![This is the most premiums have risen in more than a decade.](https://cdn.govexec.com/media/img/cd/2022/09/30/093022GEfehbp/860x394.jpg?1664566809)
This is the most premiums have risen in more than a decade. Aslan Alphan / Getty Images
Federal Employees Will Pay 8.7% More Toward Health Care Premiums Next Year
The Office of Personnel Management said increased use of health care services as the COVID-19 pandemic has waned has led to the sharpest uptick in health insurance premiums in more than a decade.
Federal employees and retirees will spend an average of 8.7% more on their health insurance premiums in 2023, a figure that marks the highest cost increase in more than a decade.
The government’s share of Federal Employees Health Benefits Program premiums will increase by an average of 6.6%, bringing the overall increase to 7.2%, according to an OPM document obtained by Government Executive. That overall premium increase is the highest the nation’s largest health insurance program has seen since costs increased 9% in 2011.
On average, federal employees enrolled in “self-only” plans will pay an additional $8.11 per bi-weekly pay period, while feds in “self plus one” insurance plans will pay $20.34 more per pay period. Federal workers enrolled in family coverage will pay an average of $20.87 more per pay period in 2023.
For the Federal Employees Dental and Vision Insurance Program, the average premium for dental plans will increase by 0.21%, while the overall average premium for vision coverage will decrease by 0.41%.
The FEHBP’s annual open season, in which federal employees can choose from a variety of national and regional insurance carriers and coverage plans, will run from Nov. 14 through Dec. 12.
OPM’s document attributed the jump in premiums to the “unprecedented volatility” in health care costs due to COVID-19, noting that the pandemic cost FEHBP about $2 billion in the testing and treatment of the disease in 2021, or roughly double what the disease cost the program in 2020, which has impacted premiums for next year. OPM also cited an increase in usage of health care services, following a period earlier in the pandemic when enrollees used fewer medical services.
The document described the overall 7.2% increase as “aligned” with increases in premiums by comparable large employers. But three of those plans’ reported increases are lower than FEHBP’s—CalPERS, which covers California government employees, projects an average 6.75% increase; a Business Group on Health survey of large employers projected a 6.5% average increase; and consulting group Aon estimated health costs will increase by around 6.5% next year. The Kaiser Family Foundation projects a 10% average increase for individual marketplace premiums, with “most rate increases falling between about 5% and 14%.”
OPM said it has worked with insurers this year to improve coverage of prenatal and postpartum health care services, as well as increase access to gender affirming care for members of the LGBTQ+ community. Insurers are also required to provide “adequate coverage” of anti-obesity medications. And four new plan options will provide assisted reproductive technology coverage, bringing the total number to 18 plans next year, and an additional plan will provide an optional benefit for discounted ART procedures.
National Treasury Employees Union National President Tony Reardon said in a statement Friday that although the premium increases are reportedly in line with other large employers, the spike in costs underscores the inadequacy of President Biden’s proposed 4.6% average pay raise for federal employees next year.
“These premium increases may be similar to those expected by other large employers in the private sector, but they will still cause sticker shock for federal employees,” he said. “These premium increases are yet one more data point in our argument that federal employees deserve a fair pay increase in 2023. NTEU supports legislation providing federal employees, on average, a pay increase of 5.1%, which would help them keep up with rising costs and save for retirement.”