FEHBP Premiums: Burying The Skunk

In Washington, when you’ve got bad news to announce, the rule of thumb is to release it late on a Friday afternoon. And run.

Call it Burying The Skunk. Sweetening the PoleCat if you prefer. You do it Friday, just before sundown, because…

Most politicians leave DC Thursday afternoon. Many of the wretches, uh, people impacted by the “bad” news are preoccupied with weekend plans. And most reporters (we assume they assume) will be at the corner bar by the time the bad news breaks. By Monday morning, Friday’s ‘bad’ news may have been overtaken or minimalized by some even worse news. Or so the theory goes.

In this case, last Friday’s skunk was about the 2011 increase in federal employee health premiums. FEHBP premiums will go up an average of 7.2 percent—on average.

And all things considered, the ‘bad’ news about FEHBP premiums isn’t all that bad—unless you are a retiree—when you consider premium hikes in the private sector, and in state and local government plans. The 7.2 percent figure looks relatively good. Not worthy of a Friday p.m. skunk burial.

On September 17, benefits watcher Ed Zurndorfer predicted the 2011 FEHBP premiums would go up 5 to 10 percent. But the big problem facing feds and retirees, he said, will be changes in co-payments which will force many more people to pay more out of pocket.

Looking at the “average” increase in FEHBP premiums isn’t the way to go. For instance this year (2010) the “average” premium increase was 8.8 percent. But many feds and retirees wound up paying more than that, unless they switched plans.

So forget average for a moment and look at the reality numbers:

Most of the people in the FEHBP (and the vast majority of retirees) are enrolled in a Blue Cross-Blue Sheld Plan. Last year premiums in those plans jumped. But next year premiums for individuals who are in the “standard” service benefit plan will go up $5.58 per pay period, or $14.14 if they are in the family option.

For those in the Blue Cross basic self-only plan the biweekly increase will be $5.82 and the family premium will go up by $13.62.

The employee share of GEHA premiums next year will go up $1.78 and $5.79 respectively for single and family high option, and the biweekly increase will be $2.97 for self-only standard coverage and $6.82 for family standard coverage.

Retirees in the FEHBP—regardless of their age or health—pay the same premiums (on a monthly basis) as do the youngest, healthiest federal worker in the same plan.

The government continues to pay the lion’s share of the total premium. For instance next year in the APWU high option self-only plan the total premium will be $220.19 biweekly, with the government paying $164.14 of that. The employee premium for self-only high option will be $55.05 biweekly, an increase of $3.61 over this year.

Children up to age 26 will be eligible for coverage (under any of the family plans offered by the FEHBP) starting in January.

The open enrollment period, when people can shop for and pick their 2011, health plan runs from Nov. 8 through Dec. 13. During that open season we will have a series of columns listing “best buys” as picked by health insurance expert Walton Francis. We’ll also bring you up to speed on benefit changes, plan-by-plan, which will be announced shortly.

Most of the bad news is saved up for retirees. While nonpostal federal workers are on track for a 1.4 percent pay raises next year, retirees will get nothing. They didn’t get a cost-of-living adjustment this year and as we predicted they won’t get one in 2011. So they will have to live with higher premiums in many of their health plans, or switch to a plan with lower premiums.

To do a plan-by-plan comparison, click here.


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GREENING OF GOVERNMENT SERIES
Tune in all this week for Federal News Radio’s special report, the Greening of Government. Today’s topic, technology. We’ll examine how agencies are changing their use of technology to better reflect President Obama’s sustainability goals.

And be sure to check out yesterday’s topic – transportation. A few highlights from that report…

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