Benefits September 16, 2005

Fed Health Care Cost Hikes Also Slowing

September 16, 2005 (PLANSPONSOR.com) - In yet another sign that the spiraling workplace health-care costs increases are cooling off, federal employees and retirees will be dealing with the lowest annual cost hike in nine years, the Bush Administration announced.
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The US Office of Personnel Management (OPM) said the average national increase will be 6.6% more in 2006, the Washington Post reported.

Linda Springer, director of the OPM , which oversees the Federal Employees Health Benefits Program, asserted the government has given federal workers and retirees more health care options while trying to hold down costs.

According to the Post, next year’s increase will be the government’s smallest since 1997, when average premiums rose 2.4%. Independent studies predict a 10% increase in health insurance premiums for private sector employees next year, OPM officials said (See Small Employers Lead Workplace Health Coverage Decline ). Federal employees will have 279 health care plans to choose from, up from 249 this year.

An employee with the standard family coverage under Blue Cross and Blue Shield – the most popular plan, covering more than half of all participants – will pay $17.53 more in premiums every two weeks, bringing the biweekly cost to $135.59. Standard coverage for an individual will rise by $7.36, to $58.07 biweekly.

Across all plans, a federal worker with family coverage will pay an average of $12.79 more in premiums every two weeks, for a total biweekly cost of $130.17. At the same time, the government will contribute $16.83 more toward that worker’s health coverage, for a total biweekly cost of $306.82. The worker’s portion of the premium will rise 10.9%, compared with a 5.8 % boost in the government’s portion.

Similarly, for an individual, the average will go up $5.30 every two weeks, for a total biweekly payment of $57.66. The government’s contribution for that individual’s coverage will rise $7.71 every two weeks, for a total biweekly payment of $134.98. That is a 10.1% increase in what the individual pays, and a 6.1 % increase in what the government pays.

The program provides health insurance coverage to about 8 million government workers, retirees and their family members worldwide.

More about the federal government’s 2006 health care rates is here .

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