Civil Service Should Audit Kaiser Plans' Premium Rates under the Federal Employees Health Benefits Program To Protect the Government

The Federal Employees Health Benefits (FEHB) program provided health insurance coverage for 9.5 million participants in 1976 and 9.7 million participants in 1977. The Kaiser-Permanente Medical Care Program (Kaiser) is the largest prepaid group practice program in the United States. The Federal Employees Health Benefits Act requires that rates charged under health plans' contracts shall reasonably reflect the cost of benefits provided. It is important that the Civil Service Commission (CSC) determine whether rates of the Kaiser plans of northern and southern California are reasonable since they are used to calculate the government's contribution to the FEHB program.