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Washington, D.C.—The leader of the National Treasury Employees Union (NTEU) today urged Congress to take steps to reduce costs in the Federal Employees Health Benefits Program (FEHBP) to make it more affordable for the more than 8 million federal employees, retirees and their families covered under it.

“Some estimates find that as much as 6 or 7 percent of the federal workforce is unable to afford health insurance coverage at all,” NTEU President Colleen M. Kelley told a House subcommittee, noting that, with rising health care premiums and in the face of a three-year pay freeze, federal workers are finding it increasingly difficult to afford health insurance.

FEHBP premiums rose by an average of 3.5 percent in 2012, and another 3.4 percent this year, with premiums for some enrollees rising by significantly higher amounts—as much as 32 percent, Kelley said in submitted testimony to the House Oversight and Government Reform Subcommittee on the Federal Workforce. FEHBP is the largest employer-sponsored health plan in the country.

In addition to urging reduced costs, the NTEU leader offered support for FEHBP coverage of domestic partners, noting that the Defense of Marriage Act prevents FEHBP from covering even legally-married same-sex spouses of federal employees. “This is a discriminatory denial of benefits to one group of federal families,” she said, “and must be ended.”

President Kelley also expressed NTEU’s strong opposition to any steps to turn the FEHBP into a voucher plan, where the government pays a set amount each year and increases are based on the Consumer Price Index (CPI) rather than the much-higher annual increases in health care costs. Premium increases higher than the amount called for as a result of changes in the CPI would be the sole responsibility of the enrollee.

“Shifting additional health insurance costs to FEHBP enrollees, coupled with the ongoing federal pay freeze, would force even more federal employees to forgo health insurance,” she said. “NTEU opposes efforts to shift more costs to enrollees, including turning the FEHBP into a voucher program.”

Kelley’s statement also reiterated NTEU’s support for H.R. 1367, introduced by Rep. Stephen Lynch (D-Mass.), which would save $1.6 billion over 10 years in drug purchasing by the FEHBP.

Prescription drug costs account for approximately 30 percent of claims under the FEHBP, she told the subcommittee, emphasizing that the original purpose of using middlemen—known as Pharmacy Benefit Managers (PBMs)—to control drug costs has been unsuccessful.

“Rebates and discounts the PBMs receive from drug manufacturers are retained by the PBMs instead of being returned to the federal government to help keep FEHBP costs down,” she said. Among other steps, the Lynch bill addresses needed changes in the PBM arrangement.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.