Thursday, September 13 2007
Modest FEHBP Increase Undercut by 8.5 Percent Rise in Blue
Cross/Blue Shield Rates
The Office of Personnel Management (OPM) announcement today
that the increase in health insurance premiums for enrollees in the Federal
Employees Health Benefits Program (FEHBP) will average 2.1 percent in 2008 is
severely undercut by the stunning 8.5 percent average increase in premiums for
the Blue Cross/Blue Shield plan. Nearly 60 percent of the 8 million federal
employees, retirees, and their family members in the FEHBP are enrolled in the
Blue Cross plan.
“The increase to the Blue Cross/Blue Shield premium rates
comes even though OPM used cash reserves to hold down overall increases to the
plan,” said National Treasury Employees Union (NTEU) President Colleen M.
Kelley. “With more than 4 million people in the Blue Cross plan, this is a rate
hike of staggering impact.”
This marks the second year that OPM has allowed insurance
companies to draw down cash reserves to offset the cost of their plans. “I am
concerned about the potential risks—such as the impact of sharply-higher and
unexpected levels of claims—inherent in turning to this strategy on a long-term
basis,” Kelley said.
OPM also today announced the establishment of a Blue
Cross/Blue Shield Health Savings Account (HSA) pilot program in
NTEU has in the past warned that these plans threaten the
stability of the FEHBP by drawing in enrollees who do not anticipate high
health care costs for that plan year leaving a smaller pool of people in the
traditional plans. The smaller pool could trigger even higher health care costs
for those federal employees and retirees in those plans.
“This is a bad idea for the overall health of the FEHBP,”
Kelley said.
The more prudent course, she said, would be to increase the
government’s share of the premium from an average of 72 percent to the average
80 percent that is widely paid in the private sector; and use the considerable
leverage on premiums that should come from FEHBP’s
status as the nation’s largest group health plan.
Pending legislation advanced by House Majority Leader Steny Hoyer (D-Md.) would boost
the government’s share of FEHBP premiums to an average of 80 percent.
OPM also announced that premiums for the popular dental
insurance program, instituted only a year ago, will rise sharply by 6.1
percent.
Unlike the FEHBP itself, under which the cost is shared by
the government and employees, federal workers pay the entire premium for their
dental care plan on a pre-tax basis.
President Kelley also called on OPM to take advantage of the
substantial prescription drug subsidy to which it is entitled under Medicare.
“This could be a significant factor in holding down premium increases,” she
said, “and it is unfair to FEHBP enrollees that OPM is failing to take
advantage of it.”
As the largest independent federal union, NTEU represents
150,000 employees in 31 agencies and departments.
Rate Charts Link http://www.opm.gov/insure/health/08rates/index.asp