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Federal Employee Health Care Costs to Jump 8.8%

By Ed O'Keefe

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 while employees with flexible spending accounts or those interested in opening an account can visit

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By Ed O'Keefe  | September 29, 2009; 3:28 PM ET
Categories:  Health Care, Workplace Issues  
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It is a good thing that the Federal
government is so large that it can negotiate such low rates for its employees. Oh wait...

Posted by: MikeL4 | September 29, 2009 3:54 PM | Report abuse

The increase is not going to hurt current employees because of the "cost of living" raise they will receive in January. It is going to hurt retirees because there will be no cost of living increase for them.

Posted by: mortified469 | September 29, 2009 5:16 PM | Report abuse

I thought we were in a deflationary cycle?

Posted by: garrafa10 | September 29, 2009 5:22 PM | Report abuse

"We feel that universal coverage is important. The only way to get health-care costs under control is to get everybody covered..." Does that person understand what they are saying or are they just parroting political slogans?

Posted by: kwar70777 | September 29, 2009 5:30 PM | Report abuse

Were the rates raised by this administration so the OPM Spokesperson could say that the rate hike demonstrates the need for healthcare reform? I've noticed whatever goes on in the world we are told by this administration that the events we are seeing support White House views. Whatever anyone says to oppose White House views are labeled "lies" by the DNC. I happen to think that everyone is entitled to an opinion and I will support anyone's right to express opinions. What I deplore is the DNC calling the president's opposition "liars". Coming from the president's party, such a statement would appear to have a chilling effect on free speech.

Ask Obama what that means. He was a great Constitutional scholar, I understand. Ask him what a chilling effect on free speech might be. Let's see, if the politial party in power in Iran were to call people who support Americans "liars" for expressing their pro-U.S. opinions, would that not have a chilling effect on Iranian free speech?

Posted by: eyemakeupneeded1 | September 29, 2009 5:52 PM | Report abuse

So why is anyone surprised that our new paternalistic government permits a large increase in FEHB?. Could it be part of the administration's strategy to force everyone into a "cheaper" government-run plan financed by all the taxpayers? And why are the providers falling into the trap and taking this shortsighted grab for higher premiums? Is it because they recognize a Government-backed plan will ultimately push them all out of business, so its better to get what they can now?

Posted by: leberk | September 29, 2009 6:03 PM | Report abuse

Exactly what do government workers do?

It seems they are of no value yet we pay them and President ACORN and the Democrat Socialist Party insist on expanding the number of them.

mmm mmm mmm Barack Hussein Obama

Posted by: charlietuna666 | September 29, 2009 6:59 PM | Report abuse

I said from the very beginning that the Democrats should wait to start on health care until after the November "open enrollment" period when most workers get notified of changes and increases. No matter what anyone says, people won't be able to keep the plans they have because employers simply won't offer the same plans in 2 or 3 years.

Anyone who thinks that the increase is some sort of ploy by the administration has clearly not paid any attention to this problem until now. As the article noted, employee contributions went up by an average of 7.9% during Bush's last year.

Major employers have been saying for years that the current model is unsustainable. According to an article published just 2 weeks ago in the Washington post, we can expect premiums to increase by 166% in the next decade unless there are some fundamental changes.

Posted by: Athena_news | September 29, 2009 8:11 PM | Report abuse

As a taxpayer without health insurance, I resent having to help buy health insurance for Federal employees in the executive, legislative, and judicial branches of government. I pay for my Senators and Congressmen and they continue to tolerate business practices that shut me out of the health care system. Talk about a basis for a Tea Party!

Posted by: KateSaunders | September 30, 2009 11:35 AM | Report abuse

What are you guys crying about, here in Connecticut, I'm paying $1200 a month with a $5000 deductible (no health issues in my family, yet). My kids caught the flu, the school requested testing for H1N1, it cost me $245 per kid, $735 just to tell me to keep the kids home. My broker is telling me that I might be looking at a possible 35% increase and because of the insurance companies and their lobbyists in our state, small business can not pool together to get a reduced rate. I'm moving down with you guys, I'll take 9% anytime...

Posted by: redspock | September 30, 2009 4:03 PM | Report abuse

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