Federal employee health care premiums to rise 8.7% on average

Premiums in the health care program for federal employees and retirees will increase by 8.7% on average for 2023—the largest increase in more than a decade, the government announced Friday.

That change in Federal Employees Health Benefits Program premiums is significantly larger than the 3.8% average increase for 2022, although closer to the 5% to 7% range of most other recent years.

The cost increase is a reflection of rising prices for some drugs and higher uses of professional services and outpatient treatments, said the Office of Personnel Management. “This is consistent with the larger market and reflects the impact of the COVID pandemic,” OPM said.

The program is open to nearly all federal employees and retirees who were covered continuously for five years before leaving the job; it has more than 4 million enrollees and about an equal number of covered spouses and children under 26, making it the nation’s largest employer-sponsored health insurance program.

“These premium increases may be similar to those expected by other large employers in the private sector, but they will still cause sticker shock for federal employees,” said National Treasury Employees Union President Tony Reardon.

The FEHBP will have 271 participating plans in 2023, about the same as currently, with the large majority available only regionally.

For 2023, there will be expanded benefits for maternal care, medical foods, anti-obesity medications, assisted reproductive technology and gender-affirming care and services, OPM said. The program will also continue pandemic-related changes including expanded telehealth services and coverage of vaccines, tests and therapeutics.

About two-thirds of federal health-care enrollees are in one of three nationwide plans offered by Blue Cross Blue Shield. In the largest of those, the “Basic” plan, the employee cost is increasing by $6.49 biweekly to $86.67 for self-only coverage; by $21.77 to $217.90 for self plus-one; and by $25.62 to $237.91 for family coverage. Retirees pay the same rates but on a monthly basis rather than biweekly.

During open enrollment season, Nov. 14 to Dec. 12, enrollees will be able to change plans. Also, employees not currently enrolled can join the programs, but retirees cannot newly enroll.

Organizations representing federal employees and retirees decried the increases and urged enrollees to use the opportunity to comparison shop for their coverage in 2023.

“This will be the highest increase in FEHB premiums since 2011, and it comes as enrollees must deal with high inflation across the board,” National Active and Retired Federal Employees Association President Ken Thomas said in a statement.

Everett Kelley, president of American Federation of Government Employees, added, “If the government continues to squeeze federal employees in a vice with low pay on one side and out-of-control health care costs on the other, we will continue to see widespread staffing crises and the attendant complications as government struggles to recruit and retain talented employees who can get a better deal in the private sector.”

Federal employees are in line for a January raise averaging 4.6%, with some difference by location. Federal retirees are to receive a cost-of-living adjustment that is yet to be determined but probably will be in the range of the FEHBP premium increase since it reflects overall inflation trends.

OPM, meanwhile, announced that premiums will be little changed in a separate program, the Federal Employees Dental and Vision Insurance Program, where enrollees pay the full cost.