FEHBP Premium Increase

On September 29th, OPM announced FEHBP Premiums will increase an average of 8.8 percent in 2010. The (FEHBP) premium increase of 8.8 percent for 2010 comes in a year when no cost-of-living adjustment (COLA) is expected.

The premiums for retirees in (Blue Cross/Blue Shield Standard option) will jump by 12.4 percent for the family plans and 15.1 percent for self-only coverage. The 2010 rate hike is within the range of increases in other large group health insurance programs and the Office of Personnel Management (OPM) is serious about reducing prescription drug costs. However, FEHBP premiums could have been lowered if it were not for OPM’s decision to reaffirm the previous administration’s policy of declining a payment available to other public and private employers who provide drug coverage as generous as Medicare’s. As much as $1 billion could be available to OPM. This money could lower annuitant premium costs.( I have written about this subject before.)

While the FEHBP rate increase is bad news, we can take some comfort in the House’s approval on September 24 of NARFE-backed legislation (H.R. 3631) which would protect all federal annuitants – including retirees and survivors who are not eligible to receive Social Security – from the 2010 Medicare Part B premium increase.