis of Illinois. Thank you very much, Madam
Chairwoman, and this is a question perhaps we could each
respond to. Oftentimes when we start talking about dental
health and the provision, there is a perception that it is too
costly to provide. How do you respond to that perception?
Mr. Seltenheim. On a percentage basis of cost versus the
medical premium, it's about 8 to 10 percent of the total
medical premium that we see today. So we would say that it's an
excellent benefit in relation to cost.
Dr. Shapiro. I would add, sir, that in the marketplace
today there are such a wide variety of plans that if they were
offered in a balanced program where this variety were added
people could access the plan that best suited their individual
needs. And as I indicated in my testimony, the price of some of
these plans is very modest. You can then select the plan that
is best structured to help you accomplish the types of cost
savings you need to access your dental care.
Mr. Davis of Illinois. Would you have any recommendations
in terms of cost sharing? That is, any part or percentage the
employer should pay with the employee paying the rest.
Dr. Shapiro. My experience over my career of 25 plus years
in this industry is that every employer views it in a different
way. I will tell you, however, that in purely voluntary plans
where there is no cost sharing, there is still a very high
demand by employees. As the cost sharing goes up, of course
then those numbers go up as well.
Mr. Seltenheim. And I would add that, you know, you can
start with no contribution, you can then move to some employer
contribution. And typically what the larger Fortune 500 firms
are doing today is they are simply giving health credits that
go toward medical and dental, so the employee has the choice as
to the combination of medical and dental plans that they would
choose to pursue based off of what their individual benefit
needs are. So a family is going to have different types of
benefit needs than an older couple or a single, so many
employers are going to benefit credits and using that as a way
of allowing the choice to be the employee's.
Mr. Davis of Illinois. Are we familiar with any research
which delineates how important individuals feel that vision
care is, how people feel about their vision, and the extent to
which it should be taken care of?
Dr. Braverman. I can't speak to any particular plan, but I
would be happy to supply the committee with the American
Optometric Association studies that have shown how important
vision care is and the advantages of having a voluntary vision
plan. For example, the average cost of an eye examination and
eyeglasses is well over $300. We are just looking at the
premium for a stand-alone voluntary vision plan, it is one-
third of that. So certainly we would be happy to supply you
with that type of information, sir.
Mr. Davis of Illinois. Thank you very much.
I have no further questions, Madam Chairwoman.
Mrs. Davis of Virginia. Thank you, Mr. Davis.
Ms. Block, what is OPM's view of the adequacy of our
current FEHBP dental and vision benefits, and how does it
compare with the private sector?
Ms. Block. Well, I don't have extensive data. My
understanding is that there is a very broad range of what's
actually offered in the private sector. So there is not a
single model out there that one could compare us to. Without
doubt, as has been said, we have established certain priorities
in the FEHB Program, and those priorities have been in place
for a number of years. And we work very, very hard, and under
the guidance of Director James, as you know, we have worked
particularly hard in the last few years to keep our premium
increases below the national average and affordable for Federal
employees and retirees.
Mrs. Davis of Virginia. Let me interrupt you.
Ms. Block. And so there is a tradeoff involved.
Mrs. Davis of Virginia. Let me interrupt you right there.
You said that those benefits have been in place for many, many
years. Why hasn't OPM allowed any increases in the benefits
since 1987?
Ms. Block. Because to have allowed those increases without
reducing medical benefits would have caused even greater
premium increases than we have faced.
Mrs. Davis of Virginia. Does the administration have a
position on providing an increase in dental and vision benefits
for the Federal employees?
Ms. Block. The administration does not have a position as
yet on that issue.
Mrs. Davis of Virginia. When do you expect them to have a
position on what I consider to be a very important issue?
Ms. Block. I don't have a specific timeframe. But given the
introduction of your bill, we are clearly looking at it.
Mrs. Davis of Virginia. What kind of a plan do you think
that the Federal employees would probably take most advantage
of? A stand-alone or what? Do you know?
Ms. Block. I think that all of the issues that have been
raised both by members of the subcommittee and the members of
the panel are exactly the kind of issues that we would have to
consider were we to do the study proposed under H.R. 3751. So I
don't have an opinion at this time. Those are exactly the right
issues to look at.
Mrs. Davis of Virginia. Is it possible to increase, in your
opinion, the dental and vision benefits within FEHBP without
expending any additional Federal money by reducing other rarely
used health benefits currently offered by some of the plans?
Assuming there are some pretty rare benefits that aren't used.
Ms. Block. Well, there really aren't any rare benefits that
aren't used. There is some group of people somewhere that are
using every single benefit that is available now. The rate at
which people use benefits of course varies, but the nature of
the benefit dictates that certainly fewer people go to the
hospital than visit the doctor; but we surely wouldn't want to
reduce hospital benefits because that's the case. So we have
carefully balanced the benefits with the help of our partners,
the insurance carriers, over the years to try to provide as
good a balance of comprehensive benefits as we believe is
affordable for our Federal employees and retirees.
Mrs. Davis of Virginia. What if you had an enrollee paid
stand-alone package as opposed to an increase in the dental/
vision benefits within the FEHBP? Do you think that would
provide the best opportunities to select coverage suited to the
needs of a particular employee and her family if it were an
employee-paid stand-alone?
Ms. Block. That would be one of the things we would have to
look at as we study the issue more carefully toward evolving an
administration position. I don't have a position at this time.
Mrs. Davis of Virginia. Do you think that offering a stand-
alone dental/vision plan would result in damage to the current
competitive foundation of the FEHBP, since current FEHBP health
plans can distinguish themselves by combining supplemental
dental policies with their health benefit plan?
Ms. Block. I had not thought of it in that context, but it
would certainly be something in the course of a study that we
would want to discuss with the participating carriers in the
FEHB program.
Mrs. Davis of Virginia. And just to clarify one thing, you
said you are not allowed to give us recommendations? Is that
what you said?
Ms. Block. Yes. I believe that is the position of the
Department of Justice that the legislative branch cannot
require the executive branch to provide recommendations.
Mrs. Davis of Virginia. Thank you very much, Ms. Block.
Ms. Holmes Norton.
Ms. Norton. I don't know if this is the park police case or
not sprouting forward, Ms. Block, but my sympathy is with you.
How many--approximately what percentage of employees have some
dental health through FEHBP?
Ms. Block. I think that depends on whether you consider
what's available within the FEHBP plans, per se, or as Mr.
Wristen mentioned in his statement, the various supplemental
plans that are available.
Ms. Norton. Give me both.
Ms. Block. If you include the ones that have some
supplemental benefit and/or an FEHBP benefit available, you are
probably looking at close to 70 percent of the employees in the
program. I don't have the exact number off the top of my head.
Ms. Norton. So would you therefore characterize this as
less a matter of access than of cost, since it looks like a
great many have some form of dental insurance?
Ms. Block. I think it's a question of how people view
access, how or where they are, or what's available to them
through the various plans, and what their expectations are.
Ms. Norton. Would most of these--I note, for example, in
Mr. Wristen's testimony--and I'm quoting here at page 2, the
five open fee for service plans offer supplemental dental
benefit plans to members at 100 percent of member cost. All of
those supplemental plans would be at 100 percent of member
cost. Now, it's hard for me to get around what you have done
because it's hard for me to say that you have made an incorrect
judgment in assuming that simply adding dental could be done
without some kind of tradeoff, unless the Federal Government
were willing to step up somehow with a greater amount of money.
Let me ask you this. Given your experience--and don't tell me
you haven't done a survey, I understand that. Do you believe
employees would rather have a greater contribution to their
FEHBP plan, greater than 70 percent or whatever it is, if they
were given that choice as opposed to dental and vision
additions to their plan?
Ms. Block. Ms. Norton, I truly am in no position to answer
that question. I simply don't know the answer. I can't speak
for Federal employees as a group.
Ms. Norton. That's something--you know what? I don't know
why FEHBP wouldn't at least--since 1987 have wanted to find out
what employee preferences are. It seems to me that you ought to
be doing that every few years anyway. Could I ask that you do
that, to find out what their preferences are without promising
to do anything, which are you not in a position to do anyway?
Ms. Block. Well, I'm not in a position to promise that we
could do such a survey, but it's certainly something that we
could consider.
Ms. Norton. Let me enter this notion about a wholly
different infrastructure. Clearly, if an employee wants to pay
for it, they can get dental, some dental. Now, are most of
these plans--what we are accustomed to hearing is that these
companies will pay for an itsy bitsy amount of what the dental
work costs. I'm not sure about vision work. Are most of these
70 percent employees getting fairly minimal benefit in costs
toward their dental work out of these plans?
Ms. Block. I think each plan has a different structure, so
I can't really generalize for all of them. Clearly, always, as
with the FEHBP in general, premiums have to cover the cost of
providing the benefit. That's always the issue. You always need
to be sure that you have enough revenue to provide the services
that you are contracting to provide. And that's why I don't
know the answer. We don't get involved in any way with the non-
FEHBP dental offerings, so I don't know data on them.
Ms. Norton. What about the FEHBP dental offerings? Is that
minimal? Tell me what you do know, Ms. Block.
Ms. Block. The FEHBP, the current FEHBP offerings are
typically a fee schedule, and that fee schedule has not
increased in recent years.
Ms. Norton. So that's what makes the amount so low that the
employee can get?
Ms. Block. And that's typical. There are exceptions to
that. I mean, some of the HMOs actually provide services, for
example. So again, because we have so many choices in the FEHB
Program, there is no single structure or benefit pattern that I
can say is typical of all of the FEHBP.
Ms. Norton. What I'm confused about, and perhaps you, Ms.
Block, perhaps the other panelists, can help me out on, is the
notion of a stand-alone plan. I mean, why would we want an
entirely new infrastructure that somebody has to pay for?
That's what we have now. We have thousands of insurance
companies, and that's where all our money goes. Our money
doesn't go to health care, it goes to keep health care plans
running. So once somebody tells me that we need another stand-
alone something, I want to know more about what you mean by a
stand-alone plan, why whatever we are talking about couldn't
just be part of FEHBP. That stands right there. Why couldn't we
just incorporate it in there? What is to be gained by a wholly
new infrastructure for some of the health care we would provide
our employees?
Ms. Block. Well, since we have not made any proposal in
terms of any approach, I would defer to the other members of
the panel who have addressed this issue.
Mr. Seltenheim. In terms of an objective for employees, I
think the value of stand-alone benefits that is not within
necessarily the medical offerings themselves could result in a
high reimbursement rate and less out-of-pocket cost to the
actual employees and their family members. I mean, I think
that's part of the value of doing a study, is to take a look at
what the reimbursement rate levels are today under some of the
various plans and make a determination.
Ms. Norton. Could you explain why--less cost to employee
and higher reimbursement rate if it's a stand-alone plan?
Mr. Seltenheim. Right.
Ms. Norton. Would you have several plans all competing with
each other?
Mr. Seltenheim. And that's part of what helps to I think
provide an opportunity. With the opportunity of choice
employees can make a determination as to what benefit level are
they seeking, what type of network do they want to have access
to, and they can make a decision as to potentially what their
out-of-pocket costs are. As of right now, where there are
offerings it's in fact embedded within medical plans, although
there are some supplemental programs available. I think it's a
matter of offering employees greater choice, is what it boils
down to.
Ms. Norton. Thank you, Madam Chairwoman.
Mrs. Davis of Virginia. Before I go to Mr. Van Hollen, I
just want to say--I had a town hall meeting recently and talked
about the long-term health care plan, and it is my
understanding that it is strictly with one carrier, and there
is no competition. A lot of the people don't feel that they
have a real choice because there is no competition.
Ms. Norton. For FEHBP?
Mrs. Davis of Virginia. For long-term health care
insurance.
Ms. Norton. For our long-term health care? Well, maybe Ms.
Block would want to tell us why they decided on that.
Mrs. Davis of Virginia. That's another hearing, and we are
going to ask those questions then. But I think that's the
whole----
Ms. Norton. We didn't just--we are not doing a monopoly
here. There was a competition, but they competed and this is
the guy who said he would give us the best price.
Mrs. Davis of Virginia. Right. And there are a lot of
complaints because they don't feel they have a choice now. And
that's why I think that doing this where you have several
different plans and several different carriers would give
Federal employees better options. I don't know, but we can ask
those questions at another hearing. I don't want to beat this
horse to death.
Mr. Seltenheim. Just another thought. It's not only a
matter of cost and types of plan, but it's also a matter of
access. Who has a large network in a particular area that would
become attractive to an employee is something else to factor
in.
Mrs. Davis of Virginia. Thank you, Mr. Seltenheim.
Mr. Van Hollen.
Mr. Van Hollen. Thank you, Madam Chairwoman.
I have a question, Ms. Block, just in terms of the
administration's position on this. I realize you don't yet have
a position, we don't know exactly when you have will have a
position. I don't know what the schedule is for moving forward
with the markup, but I hope we will have the benefit of the
administration's views before that time. I want to make a
distinction here because I wasn't quite clear what you meant by
saying the Attorney General has taken the position that you are
not required to make recommendations based on a request from
Congress. It's one thing to say you oppose the bill, it's
another thing to take the position that if the bill passes,
because of separation of powers issues you are still not going
to respond because it requires recommendations. And so what I
want to know is if you're suggesting that the administration is
taking the position that even if this bill passes that you are
not required to respond.
Ms. Block. No. I don't want to be misunderstood. We would
be required to respond. We would certainly do the study, and we
would be pleased to provide options. We simply would not be
able to give recommendations unless the administration chose to
do so.
Mr. Van Hollen. OK. So you would----
Ms. Block. I don't mean in any sense that we would
disregard the provisions of the bill.
Mr. Van Hollen. So you would respond by providing options,
but not say this is our preferred option. Is that it?
Ms. Block. That's correct.
Mr. Van Hollen. Thank you. Just with respect to the last
paragraph of your testimony, you said that, ``OPM has been
gathering information on dental and vision programs so that we
can be aware of the practices of other employees and cognizant
of industry trends. I also would be happy to offer information
I have about how such programs are structurally administered by
the industry for other purposes.''
Could you give us, based on that review, your conclusions
as to whether you see others in the industry providing greater
benefits and still being able to contain costs in a way that
could be a model? I understand you can't bless any model that
could be a good model for us.
Ms. Block. Well, that's exactly what we've started from a
very preliminary perspective to look into. And at this point
we're just asking questions. We have certainly not reached any
conclusion. I have had the good fortune of meeting with some of
the members of the panel, for example, and the organizations
that they represent. But it has been strictly in terms of
trying to understand how the industry functions and what the
industry offers other employers in terms of structures, plan
type, and so on. So we're at the very preliminary stages of
trying to collect that kind of information, since up until now
we have not offered or thought about a discrete benefit for
dental or vision. This is very preliminary-stage information
gathering for us.
Mr. Van Hollen. OK. Now, I'm not sure I understand exactly
how the FEHBP works in this respect. As I understand it, we put
a freeze on an expansion of dental benefits under FEHBP; is
that right?
Ms. Block. Well, what we have done in terms of the
expansion of any benefit, we have had a tradeoff policy for the
expansion of any benefit in the FEHB Program for a number of
years. And that's for cost containment purposes. So any time a
carrier proposes to increase benefits or add benefits in one
area, we look for a tradeoff that will cover the cost of
expanding that benefit from some other area.
Mr. Van Hollen. Sure. OK. So if a carrier is providing a
plan under FEHBP right now, and they came to you and said, we
want to expand dental benefits in this way and we're going to
reduce other benefits in that way, they could do that now.
Ms. Block. Well, we would prefer that they wouldn't. And we
have asked carriers not to do that for a number of years
because we have made the determination that, as valuable as we
believe dental and vision benefits to be--and I don't want to
at all give the impression that we don't understand the
importance of those benefits, indeed we do, as we understand
the importance of other benefits that our employees have
expressed an interest in--we have simply made the determination
that things like hospital care, physician care, maternity
care----
Mr. Van Hollen. If I might ask you----
Ms. Block [continuing]. Are our priorities and those are
the things that we need to prioritize.
Mr. Van Hollen. Yes, I understand that. And that may well
be my choice. And I don't know how FEHBP works completely, but
my understanding--let's say a carrier was given that choice,
and they did increase dental benefits and they reduced benefits
somewhere else; isn't the ultimate choice left to the consumer?
Wouldn't that mean that they had--why would they do that if
they didn't think more people were going to sign up? And if
they did think more people were going to sign up, why don't you
let them take the risk in making that determination rather than
deciding for them?
Ms. Block. There are other considerations that have to be
weighed, considerations that have to do with anti-selection,
for example. If one carrier offers a benefit that is typically
used by otherwise low-utilizing members and drops a benefit
that is typically very expensive, therefore discouraging
enrollment in that plan by high-utilizing members, you get into
a very dangerous anti-selection situation. And that's another
part of the equation that we have to consider.
Mr. Van Hollen. Thank you. Thank you very much.
Thank you, Madam Chairwoman.
Mrs. Davis of Virginia. Thank you, Mr. Van Hollen.
I enjoyed hearing the exchange on that and I guess I'm not
real sure what you just explained, because I sort of liked what
Mr. Van Hollen said, because when I came on board and saw the
brochure on all these different plans, I mean, there were a
gazillion choices. So why not, if we had a carrier that wanted
to offer more dental, why not give the employee that choice?
The other thing that I thought was--my legal counsel was
trying to explain it to me--in your responses several times,
you said you have done it to keep the cost down. Boy, do I hear
from my constituents how they get a little bit of a raise and
their cost goes up 47, 48 percent on their health insurance. So
I'm not sure I follow that line item. Maybe you can explain it
to me later.
I want to thank all the witnesses for coming. We probably
will have some questions for you for the record if we can
submit them to you in writing and have you respond. And we will
make sure that our members all have that same opportunity.
I'd like to again thank all of you for coming. I do think
this is a very important issue and one that we hear about a lot
from our Federal workers. Dental and vision plans are very
important to them. So I'm certainly hoping that if we can get
this bill passed, that we can get a study from OPM and maybe do
something to help our employees from here on out. But thank you
all very much for coming.
With that, the hearing is adjourned.
[Whereupon, at 4:15 p.m., the subcommittee was adjourned.]
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