FOR IMMEDIATE RELEASE March 19, 1997

CONTACT: Sharon J. Wells (202) 606-1800 sjwells@opm.gov

Washington, DC--A recent General Accounting Office (GAO) study reports savings of over $600 million in 1995 by three health plans participating in OPMs Federal Employees Health Benefits (FEHB) Program. These savings also reduced pharmacy benefit costs of the plans studied by between 20 and 27 percent.

In its report, the GAO examined three FEHBP plans that contracted with pharmacy benefits managers (PBMs). PBMs manage pharmacy benefits on behalf of plan sponsors and help in controlling prescription drug costs. The plans, Blue Cross and Blue Shield Benefit Plan, the Government Employees Hospital Association, and the Rural Carrier Benefit Plan, cover about 50 percent of all FEHBP employees and retirees. OPM estimates that about 58 percent of federal enrollees were covered by a PBM.

We already know through our FEHBP plan surveys that the majority of enrollees are very satisfied with their pharmacy benefit services, said OPM Director Jim King. Knowing that significant savings can be accomplished without sacrificing service to our customers is especially gratifying and reinforces our commitment to maintain quality service and contain costs.

The FEHB Program provides medical benefits to almost ten million federal employees, retirees and their dependents. OPM contracts with nearly 400 health insurance carriers to operate the program, which annually holds an open season to give enrollees the opportunity to elect coverage in the program or to change health plan options.

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