For federal employee health insurance, it’s never if, but how much?

It’s practically inevitable that health insurance rates for federal employees and retirees will go up each year, and it’s no different for 2022.

Participants in the Federal Employees Health Benefits Program (FEHBP) can expect to pay, on average, about 3.8% more toward their health premiums in 2022, the Office of Personnel Management announced last week.

Overall premiums will go up — again, on average — 2.4% next year, with the government’s share rising by about 1.9% in 2022.

That’s actually a relatively modest bump, at least compared to recent years. FEHB participants paid an average of 4.9% more toward their health plans for 2021 and 5.6% more for the previous year.

Rates back in 2016 were even higher.

So far nothing can top 2019, when FEHB participants paid just 1.5% more toward their health insurance. It was the smallest overall rate increase since 1996 and the lowest premium hike for participants since 1995. Take the small victories in life.

For 2022, OPM calculated what this information would mean for the average employee’s paycheck.

Assuming non-postal federal employees receive a 2.7% pay raise as planned, OPM estimated the average worker will earn a biweekly salary of $3,599 next year. Health insurance, on average, will cost employees $171.74 for each pay period, or roughly 4.8% of their salaries, OPM said.

That’s slightly more than the current year, where biweekly salaries averaged $3,504 for each pay period and employees paid $165.52 toward health insurance in 2021, or 4.7% of their salaries, OPM said.

It’s worth repeating again; these are averages. Rates are going up for some plans in 2022, while some will actually go down.

Take a look at what OPM has posted so far about next year’s premiums. (Full plan brochures should go up in the weeks before open season starts on Nov. 8.)

A participant enrolled in Blue Cross and Blue Shield Basic will pay $3.42 more every month for insurance, with an employee enrolled in the family plan paying $23.88 more per month.

The Blue Cross and Blue Shield standard plan will go up $8.71 a month for individual participants and $30.31 for families.

But the cost of a Government Employees Health Administration (GEHA) plan for one will dip by $7.11 a month, with monthly rates for a family plan dropping by $25.74, according to OPM.

OPM sets premium rates for a given year based on how federal employees and retirees used the health care system during the prior year.

Sure, the rising costs of treating chronic illnesses, prescription drugs and advances in medical technology continue to drive health care prices up, OPM has said.

But the pandemic continues to make predicting annual FEHB premium rates difficult, to say the least.

Some carriers  told OPM that the costs of treating and testing COVID-19 patients had an impact on their rates, though perhaps not a huge one in the grand scheme of things.

COVID-19 tests and treatment cost the FEHBP about $1 billion in 2020 and represented about 2% of the program’s claims.

OPM said it anticipates those costs will eventually go down, especially as more employees get vaccinated.

When asked for more details on why the 2022 rates stayed relatively modest, OPM told us:

“Actual 2020 trends were less than projected when 2021 rates were being set, largely due to the unknown future trajectory of the COVID-19 pandemic,” the agency said. “2022 rates incorporate actual 2020 trends and 2021 experience to date, as well as projections of costs throughout the remainder of the year and into 2022. The 2022 rate increase was also offset by expected savings through several carrier renegotiations with their pharmacy benefit managers.”

In other words, feds used the health care system less frequently during that initial year of the pandemic as they delayed elective surgeries and other semi-optional procedures.

That’s starting to change. OPM said it’s beginning to see FEHB participants file more claims as they make more regular doctor’s visits or schedule procedures they initially delayed. That trend will likely continue into 2022 and could impact premiums in future years.

“We’re still in a unique situation with the pandemic,” Greg Klingler, chief operating officer of the Government Employees’ Benefits Association (GEBA), told me. “We’ve really never seen a pandemic like this since I guess 1918, and obviously the FEHB plan wasn’t in effect at that time. I think everyone’s treading new waters here.”

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