Office of personnel management estimates premiums for Federal employees will increase by 8% in 2009

Sep 29 2008

The Office of Personnel Management on Thursday announced that federal employees in 2009 will have to pay on average about 8% more for their health insurance premiums, the Washington Post reports. The projected increase is significantly higher than the 2.9% increase in 2008 and the 2.3% increase in 2007.

According to the Post, there are about eight million federal employees, retirees and dependents who have about 269 health plans from which to choose, most of which are limited by region or employee groups. The about 60% of federal employees who are enrolled in Blue Cross and Blue Shield plans will on average experience a 13% increase in premium rates, according to the Post.

Federal workers enrolled in individual coverage, on average, will pay $4.83 more per biweekly pay period and those enrolled in family coverage will pay $11.12 more per pay period.

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Nancy Kichak, associate director for strategic human resources policy at OPM, said that the agency tried to keep premium rates as low as possible to maintain employee benefits and the stability of its health insurance program. Kichak said, "We worked very hard to contain premium costs, and we were more successful with some health plans than with others." She cited "the cost of services" and higher-than-expected health care costs for next year's large increase. She added that utilization of health care services, technology and medical inflation also were contributing factors.

Jena Estes, vice president of federal employment programs for BCBS, said that the rise in costs in part was because of a relatively slow shift among its members to cheaper generic medications. Estes said that BCBS would begin to offer incentives, such as pharmacy discounts and mail-order benefits, to encourage more members to use generic drugs.

Colleen Kelley, president of the National Treasury Employees Union, said, "It is very discouraging to see average increases of this magnitude ... particularly given the bargaining power OPM should be able to exercise as manager of the nation's largest group health plan" (Davidson, Washington Post, 9/26).