Federal employees and retirees will spend an average of 8.7 percent more on their health insurance premiums in 2023, a figure that marks the largest cost increase in more than a decade.

The government’s share of federal employee health benefit program premiums will an increase of 6.6% on average, bringing the total increase to 7.2%, according to an OPM document obtained by executive authority. That total premium increase is the largest in the nation’s largest health insurance program since costs rose 9 percent in 2011.

On average, federal employees enrolled in self-only plans will pay an additional $8.11 per two-week pay period, while federal employees 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 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%.

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 November 14th through December 12th.

The OPM document attributed the surge in premiums to “unprecedented volatility” in health care costs due to COVID-19, noting that the pandemic cost FEHBP about $2 billion to test and treat the disease in 2021, or roughly double the cost of the disease program in 2020, which affected the premiums for the following year. OPM also cited an increase in the use of health services after a period before the pandemic when enrollees used fewer medical services.

The document described the overall increase of 7.2% as “on par” with premium increases from comparable large employers. But three of those plans’ reported increases were lower than FEHBP’s—CalPERS, which covers California public employees, projected an average increase of 6.75%; a Business Group on Health survey of large employers predicted an average increase of 6.5%; and consulting group Aon predicts that health care costs will increase by about 6.5% next year. The Kaiser Family Foundation projects an average increase of 10% for individual premiums in the market, with “most rate increases falling between about 5% and 14%.”

OPM said it worked with insurers this year to improve coverage of prenatal and postpartum health 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 drugs. And four new plan options will provide coverage for assisted reproductive technology, bringing the total 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 while premium increases were reportedly in line with other large employers, the surge in costs underscores the inadequacy of President Biden’s proposed 4.6 percent average a pay raise for federal employees next year.

“These premium increases may be similar to those expected by other large private sector employers, but they will still come as a shock to federal employees,” he said. “These premium increases are another data point in our argument that federal employees deserve a fair pay raise in 2023. NTEU supports legislation providing federal employees with an average pay increase of 5.1 percent, which would help them to cope with rising costs and save for retirement.


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