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Federal employees' health insurance premiums will rise an average of 11.1 percent in 2003, the Office of Personnel Management announced Tuesday.

Government workers with self-only insurance coverage will pay an average of $4.45 more per pay period, or $116 a year. Workers with family coverage will pay an average of $10.21 more per pay period, or $265 a year.

The premium hike for 2003 is the third consecutive annual increase above 10 percent, but OPM Director Kay Coles James said the increase in the Federal Employees Health Benefits Program is one of the lowest in the nation. The California state employees' health insurance program is raising premiums by 20 percent to 25 percent, for example.

"Given the industry trends, our 11.1 percent increase is quite remarkable," James said.

The rising cost of prescription drugs, greater use of medical services, the cost of advanced technology and an aging workforce contributed to the increase.

Four new insurance plans are joining the FEHBP in 2003, while 11 are dropping out, bringing the total number of participating plans to 188, down from about 350 five years ago. The dropouts will force 27,461 enrollees to select new plans during FEHBP's open season.

During the open season, which runs from Nov. 11 to Dec. 9, federal employees and retirees will be able to change health insurance plans. Many plans have changed their benefits or premiums for 2003. The American Postal Workers Union, for example, is offering a new insurance option that gives enrollees a $1,000 credit to spend on medical services before they have to make any out-of-pocket payments.

James also announced that she had waived controversial cost accounting standards for FEHBP carriers. Blue Cross Blue Shield, which covers about 4 million federal employees, retirees and family members, threatened to pull out of the FEHBP if the company were forced to adopt the standards. Congress may remove a legislative waiver to the standards this year, but James' action protects the insurance carriers, basically eliminating the possibility that Blue Cross Blue Shield would pull out of the federal program.

OPM is also preparing to offer flexible spending accounts to federal employees beginning next summer. Money in the accounts could be used for health services not covered by standard insurance, such as certain dental and vision services.

OPM will post the 2003 premium rates on its Web site at www.opm.gov/insure/health.

COMMENTS

• The statement made by OPM Director Kay Coles James regarding the increase in the Federal Employees Health Benefits Program being one of the lowest in the nation is nothing but "feel good medicine" for the thousands of us that once again have to "swallow this pill." I believe her statement, "Given the industry trends, our 11.1 percent increase is quite remarkable," is right on. However, she should have finished the statement with, "it is absurd for health benefits to continue to increase at this rate." A 30-plus percent increase in the last three years? Give me a break! My cost of living adjustments, just to refresh everyone's memory, have increased less than one half that amount in the same three-year period. Is it just me, or is there a distinct pattern here? At this rate, in another four or five years, I won't be able to afford health benefits. Anonymous Posted February 24, 2003 4:32 PM
• The real question is: why hasn't the "allowable amounts" paid out by insurance companies increased? Coverage with benefits plans such as for mail-handlers seem to have remained relatively constant over the past 5 years or they've added additional coverage for services that the majority of plan participant's don't use or need. A classic example is the dental coverage. Out of $1,500 for a periodontic procedure, the plan covered less than $250...yet rates increase. What's wrong with this picture? Anonymous Posted February 24, 2003 4:31 PM
• These (increased medical premiums) approved by OPM seem to diminish any pay raise increase that federal workers receive at the beginning of the year. In the past three years these premiums have been double digit increases, yet the benefits coverage stays the same, or has reduced coverage. I do believe, that all federal workers have the option to choose the carrier that they prefer, but there are contingencies. If switching were an option, more and more employees would continue to shift on a regular basis. However, several carriers will not cover pre-existing conditions covered by the previous carrier. So we are stuck with the carrier we are enrolled with. Anonymous Posted February 24, 2003 4:31 PM