Early Briefing: More Sticker Shock

It's not enough that we have this credit crisis roiling the markets -- and our 401ks -- now we learn that health insurance costs are likely to spike next year.

Federal Diary columnist Joe Davidson writes that health insurance premiums for federal employees will jump almost 8 percent, on average, in 2009, a sharp increase over the 2.9 percent increase this year and the 2.3 percent increase in 2007.

Premiums for most workers, however, will climb even more next year -- about 13 percent -- which is the increase for enrollees in the Blue Cross and Blue Shield plans. Sixty percent of federal workers are enrolled in one of the Blue Cross and Blue Shield plans.

An Office of Personnel Management statement said the government uses "firm negotiation with the health carriers to keep cost increases as reasonable as possible."

That's scary news for the rest of us since the government should be able to strike attractive deals give the size of the federal workforce.

"It is very discouraging to see average increases of this magnitude," Colleen M. Kelley, president of the National Treasury Employees Union, told Davidson, "particularly given the bargaining power OPM should be able to exercise as manager of the nation's largest group health plan."

In others news:

* Shareholders of Wm. Wrigley Jr. Co. have approved the company's $23 billion sale to McLean-based Mars, a move that will end more than a century of family control as the chewing-gum company becomes part of what will now be the world's largest candy maker.

The deal, expected to be finalized around Oct. 6, joins the company that makes gums like Juicy Fruit and Big Red with the privately held maker of M&Ms, Snickers and Skittles, bumping Britain's Cadbury from the top candy-making slot.

*Virginia Commerce Bancorp,, the Arlington parent company of Virginia Commerce Bank, said it has raised $25 million in capital through the sale of trust preferred securities to the company's directors and executive officers. The company also issued warrants to purchase an aggregate of 1.5 million shares of common stock to the purchasers. The transaction was completed on Wednesday.

"Virginia Commerce expects to raise an additional $25 million in capital through a private offering of equity instruments by the end of October and will make an announcement upon final determination of structure and terms," the bank said in a statement.

* Rockville's Washington Real Estate Investment Trust said it plans to offer 1.5 million common shares through a new public offering. WRIT expects to grant the underwriters a 30-day option to purchase an additional 225,000 common shares.

"The net proceeds of this offering will be used for an anticipated property acquisition, to repay borrowings outstanding under WRIT's lines of credit, and for general corporate purposes," the company said in a statement.

WRIT is a equity real estate investment trust investing in 92 properties throughtout the greater Washington metro region, including retail centers. office buildings, and multifamily projects.

By Dan Beyers  |  September 26, 2008; 8:13 AM ET
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Please email us to report offensive comments.

so I have a question about the increase in employee share of health care insurance costs. does this reflect increases in premium costs, or a decrease in the employer share of these costs?

Posted by: jen | September 26, 2008 8:58 AM

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