Federal workers, who now pay about 30 percent of their total health plan premium, could wind up shouldering more than half the burden in a few years under deficit-cutting plans being considered by Congress and the Obama administration.

Since the government often leads the health insurance parade, any change in premium-sharing could have an impact on private sector firms and cash-strapped state and local governments.

Currently the government and employees share the cost of premiums. Under a formula set by law, the government pays about 70 cents of each premium dollar. Nonpostal federal workers and retirees pay the remaining 30 percent of the total premium.

Example:

The popular Blue Cross-Blue Shield basic family plan has a biweekly total premium of $ $453.48. But of that amount, the government pays $340.11 and the employee pays $113.37. To check out the premium split in your health plan, click here.

That 70/30 split, which also applies to FEHBP premiums of members of the House and Senate, varies slightly among the dozens of plans available to active and retired civil servants and their survivors. Overall the program covers nearly 9 million people, from CIA agents to NASA astronauts and other civil servants.

Premiums in most of the health plans generally go up each year. Sometimes by a lot. Employees and retirees can switch plans during the regular Novemeber-December open season, or any other time when they have a change in status (including marriage, birth, divorce or death of a spouse.) But each time premiums go up, the 70/30 split is adjusted so that the government continues to pay the lion’s share.

The presidential commission on deficit reduction chaired by former Sen. Alan Simpson (R-Wyo.) and former White House aide Erskine Bowles (National Commission on Fiscal Responsibility and Reform) produced a laundry list of cuts that would be presented to Congress. One of those proposals was for a 3-year federal pay freeze which President Obama modified to a 2-year freeze. The commission also recommended that feds pay a larger share of their premiums. It and other proposals are being considered by groups in Congress, from the Senate Gang of 6 (now maybe 5,) to the so-called Blair House task force headed by Vice President Joe Biden which is also looking at changes in FERS, the largest federal retirement program covering about four-fifths of the workforce.

Dan Adcock, legislative director of the National Active and Retired Federal Employees Association, said the plan to gradually boost the employee-retiree share of premiums “is one that keeps me up at night.” The proposal would cap the government share based on a complex formula using the GDP (gross domestic product). The bottom line, Adcock said, is that if it was enacted this year, workers and retirees who now pay 30 percent of their premium could wind up paying 34 percent in 2012 and as much as 54 percent within 8 years.

That would be especially tough since federal workers are under a pay freeze for 2011 and 2012, and federal retirees have not had a cost of living adjustment in the last two years.

He talked about various proposals aimed at feds and retirees on last week’s Your Turn with Mike Causey radio show. To listen, click here.

To reach me: mcausey@federalnewsradio.com

Nearly Useless Factoid
by Suzanne Kubota

The Smithsonian Magazine reports a “mummified princess from Thebes (known as Luxor during her time) is the earliest person known to have had coronary heart disease.”

MORE FROM FEDERAL NEWS RADIO

Thousands of Air Force and federal jobs to go unfilled
Other headlines from this morning’s Federal Newscast include: Half a million feds could retire right now, SSA call center put on hold, Broadband cell test knocks out GPS.

Proactive protection for your federal retirement
A proposal in the House 2012 budget plan includes a big increase to federal employees’ pension contributions from 0.8 percent to about 6 percent. The White House is also considering the proposal as part of a debt reduction compromise. It has many feds worried about their nest eggs.

Rep: Buerkle: VA, DoD must ‘bridge gap’ in wounded warrior care
It’s been four years since the Departments of Defense and Veterans Affairs launched the Federal Recovery Coordinator Program, designed to expedite the process for wounded vets to get the care and services they need. But one lawmaker says the two agencies are operating too independently of each other to make the program successful.

Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.