Posted on Friday, 27th September 2024 by

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Federal employees and annuitants enrolled in the Federal Employee Health Benefit’s (FEHB) program will pay 13.5% more, on average, for their health care premiums.

 

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Adding this huge increase to the 7.7% premium rise for 2024, and 2023’s 8.7% increase we are all paying substantially more for our health care insurance. OPM said the increase reflects changes in the market over the last year, and generally aligns with other programs in the commercial market. Over the past three years our average FEHB costs have increased 29.9%!

FEDVIP’s premium increases are quite modest in comparison. Average premiums for dental plans are increasing by 2.97%, and the overall average premium for vision plans will increase by 0.87 percent.

In March, Medicare Trustees forecasted monthly Part B premiums would increase to $185.00 in 2025 from $174.80 this year, a 5.6% increase. The finalized rates will be announced early October.

FEHB Blue Cross Blue Shield (BCBS) to GEHA Plan Cost Comparisons

Premiums for the Self-Plus-One BCBS basic (113) plan and Government Employee’s Health Association (GEHA) Standard (316) plan follow: BCBS’s monthly premium increased $76.94 to $593.97, a 12.95% increase, while GEHA’s premium increased $47.39 to $374.18, a 12.7% increase. The annual increases are $923.28 for BCBS Basic and $568.68 for GEHA Standard!

BCBS Standard Self-Plus-Family option (105) monthly premiums increased $116.93 to $920.07. GEHA’s High Self-Plus-Family option (312) monthly premium increased 151.80 $ to $815.36. The annual increases are $1,403.16 for BCBS Standard and $1,821.60 for GEHA High option! Both High option plans include a partial Part B reimbursement for those enrolled in Medicare.

Check all plan’s 2025 premiums to confirm what you will be paying next year.

Medicare Advantage Plans (Heads Up for the Upcoming Open Season)

Postal Service Health Benefits (PSHB) Plan Cost Comparisons

The monthly 2025 premiums for the Self-Plus-One BCBS basic (33C) plan will be $608.81 next year. Government Employee’s Health Association (GEHA) Standard (37F) plan will cost $346.41. Year-to-year comparisons aren’t available since 2025 is the first year of operation for the PSHB program.

The Standard BCBS Self-Plus-Family option (33E) monthly premium will be $943.43. GEHA’s High Self-Plus-Family option (37C) monthly premium will be $791.31.

Check all plan’s 2025 premiums to confirm what you will be paying next year.

OPM published a resource page for Postal employees, annuitants, and family members to help them transition to their new PSHB health coverage. These resources provide extensive program information and will be updated with additional guidance as Open Season approaches.


Increased Cost Factors

Carriers are providing more options for gender affirming care and services, maternal health, fertility, obesity management, mental health and substance use disorder treatment, and telehealth benefits. They also expect a continued focus on managing pharmacy costs.

These costs are added to the increased general operational costs that all companies are experiencing such as rising salaries, supplies, and contracted services. Another significant cost factor comes into play when OPM waives the neutrality cost clause to cover options listed in the previous paragraph.

Cost Neutrality

According to OPM’s cost neutrality clause, “When proposing an increase in benefits, Carriers must propose corresponding benefit reductions to offset any potential increase in premium, with limited exceptions directed by OPM.”

They provide an example in the clause, “If a Carrier were to propose decreasing a cost sharing in one benefit and this increase in benefits would have an additional cost impact, the Carrier would have to propose benefit decreases in other areas with an equal or greater reduction in cost than the benefit increase in the same plan option”

Carriers can reduce and offset higher costs elsewhere by increasing the catastrophic cap, change prescription drug formulary options, add or increase copays, deductibles or coinsurance; decrease the number of covered visits for therapy, chiropractors, and others. There are ways to creatively reduce costs without sacrificing the excellent health care benefits we receive under the FEHB program.

OPM may issue waivers to the cost neutrality requirement where needed for proposals of coverage enhancements outlined in their current and previous year’s program carrier letters.

Summary

With premiums rising at a feverish pace, this open season is a good time to explore lower cost FEHB plans to offset high costs elsewhere. This is especially true for those with Medicare as their primary provider because FEHB plans will cover your copayments, coinsurance, and deductibles as the secondary provider.

Explore each plan carefully to ensure they cover what you need at a cost you can afford. Use OPM’s Online Comparison Tool and Checkbook’s Guide to Healthcare Plans offers a comprehensive online comparison tool and/or a paperback book version.

Pre-Order Checkbook’s 2025 Guide to Healthcare Plans for Federal Employees and save 20% by entering promo code FEDRETIRE at checkout. When you pre-order you will immediately have access to their current 2024 Checkbook Healthcare Guide, the new 2025 Guide and OPM’s comparison tool will be available the first day of open season.

For retirees, Checkbook’s Guide provides a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate with Medicare parts A and B. This allows users to see which plans coordinate best with Medicare, the cost reduction of adding Medicare Part B, and whether the FEHB plan offers Medicare Part B premium rebates. They also review FEHB Medicare Advantage plan options which can be less expensive for many retirees.

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Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Last 5 posts by Dennis Damp

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Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH | Comments (0)


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