FEHBP Premiums, Co-Pays Going Up

If Las Vegas book makers made odds on the rise or fall of FEHBP health premiums, the smart money would be on a hefty 2011 increase. The premium schedule for the FEHBP should be announced next week. That open season will run from Nov. 8th through Dec. 13th.

And premiums won’t be the only thing insurance shoppers will need to consider during the benefits open enrollment period. Insurance hunters will also need to check new co-payment changes which could force policy-holders to shell out more of their own money for medical services.

Health premiums went up an average of 8.8 percent this year. But those averages are often deceiving because the are dozens of fee-for-service plans in the FEHBP and dozens of health maintenance organizations and other types of plans workers and retirees can join. Some of the plans this year went up much more than the “average” figure. A few went up less and one actually dropped premiums slightly.

The good news is that workers, retirees and survivors have a wide variety of choices and they can’t be rejected because of age, health, preexisting medical conditions or lifestyle.

Higher premiums and co-pays in some plans will be especially tough on federal retirees and their survivors. They didn’t get a cost of living (COLA) increase last January, and they won’t be getting a COLA in 2011. Federal workers are looking at a pay raise of 1.4 percent.

Although inflation is minimal, medical costs continue to rise sharply year after year. In past years the FEHBP (using cash reserves) has kept the average increase in its health premiums below those of most private sector, and many state and local government plans. But even though the rise for federal-postal-retiree premiums have been less than many places, it still hurts. Especially when your favorite plan, the one you’ve been with for years, increases much more than the FEHBP average.

Long time insurance watcher Ed Zurndorfer, predicts the average premium increase for 2011 (to be announced next week) will be in the 5 to 10 percent range.

“But that’s not all of it,” Zurndorfer said. He also expects that “co-payments in many plans will jump sharply” as insurance companies determine what the U&C (usual and customary) cost is, or should be, and then base co-payments according. “Say you have a physical that costs $500. And the insurance company says the U&C is actually $400. And your normal co-payment (the amount you are required to pay) is $20. The company set the U&C level at $400, for a service that costs $500. Then you pay 20 percent of that, which means your co-payment will be $180 on a $500 service.”

For an update on changes in FEHBP premiums and co-payments listen to Wednesday’s Your Turn with Mike Causey radio show. Ed Zurndorfer was our guest. All of the Your Turn shows are archived. You can listen to the insurance update by clicking here.

To reach me: mcausey@federalnewsradio.com


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