Federal Employee Health Care Costs to Jump 8.8%
Updated 7:17 p.m. ET
Federal government employees enrolled in the Federal Employees Health Benefits Program will pay an average 8.8 percent more in health-care costs in 2010, according to figures released Tuesday by the Office of Personnel Management.
The increase equals an average $5.98 increase per pay check for someone with individual health-care coverage, and an average $12.87 increase for employees whose plans cover families, OPM said. The enrollee increase compares to a 7.9 percent jump in 2009 and a 2.9 percent increase in 2008, according to OPM.
"An 8.8 percent increase is not an increase that we feel comfortable with," OPM Associate Director Nancy Kichak told reporters. "It’s not one that we would like to see our enrollees bear, but unfortunately we’re a victim of the market."
FEHBP provides coverage to almost 8 million people, with 4,063,684 current and former employees currently enrolled, OPM said.
The combined cost to employees and the government will increase 7.4 percent, compared with 7 percent in 2009, Kichak said. The government contributes approximately 70 percent of the total cost of a plan’s premium. All full- and part-time employees of the executive, judicial and legislative branches and the Postal Service are eligible to enroll in FEHBP.
Employees' dental plan costs will also climb 4.2 percent, and vision care will increase 2.4 percent. Currently there are more than 800,000 contracts in the dental program and about 600,000 in the vision program, according to OPM.
"We think this shows that health-care reform is necessary," Kichak said in response to a question about how FEHBP increases reflect on the ongoing health-care reform debate.
"We feel that universal coverage is important," she said, adding later that, "The only way to get health-care costs under control is to get everybody covered so that they can have the best and most effective care."
"We have a very good program and we know that our members rely on it, but it is subject to what’s going on in the health-care market."
Kichak did not comment on a proposal by Sen. Charles E. Grassley (R-Iowa) to eliminate FEHBP, saying, "We right now are focused on taking care of our business and our folks who are covered. We’re not following that debate." That effort is not expected to succeed.
Kichak also expressed OPM's concern that roughly 60 percent of enrollees are covered by Blue Cross Blue Shield.
“It’s not concern that Blue Cross is not delivering services. They wouldn’t have as high an enrollment if they weren’t providing good service," she said. "We’d just prefer that there were additional options that people would want to purchase.”
Blue Cross Blue Shield rates will increase 15 percent for self-only coverage and 12 percent for family coverage, the company said. Enrollees will have to pay higher costs thanks to a wider range of benefits and the company's wide network of providers, said Jena Estes, vice president of Blue Cross Blue Shield's federal employee program. The average age of program participants is 62, a slightly older pool of participants that require more complex medical care.
"That tends to drive the cost up," Estes said. Despite the price increase, Blue Cross enjoys a 97 percent retention rate among participants and plans to launch more wellness programs next year to promote healthy living.
"We have a very strong commitment to managing the costs and managing that trend. You’ll see a real strong focus on coordinating the care and managing the total care," Estes said.
National Treasury Employees Union President Colleen M. Kelley expressed general disappointment with rate increases, but especially with the Blue Cross costs.
“This is an enormous increase that erodes federal employees’ standard of living,” Kelley said in a statement. “Affordable health care is essential in attracting and retaining a stable, high-quality workforce.”
“FEHBP is getting more and more unaffordable for more people," said Jacqueline Simon, public policy director for the American Federation of Government Employees. She also expressed concern for employees covered by Blue Cross Blue Shield, noting the government will cover only 67 percent of those premiums.
"We just always want to emphasize that FEHBP shouldn't be a model for anything except for what not to do," Simon said. She spoke after a forum hosted by the House Oversight and Government Reform Committee on Tuesday to discuss FEHBP’s drug benefit.
Margaret Baptiste, president of the National Active and Retired Federal Employees Association, said the ability of federal retirees to pay their daily living expenses "will be seriously compromised by shouldering a premium increase of over 12 percent" in the Blue Cross plan.
As The Post's Joe Davidson recently reported, AFGE estimates that roughly 250,000 federal workers cannot afford health-care coverage. OPM statistics indicate 11 percent of the roughly 2 million civilian federal employees do not participate in FEHBP, but likely have insurance through a spouse.
FEHBP open enrollment runs from Nov. 9 to Dec. 14. Employees who like their current health care coverage do nothing, but those looking to make changes must do so during open enrollment. Employees with dental or vision plans should visit BeneFeds.com while employees with flexible spending accounts or those interested in opening an account can visit FSAFeds.com.
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| September 29, 2009; 3:28 PM ET
Categories: Health Care, Workplace Issues
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