Federal employees’ health premiums to rise up to 20 percent

Federal employees will pay up to 20 percent more for health coverage next year, the Office of Personnel Management announced Friday. The average increase for premiums will be 13.3 percent, OPM said. Employees with self-only coverage will pay an average of 11.8 percent more. Employees with family coverage will pay an average of 14.4 percent more. Employees in Blue Cross/Blue Shield's service benefit plan, which covers half of the enrollees in the Federal Employees Health Benefits Program, will see even higher hikes in premiums. People with standard self-only coverage will pay 20 percent more in premiums next year. People with standard family coverage will pay 17.2 percent more. OPM officials said the premium hikes, the highest since the late 1980s, stem from the aging of the federal workforce, more costly medical technology, rising prescription drug costs and an increased use of medical services. Those trends have pushed federal health insurance premiums up nearly 50 percent over the past four years. William Flynn, OPM associate director for retirement and insurance, said the increases are unacceptable, but noted that health insurance costs for all private and public sector employers are rising. The California Public Employees Health Plan, for example, will have an average premium increase of 15 percent in 2002. But Jacque Simon, public policy director at the American Federation of Government Employees (AFGE), said OPM officials should have been tougher in negotiating with health insurance carriers. "They totally capitulate," Simon said. AFGE officials also criticized OPM for preventing the union from representing employee interests during contract negotiations. "The need for federal employees-those who pay 30 percent of the bill for FEHBP-to have a seat at the table at the annual 'negotiations' between OPM and the insurance companies has never been clearer or more acute," AFGE President Bobby Harnage said in a statement. Flynn argued that under carriers' initial proposals, premiums would have increased 15.9 percent on average, instead of 13.3 percent. OPM negotiations brought the premiums down, he said. "There is no basis to say OPM is not tough enough," Flynn said. While five new health plans will join the federal program next year, 28 health maintenance organizations are dropping out, and Aetna, Prudential and other carriers are dropping coverage in certain areas. About 135,000 enrollees will be forced to pick new plans. Low enrollment and profitability contributed to the dropouts, OPM officials said. There will be 180 health plan options in the federal program next year, down from about 350 in 1998. Federal employees will be able to change health plans or coverage options during an open season Nov. 12 to Dec. 10. To see what your health plan will be charging next year, see OPM's Web site.
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