Higher 1984 health insurance premiums for federal workers and retirees--who already pay from $300 to $1,400 a year for coverage--will eat up much of the 3.5-4 percent raise employes are scheduled to receive in January.
The Office of Management and Budget is expected to announce later this week that premiums for federal workers' health insurance premiums--a program that covers well over a million people in the Washington area--will go up 18 to 25 percent in January.
In the preceding two years, premiums paid by federal workers for health insurance went up 56 percent.
Insiders predict that the price tag for some plans in the program--which covers 10 million people nationwide--will nearly double next year.
In addition to higher premiums for most plans, benefits under many plans will be cut. Some plans, under orders from the Office of Personnel Management, will increase deductibles for treatment of mental and nervous disorders.
At least one plan will have a $500 deductible, meaning that individuals will have to pay $500 out of pocket for mental health care before their policies begin to pay benefits.
Some plans will have a big premium jump because their costs went up last year after many retirees joined during two open enrollment periods.
Federal employes and retirees have an open enrollment period in late November and early December when they can pick next year's health policies from among more than 100 carriers.
The government picks up between 40 percent and 75 percent of the premiums, depending upon which plan the employe chooses. Legislation is pending in the House that would raise the federal contribution to about 75 percent; a Senate version would raise the federal share to 70 percent.
The administration wants to give its workers and retirees a voucher at the beginning of each year to purchase health insurance. If the premiums were less than the amount of the voucher, workers could keep the difference.
An article yesterday about higher health insurance premiums for federal workers incorrectly referred to the Office of Personnel Management as the Office of Management and Budget.