Having the federal Office of Personnel Management run health exchanges for the uninsured – as the U.S. Senate health reform plan mandates – “does not mesh well” with the agency’s existing responsibilities, said one of the agency’s former directors.

A panel of former OPM directors, gathered for a discussion by the Heritage Foundation today (Jan. 20), explored the implications on the OPM and insurance delivery if the final bill winning approval includes the Senate’s provision calling for the OPM to administer health exchanges providing coverage to uninsured residents in states. The OPM already administers benefits to about 8 million federal employees, federal retirees and their dependents, through between 250 and 300 public health plans.

Employing health exchanges to provide coverage for the uninsured is different under the House of Representatives’ approach, which calls for a government-run insurance option. But the House proposal appears to have lost traction as Democratic Congressional leaders seek Republican compromises on a final bill.

Dan G. Blair

The increased responsibilities included in the Senate bill will tax the OPM heavily, said Dan G. Blair, who served as deputy director from 2002 to 2006 before becoming acting director for five months.

“It’s managing a government-sponsored health exchange for the uninsured,” Blair said. “The two programs to me don’t seem to mesh well.”

Blair called the Senate’s plan a gateway to its greater federal involvement in health insurance delivery. He noted that because the OPM mandate was added after the Senate Finance Committee voted the bill out of committee, no public debate on the proposal, nor any analysis on its cost, was considered by the Senate.

He said that approach was intentional. “I see this program as nothing more than a placeholder for the public option,” Blair said.

He added that the agency’s success in handling federal benefits “does not translate into successfully running the public option.”

A public option ‘substitute’

Another panelist, Donald J. Devine, who led the OPM between 1981 and 1985, shared Blair’s view.

“This is a substitute for the public option under another name. That’s what they [the Democrats] want,” Devine said.

Devine suggested that the bill “is not thought through,” leaving a number of unanswered questions and possible unintended consequences for federal employees, as the agency must wrestle with new and varied roles in the health exchanges.

Linda Springer, another panelist, who served as OPM director between 2005 and 2008 under President George W. Bush, said the possibility exists for OPM to become the “defacto health insurer” for everyone.

“Why was OPM picked [to administer the plan?” Springer asked. “To leverage federal health plan experience and knowledge of the federal health plan.”

To have any chance at success, the agency must have clearer direction on how to handle claims and risk. She added that the OPM cannot afford to shirk its responsibilities to federal employees if it adds duties.

“There has not been a full vetting of this arrangement,” Springer said. “If I were the director of the OPM, I would be scared to death….I wouldn’t know, it wouldn’t be clear to me what my role would be.”