U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

FEHBP Premiums Rise Less Than National Average

Premiums in the Federal Employees Health Benefits Program will increase by an average 11 percent in 2003 (10.5 percent for fee-for-service plans and 13.6 percent for HMOs). The Program's average premium increases are less than the national norm. Aggressive actions on the part of the U.S. Office of Personnel Management, have helped hold the line on costs while maintaining quality. Studies predict that health care premiums may increase as much as 20 percent nationally.

The FEHB Program Open Season runs from November 11 through December 9 when enrollees can select a new health plan or stay with their current carrier. Next year, there will be 188 health plan choices.

The FEHB Program is the largest employer-sponsored health insurance program in the nation with almost nine million employees, retirees and dependents. But, FEHB is not immune to inflationary factors and Director Kay Coles James vows to continue to curb future cost hikes. She attributes "choice" as part of the reason the program's favorable comparison with premium increases nationally. She also said choice helps promote healthy competition among carriers. Factors contributing to rising health-care costs throughout the nation are the increased use of prescription drugs, an aging population and advanced medical technology.

In 2003, FEHB Program enrollees with self-only coverage will pay approximately $4.45 more in premiums per pay period; those with family coverage will pay about $10.21 more per pay period. On average, the Government pays 72 percent of premiums.

Director James took aggressive actions during her first full year as OPM Director when she met with the FEHB plans and asked for their best ideas to keep the Program on the cutting edge of employer-sponsored health plans. One result is an innovative consumer-driven option under the APWU Health Plan.

Director James also personally encouraged FEHB contract negotiators to take "tough" positions with carriers on behalf of enrollees, initiated an outside audit to review the cost of mandated services, and collaborated with OPM's Inspector General to investigate waste and fraud in the Program. She also took decisive action to resolve carrier concerns that threatened continued participation by exempting them from inappropriate accounting standards and substituting an appropriate regulatory framework.

Director James also announced that employees can contribute to a Flexible Spending Account (FSA) for certain medical costs not covered by their health plans as well as for dependent-care expenses.