Health care premiums for federal employees will increase by an average of 8.7 percent

Health care program premiums for federal employees and retirees will increase an average of 8.7 percent in 2023, the largest increase in more than a decade, the government said Friday.

This change in federal employee health benefit program premiums is significantly larger than the average increase of 3.8 percent for 2022, though closer to the 5-7 percent range than most other recent years.

The cost increase reflects rising prices for some drugs and higher use of professional services and outpatient treatment, the Office of Personnel Management said. “This is consistent with the larger market and reflects the impact of the COVID pandemic,” OPM said.

The program is open to nearly all federal employees and retirees who were covered continuously for five years before leaving the job; it has more than 4 million enrollees and about an equal number of covered spouses and children under 26, making it the nation’s largest employer-sponsored health insurance program.

“These premium increases may be similar to those expected from other large private sector employers, but they will still come as a shock to federal employees,” said the president of the National Treasury Employees Union, Tony Riordan.

The FEHBP will have 271 participating plans in 2023, about the same as now, with the vast majority only available regionally.

For 2023, there will be expanded benefits for maternal care, medical foods, anti-obesity drugs, assisted reproductive technology and gender-affirming care and services, OPM said. The program will also continue changes related to the pandemic, including expanded telehealth services and coverage of vaccines, tests and therapies.

About two-thirds of federal health care enrollees are in one of three national plans offered by Blue Cross Blue Shield. In the largest of these, the “Basic” plan, employee costs increase by $6.49 every two weeks to $86.67 for self-coverage alone; with $21.77 to $217.90 for yourself plus one; and by $25.62 to $237.91 for family coverage. Pensioners pay the same rates but on a monthly basis rather than fortnightly.

During the open enrollment season, from November 14 to December 12, enrollees will be able to change their plans. Also, employees who are not currently enrolled can join the programs, but retirees cannot enroll recently.

Organizations representing federal employees and retirees condemned the increases and urged enrollees to use the opportunity to comparison shop for their coverage in 2023.

“This will be the largest increase in FEHB premiums since 2011 and comes as enrollees must contend with high inflation everywhere,” National Association of Active and Retired Federal Employees President Ken Thomas said in a statement.

Everett Kelly, president of the American Federation of Public Employees, added: “If the government continues to squeeze federal employees into a vice of low pay on one hand and out-of-control health care costs on the other, we will continue to see widespread staffing crises and the attendant complications as the government struggles to recruit and retain talented employees who can get a better deal in the private sector.”

Federal officials expect a January hike of 4.6 percent on average, with some variation by location. Federal retirees are due to receive a cost-of-living adjustment that has yet to be determined, but will likely be within the range of the FEHBP premium increase as it reflects general inflationary trends.

Meanwhile, OPM announced that premiums will be slightly changed in a separate program, the Federal Dental and Vision Insurance Program, where enrollees pay the full cost.

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