Federal workers and retirees locked into insurance plans that cost more and cover less may be able to shop around for better coverage this spring.
The Office of Personnel Management is expected to announce soon it will hold hearings later this month on the issue of whether to hold a three-week open season in May.
Health insurance premiums for federal workers and retirees went up an average of more than 30 percent in January. Insurance companies also instituted government-ordered 16 percent benefit cutbacks despite objections of unions and many of the 126 carriers in the Federal Employes Health Benefits (FEHB) program.
OPM, which manages the giant health system covering 9.2 million people--including nearly half the population of metropolitan Washington--canceled the open season enrollment that was supposed to be held last November. OPM said uncertainty over rates and benefits (because of then-pending court battles) made it impossible to print and distribute brochures in time for subscribers to select 1982 health insurance plans.
Because the open season was scrubbed, everybody in the health program was--and still is--stuck in the same plan they had for 1981, even though rates are up, coverage in many areas is down or was eliminated and some plans have doubled deductibles.
OPM is expected to announce in the Federal Register that administrative hearings will be held Feb. 17-18 on the open season question.
Most people who are paying premiums are anxious for an open shopping period. But many of the health insurance carriers dread the thought of an open season.
Officials of Blue Cross/Blue Shield, which covers six of every 10 federal workers, are particularly nervous about an open season.
The Blue Cross/Blue Shield plan is popular with so-called "heavy users," an insurance term for retirees who have more medical problems than the general work population and persons (or family members) who are undergoing expensive treatment for mental health problems.
Blue Cross/Blue Shield and other carriers fear "adverse selection" if there is an open season. Adverse selection means that heavy users come into the plan or stay in it, and those who pay more in premiums than they get back in benefits move over to less-costly plans. Late last year, some Blue Cross/Blue Shield officials hinted that they might decide to pull out of the FEHB if there were an open season.
Premiums for the high-option family plan, the most popular option offered by Blue Cross/Blue Shield, jumped $11.25 biweekly (to $41.77) for employes. Retirees who pay on a monthly basis were hit by a $24.36 rise, to $90.49 deducted from each annuity check. Premium contributions from the government also rose this year.
During past open seasons fewer than 6 percent of all subscribers switched plans. But that number could jump dramatically--because of near-record premium hikes and benefit reductions--when the next open season comes along.