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GAO: Postal health plan could mean higher costs to workers

Aug. 20, 2013 - 06:00AM   |  
By SEAN REILLY   |   Comments
Postal Service Announces End To Saturday Delivery
A U.S. Postal service employee leaves the loading dock to deliver mail from the Los Feliz Post Office on February 6, 2013 in Los Angeles, California. Some postal workers and retirees could face sharply higher costs under the mail carrier's plan to create its own health insurance program, according to the Government Accountability Office (Kevork Djansezian / Getty Images)

Some U.S. Postal Service workers and retirees could face sharply higher costs under the mail carrier’s plan to create its own health insurance program, according to the Government Accountability Office.

Although the bulk of almost 1 million active workers and retirees would pay about the same or less for premiums as under the Federal Employees Health Benefits Program, higher deductibles and out-of-pocket maximums would potentially mean thousands of dollars in extra expense for some workers, as well as retirees not yet eligible for Medicare, the GAO found in a newly released report.

Among the factors that would affect their expenses, according to the report: the amount and cost of care that they use; whether they have family coverage; and their reliance on out-of-network providers.

In a written response attached to the report, USPS human resources chief Jeffrey Williamson said the proposed plan would provide the great majority of enrollees with “comparable or superior health benefits, at a lower cost to participants.”

The GAO review is the most comprehensive look to date at the Postal Service’s bid to run its own health benefits program. The proposal, a key element in the agency’s long-term plan to return to profitability, would cut $7.8 billion in required payments during the first year of implementation, according to the report.

The bulk of that reduction would follow from the elimination of a congressional mandate that the Postal Service pay about $5.5 billion each year to “pre-fund” the cost of future retiree medical care. The Postal Service would also require retirees aged 65 and older to use Medicare for their primary health coverage, the report said.

The proposed changes would require congressional approval; a bill introduced earlier this month by Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla., would authorize the Postal Service to start talks with its employee unions on creation of its own plan, either independently or within the FEHBP.

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