By Joe Davidson
Friday, September 26, 2008
Health insurance premiums for federal employees will jump almost 8 percent, on average, in 2009, a sharp increase over the 2.9 percent increase this year and the 2.3 percent increase in 2007, the Office of Personnel Management announced yesterday.
Premiums for most workers, however, will climb even more next year -- about 13 percent -- which is the increase for enrollees in the Blue Cross and Blue Shield plans. Sixty percent of federal workers are enrolled in one of the Blue Cross and Blue Shield plans.
"We worked very hard to contain premium costs, and we were more successful with some health plans than with others," said Nancy Kichak, OPM's associate director for strategic human resources policy. The rates, she said, are the lowest possible in keeping with preservation of benefits and stability in the program.
She blamed next year's steep increase on "the cost of services" and previous estimates on health-care costs that were too low. She cited utilization of services, technology and medical inflation as contributing to the increase. "It's important for employees to shop around," Kichak said.
An OPM statement said the agency uses "firm negotiation with the health carriers to keep cost increases as reasonable as possible."
Colleen M. Kelley, president of the National Treasury Employees Union, was not impressed. "It is very discouraging to see average increases of this magnitude," she said, "particularly given the bargaining power OPM should be able to exercise as manager of the nation's largest group health plan."
The OPM wasn't successful in keeping costs down with Blue Cross and Blue Shield, the 800-pound gorilla in the field. Out-of-pocket biweekly premiums for those with the standard option will rise to $70.18 for self-coverage and $164.58 for families. Basic coverage is cheaper: $42.66 for self and $99.91 for families.
Jena Estes, vice president of federal employment programs for the Blue Cross and Blue Shield Association, blamed a relatively slow shift to generic drugs by enrollees as one reason its increases are higher than average.
As a result, she said, Blue Cross and Blue Shield will offer generic incentives, including a small discount for the purchase of generics at pharmacies. Also, those who order generic maintenance drugs by mail will get the first four orders free. If each order is a three-month supply, as is often the case, four free orders would cover the amount needed for one year.
There are 269 health-plan options, although some are limited by region or employee group, covering 8 million federal workers, retirees and dependents. Open season, when employees will be able to change their health insurance selections, runs from Nov. 10 to Dec. 8.
On average, enrollees with family coverage will pay an extra $11.12 out of pocket at each biweekly pay period next year, or $4.83 for those with individual coverage. Those amounts represent about 30 percent of the plan's total cost. The government picks up the remaining 70 percent.
"These premium increases keep eating into the wallets of federal employees. Something has to be done to keep these increases in check," said Richard N. Brown, president of the National Federation of Federal Employees. "It's difficult enough as it is for government agencies to recruit and retain quality workers. This increase is only going to make the problem worse."
One thing many employees will get for their money next year is hearing benefits, including hearing aids, for adults, following the improvement in hearing coverage for children this year.
The dental and vision programs have shown significant growth. Enrollment in dental coverage grew 48 percent this year over last, and the vision program increased 41 percent.
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