Premium Break Seen for FEHB

The Washington Times (Washington, DC), August 10, 2004 | Go to article overview

Premium Break Seen for FEHB


Byline: Mike Causey, THE WASHINGTON TIMES

After years of double-digit premium increases, the 9 million people covered by the nation's biggest company health plan will get a break in 2005, analysts say.

Premiums for the Federal Employees Health Benefits (FEHB) program 2005 plan year won't be announced until later this year, but some plan watchers think policyholders, and the public that pays the lion's share of the premiums, may be pleasantly surprised when the new rates are announced.

Calpers, California Public Employees' Retirement System, often acts as a bellwether for the larger federal program, and it had a mild increase for its 2005 plan.

Premiums for FEHB, the cradle-to-grave health plan covering everyone from ex-presidents to CIA agents, astronauts, and Congress, went up an average of 11.1 percent this year, at the same time that feds in the Washington-Baltimore area were getting a 4.42 percent pay raise.

Federal health premiums - like those of other group plans - are based on usage, costs and the rise in medical inflation, which is almost always much higher than the regular rate of inflation.

But even with the double-digit increases of the past, premiums in the FEHB plan have gone up much less in recent years than for many private-sector plans. In fact, some companies have scrapped their health plans. This has caused Democratic presidential candidate Sen. John Kerry of Massachusetts to propose adding uninsured workers and their families to the federal health program.

A lower-than-normal price increase, if it comes to pass, would be a blessing to lower-paid feds and to retirees who typically get by on inflation-indexed annuities that are about 55 percent of their final salary. …

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