OPM cited the increased use of healthcare services as the reason for the higher costs.

OPM cited the increased use of healthcare services as the reason for the higher costs. the_burtons/Getty Images

Union Chief Slams ‘Remarkably High’ Increase in Health Care Premiums

AFGE President Everett Kelly forecasts higher premiums may worsen the “widespread staffing crises.”

Insurance premiums for the Federal Employee Health Benefits Program will jump an average of 8.7% in 2023, the largest increase in more than a decade. When OPM released the new rates last week, agency officials cited the increased use of healthcare services as the reason for the higher costs.

Following the announcement, Everett Kelly, president of the American Federation of Government Employees, strongly condemned the projected cost increases, noting they could exacerbate “widespread staffing crises.”

“Among the largest, most popular plans, rates are going up even faster,” Kelly stated in a press release. “For a single employee on the popular Blue Cross/Blue Shield Standard plan, that employee will see an 11.7% increase. If that employee has a family, they’ll see their premium go up by 10.7% this year."

The increased premiums paired with “years of paltry pay increases” could push current and prospective federal workers to the private sector, where they can be paid more, Kelly stated, also citing a study by the Federal Salary Council that showed federal employees’ pay lags 22.47% behind employees in the private sector.

"If the government continues to squeeze federal employees in a vice with low pay on one side and out-of-control health care costs on the other, we will continue to see widespread staffing crises and the attendant complications as government struggles to recruit and retain talented employees who can get a better deal in the private sector," Kelly stated.

In a media release, Ken Thomas, national president of the National Active and Retired Federal Employees, also expressed disappointment in the increases.

“I have no doubt that federal retirees and employees will react to today’s announcement with disappointment and concern,” Thomas stated. “This will be the highest increase in FEHB premiums since 2011, and it comes as enrollees must deal with high inflation across the board.”

Thomas suggested that FEHB enrollees should comparison shop and try to make changes during Open Season, the annual period during which eligible federal employees, retirees, and survivors can make changes to their health care plans for the following year. Open Season runs from Nov. 14 through Dec. 12. 

“One of the most valuable features of FEHB is its broad array of plan options. That’s why NARFE encourages all participants to thoroughly review the plans so they may select the one  that best fits their needs,” Thomas said. “For retirees, many plans already offer Medicare Part B premium reimbursement, and seven more will add this option for 2023. That may help annuitants looking for coverage that meets their needs and fits their budgets.”