Open Season

October 9, 2025

By Shane Stevens, Associate Director for Healthcare and Insurance

If it’s fall, it’s health benefits open enrollment season – here at the federal government and in most private sector companies.

The Healthcare & Insurance (HI) division at the Office of Personnel Management (OPM) manages health insurance for roughly 8.2 million federal employees, retirees, and their families--approximately 2.4% of the US population. In 2025, we expect to spend about $79 billion to cover medical and drug costs associated with these members. We do this through more than 200 plans that are provided by various commercial providers – across the country and internationally.

The age demographic of active federal enrollees reflects the same age skew we see overall in the federal government – roughly 42% of federal employees are over the age of 50 (compared with 33% in the general workforce) and about 7% of federal employees are under the age of 30 (compared with about 20% in the general workforce). The under-30 demographic has been decreasing for approximately 15 years, dropping from its peak around 10% in 2010.

As a result, the average age for active employees enrolled in our health insurance programs is about 47 years old. Federal retirees are also eligible for coverage, and once they are included, the average enrollee age jumps to 60. Not surprisingly, that affects our annual health care expenditures. An older enrollee base means more chronic conditions and more pharmaceutical usage.

Despite all of this, we are pleased to announce that our overall average premium increases for our federal health insurance programs are around 9% for postal workers/retirees and 10% for non-postal workers/retirees. Increases for non-postal workers/retirees are below what the increase was last year – so some positive movement. In addition, when you look at our overall numbers by type of plan coverage, we are 2-3% points lower than the rate increases reported for CalPERS, which is a smaller population but reasonably comparable in terms of coverage/age demographics.

All that being said, we recognize that increasing health care expenses at this clip is not a sustainable path. As we assess the overall health vs. expense equation across the US, we find an alarming trend. Per capita health care spend is higher than our peer nations, our life expectancy has dropped further and we see rising rates of treatable and preventable mortality. In short, something is NOT working. As a result, we are very excited about a number of things OPM is working on to increase the quality of care, improve health outcomes, and reduce overall expenses.

Waste, fraud and abuse – With an expenditure of $79 billion, there is potential for significant savings by increasing efforts in this area. For example, OPM received a budget allocation as part of the Working Families Tax Cut Act to build a robust enrollment verification process to ensure we are covering only eligible family members.

Pharmaceutical costs – As noted above, we spend a huge percentage of our overall budget on drugs. Much of this is great – GLP-1s, for example, have the potential to dramatically change downstream medical costs for many Americans (when used and managed properly), but they add substantially to our costs in the short-term. As you may have seen, President Trump is working directly with pharmaceutical companies to help lower costs overall for all Americans. We anticipate an opportunity to support this effort and will benefit from these efforts to help ensure our government plans are also able to realize these savings.

Make American Healthy Again – President Trump and Secretary Kennedy are of course trying to transform how we as Americans think about health care – moving from a disease-oriented, approach to a more proactive, preventive health-first orientation. In other words, transforming from a Sick Care model to a Well Care model. Not only will this enable people to live healthier, happier, more productive lives, but it will have a significant impact on driving down overall healthcare costs. We are partnering with those efforts to ensure that what’s good for Americans writ large will be good for our federal employees and retirees. Prioritizing and incenting healthy behaviors will completely change the nature of modern healthcare.

None of these initiatives of course will happen overnight – turning a $79 billion ship takes slow and steady progress. But, we are committed to improving the quality of life and quality of care for our members while also ensuring that healthcare remains accessible and affordable for those who work (or have worked) for the American people.