FEHBP: Premiums Up 9% for Next Year, 3rd Big Hike in Row
The Federal Employees Health Benefit Program (FEHBP), the largest employee-sponsored health plan in the nation with approximately 9 million federal enrollees worldwide, is poised to raise premiums an average of 9.3% for next year, the Washington Post reports. The increase marks the third major hike in three years -- 9.5% last year and 7.2% the year before. The Office of Personnel Management, which administers FEHBP, attributes the rise to increased prescription drug use and expanded technology use in doctors' offices and hospitals. OPM director Janice Lachance "called the three-year run of premium increases unacceptable," declaring, "Anyone who looks at the steady increases that this program has experienced has to come to the conclusion that something bold and dramatic must be done."
Raise the Bar
Lachance said her agency will ask Congress to allow it to develop higher standards for plans that wish to participate in FEHBP. About 300 health plans currently contract to cover government employees, retirees and their families under FEHBP. Seven of these are fee-for-service plans available worldwide, the remainder are locally based HMOs or point-of-service plans. Plans qualify under minimal state licensing and solvency standards, but Lachance wants to establish quality standards based on resolution of claims disputes and speed of reimbursement. The OPM also wants to look into contracting separately for dental and vision benefits, rather than letting plans roll those benefits into overall coverage. It also hopes to "study whether to carve out prescription drugs or other 'cost drivers' for separate negotiations," all in hopes of using FEHBP's bulk buying power to get big discounts (Barr, 9/19).