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Federal Diary
Lawmakers Returning, Retirees Renew Fights Over Insurance Benefits

_____More Federal Diary_____
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Stephen Barr can be reached by e-mail at barrs@washpost.com.

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By Stephen Barr
Tuesday, September 2, 2003; Page B02

Federal retirees are looking to build on the momentum they have gained over the course of this year when Congress returns to its legislative work this week. Most of the retiree issues have been long in the making, but one -- tied to a proposed Medicare drug prescription benefit -- is new and, perhaps, more urgent.

The priority issue in the long-running category is "premium conversion." It allows federal employees -- but not retirees -- to pay their health insurance premiums with pretax money, saving more than $400 a year for the typical enrollee.

Retirees, who are not allowed to participate because of the tax code, have been working to get in on the premium conversion program since the benefit was started in 2000. Legislation to extend the benefit to retirees cleared the House civil service subcommittee in July, the first movement on that proposal since federal retirees took up the issue.

The National Association of Retired Federal Employees, which has lobbied heavily on the tax break, expects that the House Government Reform Committee, chaired by Rep. Thomas M. Davis III (R-Va.), will take up the premium conversion bill within weeks. Davis is an architect of the House bill, which has 289 co-sponsors.

The bill, however, is under the jurisdiction of the House Ways and Means Committee, which could prove to be a more formidable hurdle. The tax-writing committee could object to the plan not only because of its potential cost in lost tax revenue -- estimated at $7 billion over 10 years -- but also because of the precedent it would set for private-sector retirees to seek the same benefit, at a much higher cost.

NARFE is asking its members to call Rep. Bill Thomas (R-Calif.), the Ways and Means chairman, and urge him to get involved in the issue. NARFE, which has 400,000 dues-paying members, also is building alliances with postal and military coalitions in a bid to get the bill to the House floor, said Dan Adcock, NARFE's assistant legislative director.

A more pressing issue for retirees, however, may be legislation to add a prescription drug benefit to Medicare. The House and Senate have passed separate bills and are in negotiations over a compromise.

But NARFE fears that the government, like any other employer, could use the Medicare expansion as a reason to reduce or modify existing prescription drug benefits for retirees.

Most federal retirees continue in the Federal Employees Health Benefits Program, which provides a drug benefit, even after becoming eligible for Medicare. The current prescription drug benefits under FEHBP are generally considered more generous than those under consideration for Medicare.

On July 8, the House, at Davis's urging, quickly passed a bill to guarantee that federal retirees would continue to get the same prescription drug benefits as active employees. Since then, NARFE has been urging senators to take up similar legislation suggested by Sen. Daniel K. Akaka (D-Hawaii). Sens. Susan M. Collins (R-Maine), Joseph I. Lieberman (D-Conn.) and Peter Fitzgerald (R-Ill.) will play important roles on the issue for federal retirees.

The congressional maneuvers will come as the Labor Department prepares to calculate the next cost-of-living adjustment for federal annuities. In mid-October, the government will announce the adjustment to be paid in January, based on an inflation index covering the previous 12 months.

Preliminary estimates indicate the COLA probably will be in the 2 percent range. That will not be much comfort to many retirees, who are bracing for a possible sharp increase in their health insurance costs. The new FEHBP premiums will be announced later this month.


Dianne Tatham Kaskey, director of operations, warfare systems engineering, at the Naval Sea Systems Command, retires Sept. 3 after 33 years of federal service. She began her career with the FBI as a secretary.

Taylor Vinson, senior attorney at the National Highway Traffic Safety Administration, retires Sept. 3 after more than 36 years of federal service. He is the agency's longest serving employee and, among many accomplishments, was responsible for writing standards for motorcycles, vehicle lighting and vehicle importation.

Betty F. Davis, executive assistant to the president of the Inter-American Foundation, retired March 31 after 42 years of government service.

Stephen Barr's e-mail address is


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