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Federal Health Benefits Program: Stronger Controls Needed to Reduce Administrative Costs

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Report Type Reports and Testimonies
Report Date March 11, 1992
Report No. T-GGD-92-20
Subject
Summary:

GAO testified that the administration costs of the fee-for-service portion of the Federal Employees Health Benefits Program are higher than the costs for other large health benefits programs, mainly because the carriers are not given enough incentive to cut their operational expenses. GAO estimates that potential annual savings could range from at least $35 million in the short term, if the Office of Personnel Management improves its controls over the operational expenses of fee-for-service plans, to as much as $200 million through legislative reforms that would provide a more uniform benefits structure and change the way contractors are chosen and paid.

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