Health plans to drop 135,000 federal workers and retirees

Thousands of federal workers and retirees must choose new health care coverage for next year because their health insurance companies are dropping them, the Office of Personnel Management announced Friday.

In all, 137,488 federal workers and retirees are being dropped, either because health maintenance organizations are dropping out of the Federal Employees Health Benefits Program (FEHPB) or because large carriers have chosen to pull out of certain markets. Aetna U.S. Healthcare is dropping 52,475 federal enrollees in 18 areas across the country, and Prudential is dropping 15,824 enrollees in five areas.

Twenty-eight HMOs are dropping out of the FEHBP. The George Washington University Health Plan, is going out of business, leaving 16,115 federal enrollees in the Washington area without coverage as of the beginning of next year. Free State Health Plan, which is also going out of business, is dropping 10,411 enrollees.

Profitability and low enrollment are the main reasons that insurance carriers are dropping out of the federal health plan, according to OPM officials. The federal health plan covers 9 million federal workers, retirees and dependents.

Four years ago, 350 health plans operated in the FEHBP. In 2002, 180 plans will participate in the program. However, choice varies from state to state. Because of the health plan dropouts, federal employees in Delaware will not have an HMO available. Only one HMO will be available in Guam, Mississippi, North Carolina, North Dakota, Panama, Puerto Rico, Rhode Island, South Carolina, Utah, West Virginia and Wyoming. North Carolina will go from five HMOs this year to one next year.

Five new plans will be offered in 2002: Vantage Health Plan in Shreveport and Monroe, La.; Avera Health Plan in South Dakota; Sioux Valley Health Plan in South Dakota; Healthnet HMO in Tennessee; and WINHealth Partners in Wyoming.

Federal enrollees will be able to pick new health plans during the FEHBP open season that runs Nov. 12 to Dec. 10.

Plans Dropping Enrollees