Health Insurance:

Comparison of Coverage for Federal and Private Sector Employees

HRD-87-32BR: Published: Dec 31, 1986. Publicly Released: Dec 31, 1986.

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In response to a congressional request, GAO: (1) compared selected health care benefits provided under the Federal Employees Health Benefits Program (FEHBP) and private sector health insurance programs over a 6-year period; (2) identified the cost of adding to the federal program selected health care benefits; (3) analyzed levels of FEHBP coverage for mental health benefits; and (4) obtained information on the use of selected health care cost-containment measures in FEHBP.

GAO found that, in 1985: (1) FEHBP enrollees were more likely than private sector employees in medium and large firms to have coverage for routine physicals, hospice care, and catastrophic protection, but less likely to have coverage for dental care, home health care, alcohol and drug abuse treatment, and extended care services; (2) the average employee contribution for the private sector was about $12 per month for single coverage and $38 for family coverage, while FEHBP monthly premiums were about $38 for individual coverage and $70 for family coverage; and (3) federal enrollees paid more for their health care costs in deductibles and coinsurance than private sector employees. GAO also found that: (1) the cost of added benefits in FEHBP would depend on the design of the benefit and its expected use by the enrollees; (2) private sector benefits were more stable than federal benefits; (3) FEHBP restructured its mental health coverage with higher deductibles, greater coinsurance, hospital and outpatient visit limits, and maximum dollar coverage with substantially higher costs to enrollees; (4) in 1987, FEHBP coverage of dental care and home health care has become more comparable to the private sector; and (5) the Office of Personnel Management encouraged FEHBP plans to adopt measures to contain health care costs, including second surgical opinion programs, preferred provider organizations, and utilization reviews.

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