Premiums in the health insurance program for federal employees and retirees will rise by just under 4 percent on average in 2013, although rates will hold virtually steady in the largest plan, government officials said Thursday.
Federal Employees Health Benefits Program premiums will rise 3.4 percent on average, the Office of Personnel announced. Because of the way the cost is split between enrollees and the government, the average enrollee share is to rise 3.7 percent while the government share is rising 3.3 percent on average.
That will result in an average $2.75 increase per two-week pay period for the enrollee for self-only coverage and $6.39 for family coverage.
There will be “no significant benefit changes,” said John O’Brien, OPM director of healthcare and insurance, although coverage for certain preventive care screenings for women, and for certain clinical trials will be added as required by the 2010 health insurance reform law. Deductibles, co-payments and other out-of-pocket costs also will remain about the same overall, with some changes within plans.
The annual open season for starting or changing enrollment will run from Nov. 12 through Dec. 10.
There will be 230 participating plans in the FEHBP during 2013, up from the current 206, all but 13 of them health maintenance organization plans available only in a local area. One of the national plans, Blue Cross-Blue Shield, accounts for about 62 percent of the 8.2 million covered employees, retirees and family members.
Premiums for the larger of the two Blue Cross options, the standard option, are rising by 33 cents biweekly or 0.4 percent, for self-only coverage, and by $1.66 or 0.8 percent, for family coverage.
The 3.4 percent overall average premium increase is slightly below the 3.8 percent average that was determined last fall for 2012 rates, and also a bit below health industry projections of average increases in other employer-sponsored plans for 2013 that fall in the 4-6 percent range, O’Brien said.
“We are fortunate that trends for health care costs are moderate, and we benefit from that,” he said. Movement of enrollees overall toward lower-cost plans tends to result in actual average premium increases being lower than projected, he added.
General inflation in medical costs, the aging of the covered population and minor benefit changes drove the premium increases, O’Brien said. Premiums would have been higher except that plan reserves are being drawn down somewhat because lower than expected claims in past years brought those reserves above target levels, he said.
Also helping hold down premium increases were initiatives to hold down prescription drug costs by encouraging the use of generics, and wellness initiatives, he and other OPM officials said.
“While this increase is below the averages facing private sector workers, higher premiums are difficult to absorb in these tough economic times,” said Colleen M. Kelley, president of the National Treasury Employees Union. “Any increase is hard for federal employees given the freeze on federal pay.”
“FEHBP premiums increased by an average of 7 percent in 2011 and 3.8 percent in 2012 while federal pay did not increase at all, due to the freeze,” said American Federation of Government Employees president J. David Cox. “Congress and the administration have decided to turn the federal workforce into a ‘fixed income’ population that simply cannot afford another cent toward already inflated FEHBP premiums,” said Cox, who called for a freeze on premiums.
Active employees are eligible to pay FEHBP premiums with pre-tax money. Retirees pay at the same premium rates, although they are not eligible for that “premium conversion” tax break. U.S. Postal Service employees pay slightly lower premiums under union contracts.
OPM meanwhile announced that premium rates will remain virtually unchanged in 2013 in the Federal Dental and Vision Insurance Program, which offers vision or dental coverage separate from the FEHBP. Enrollees receive no government contribution toward those premiums.