TOPICS
TOPICS
Federal health insurance premiums to rise by 7.9 percent
The average health insurance premium for the Federal Employees Health Benefits Program will go up by 7.9 percent in 2005, the Office of Personnel Management announced Monday.
OPM officials noted that the increase broke a four-year trend of premium increases of more than 10 percent. The FEHBP provides health insurance to federal workers, retirees and dependents, and has 2.2 million active employees, 1.8 million retirees and 4 million dependents enrolled.
OPM Director Kay Coles James called the new figures "a significant downward shift in this unwelcome trend."
"We've broken through the double-digit increase barrier," James said. "We are encouraged but, as I've said, not satisfied."
From 2001 to 2003, the FEHBP posted premium increases of 10.5 percent, 13.3 percent and 11.1 percent. For 2004, the increase was projected to be 10.6 percent but fell slightly below 10 percent.
"We were in single digits last year, we just didn't know it," said Nancy Kichak, OPM's chief actuary.
During the past four years, the FEHBP average increases have been below health insurance industry levels, according to OPM.
OPM officials gave a number of reasons for the lower than usual increase and said that despite the news, insurance rates are still climbing.
"It was not accomplished by reducing benefits," said Abby Block, OPM's deputy associate director for employee and family support policy.
Kichak noted that FEHBP members are using outpatient care at a slower rate. Block said the cost of prescription drugs and medical visits has not been climbing as rapidly as usual.
"The big drivers have both moderated," she said.
James attributed the 7.9 percent increase in premium costs to the work of OPM personnel.
"Excellent team, excellent policy, tough negotiators," she said.
Premiums for single employee health plans will rise by an average of $4.32 biweekly, according to James. For family plans, the biweekly premium is set to rise by an average of $9.99.
OPM officials stressed that the numbers they presented are averages and while some will see their premiums drop, many federal employees will see them rise at a higher rate.
COMMENTS
- So, if all you Kerry/Edwards supporters are justifying malpractice lawsuits, then why are you whining about the increased rate of health insurance premiums? This "team" wants socialized medicine anyway. Just think, with Big Brother providing your health care, there will be no more lawsuits. What do they care? Edwards has already made his fortune. GovExec.com reader Posted October 6, 2004 1:51 PM
- The insurance industry has fooled us into believing that patients who file medical malpractice lawsuits are being awarded more and more money, leading to unbearably high losses for insurers. Insurers state that to recoup money paid to patients, medical malpractice insurers are being forced to raise insurance rates or, in some cases, pull out of the market altogether. Since insurers say that jury verdicts are the cause for the current “crisis” in affordable malpractice insurance for doctors, the insurance industry insists that the only way to bring down insurance rates is to limit an injured consumer’s ability to sue in court. This is nothing new. Insurance rates for doctors have skyrocketed twice before: in the mid-1970s and in the mid-1980s, each “crisis” occurring during years of a weakened economy and dropping interest rates. Each of these periods were followed by a wave of legislative activity to restrict injured patients’ rights to sue for medical malpractice. Medical and insurance lobbyists told legislators that changes in tort law were needed to reduce medical malpractice insurance rates. One of the first states to react to this third wave of insurance “crisis” for doctors has been Nevada. At the end of July 2002, Nevada enacted a $350,000 cap on non-economic damages for injured patients. Within weeks of the law’s enactment, two major insurance companies announced that despite the new law, they would not reduce insurance rates for the foreseeable future. Quite simply, this is because the legal system is largely irrelevant to the problem. Insurers make most of their profits from investment income. During years of high interest rates and/or excellent insurer profits, insurance companies engage in fierce competition for premium dollars to invest for maximum return. Insurers severely underprice their policies and insure very poor risks just to get premium dollars to invest. But when investment income decreases — because interest rates drop or the stock market plummets or the cumulative price cuts make profits become unbearably low — the industry responds by sharply increasing premiums and reducing coverage, thus creating a “liability insurance crisis.” GovExec.com reader Posted September 22, 2004 2:38 PM
- I don't know about anyone else, but I personally know 3 doctors that have left the medical profession over the cost of malpractice insurance - 2 OB/Gyn's and a surgeon. None has ever been sued, but no doctor is perfect and "the worst doctors" are not the only ones that lose a patient. The average cost of malpractice insurance for these was over $100K and it became too much for them to pass on these costs to every patient. You hear about the healthcare crisis in this nation? It's the blankety-blank trial lawyers convincing juries that the loss of life for a middle-aged, minimum-wage worker through potential oversight of some technical procedure warrants a $15 Million settlement. Loss of life is a tragedy nearly always, loss of life-function is as well. But these ridiculous settlements have led to far more problems. For those that back the trial-lawyers as supportable entrepreneurs, a question: There are many, many doctors that have been forced out of practice by the lawyers. How many lawyers have you heard of that were forced out of practice by doctors? GovExec.com reader Posted September 22, 2004 9:07 AM
