Healthcare: OPM Announces Premium Increase

The Office of Personnel Management (OPM) has announced that Federal Employees Health Benefits (FEHB) insurance premiums will be increasing 13.5% on average across all plans. OPM stated that this increase--its highest in over a decade--is due to price increases, expanded coverage of prescription drugs, and behavioral health spending. Paired with the White House’s meager proposed pay raise of only 2% for 2025, these FEHB premium increases will likely lead to less coverage for any federal workers forced to choose between certain healthcare expenses and so many other inflated costs of living.

There are currently two initiatives by lawmakers that would, if passed, alleviate the problem:

1. Passing The Federal Adjustment of Income Rates (FAIR) Act This would provide a 7.4% pay increase in 2025 for federal employees. The bill was introduced in the Senate early this year and was referred to the Homeland Security and Governmental Affairs Committee (HSGAC, often pronounced hiz-gak). HSGAC is the Senate committee responsible for handling most federal worker issues, so it’s worth knowing who is on it and to develop relationships with their offices, if possible. The equivalent committee in the House of Representatives is the Committee on Oversight and Accountability.
2. Accelerating The Inflation Reduction Act of 2022 The act is famous for a provision that allows the federal government to negotiate drug prices under Medicare. The Congressional Budget Office (CBO) estimates that this provision would lead to savings for FEHB as well as Medicare. These savings would take away reasons for the FEHB premium increase, but the negotiated drug prices won’t go into effect until 2026 at the earliest. There are some lawmakers who are pushing to accelerate this timeline.

In the meantime, please note that the open season for the FEHB program has begun and will run until 9 DEC.