HEALTH PREMIUMS: Federal Workers Hit with 10.5% Rate Hike
The Clinton administration announced Friday that health insurance premiums for federal employees and retirees will jump 10.5% next year, marking a "staggering" 36% increase since 1998, the Washington Post reports. About 9 million government workers, retirees and family members receive insurance under the Federal Employees Health Benefits Program, which covers 72% of the average premium for enrollees. Beginning in January, beneficiaries with "self-only" plans will pay about $3.50 more biweekly, while those with family coverage will pay $9 more, the Office of Personnel Management, the agency that runs the program, reports. OPM Director Janice Lachance said that the agency elected to raise premiums for all enrollees rather than slashing benefits or slamming retirees with higher out-of-pocket costs. According to OPM, ballooning prescription drug costs, increased use of medical services and a growing number of aging enrollees helped to drive premium rates up for the fourth straight year. "I don't think anyone in the industry is happy about it, but you need a certain amount of money to pay your claims and meet your responsibilities," Richard Miles, president of the Government Employees Health Association, said. The premium increase for federal employees, similar to premiums facing large and mid-size companies next year, did not surprise health care industry analysts. "It's really no surprise. Prescription drugs are leading the pack when it comes to accounting for increases in health care costs, and I think that's going to continue as long as there are new drugs in the pipeline because people want the new treatments," Paul Fronstin of the Employee Benefit Research Institute concluded (Barr, 9/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.