Every August, I get the same question in my inbox: “Dennis, what’s going to happen to my FEHB premium next year?” I understand the anxiety behind it. Health insurance is usually the single biggest line-item coming out of a federal paycheck or annuity check, and nobody likes waiting until November to find out how much more of their income is going to be consumed by health care premiums NEXT YEAR.
That anxiety is compounded by the fact that many retirees on Medicare have to pay an Income-Related Monthly Adjustment Amount (IRMAA) over and above the standard Medicare premium.
Here’s the honest answer: nobody outside of OPM and the carriers knows the final 2027 numbers yet. Open Season announcements don’t typically land until early October, and Medicare premiums aren’t announced until late October to early November.
There are early signals worth watching now, and understanding them will make you a smarter shopper when the real numbers drop. I’ve watched this cycle repeat for more years than I care to count, and the pattern is almost always the same: anxiety in August, real numbers in October, and a rushed decision in November from people who didn’t use the time in between.
What Drives the Premium Number
FEHB premiums are driven primarily by three things: national health care cost trends, the claims experience of the specific plans you’re eligible for, and how OPM negotiates with carriers heading into the new plan year. Prescription drug costs, particularly for specialty and GLP-1 medications, have been a major upward pressure across the entire health insurance industry over the last several years, and federal plans are not immune to that trend.
There’s a fourth factor that gets less attention but matters just as much: the size and health of the risk pool for each specific plan. Smaller plans with an older or sicker enrollee population tend to see steeper premium swings year to year than the large, broad-based plans like the Blue Cross Blue Shield Standard or Basic options. If you’re enrolled in a smaller or specialty plan, don’t assume your premium change will mirror what you read about the big national plans in the news coverage every October.
PSHB adds another layer for postal retirees and employees. Since the Postal Service Health Benefits program split off from FEHB, its risk pool and premium trajectory can move somewhat independently from the broader FEHB pool. If you’re a postal annuitant, don’t assume your premium will track the same percentage change as your non-postal neighbor’s FEHB plan. The PSHB program is still relatively young, and its cost trends are still stabilizing as the risk pool matures, which means postal enrollees should pay extra attention to their specific plan’s announcement rather than relying on general FEHB commentary.
Early Signals Worth Watching
Every year, a handful of large carriers release preliminary rate filings or comments to the trade press before OPM’s official announcement. These aren’t final, but they tend to be directionally accurate. Watch for the same theme repeating across multiple carriers; that’s usually a sign of a real market-wide trend rather than one plan’s isolated cost problem. If you see broad commentary about mid-to-high single-digit premium growth, or higher for prescription-heavy plans, take it seriously and start planning your budget for a real increase.
Another signal worth tracking is any federal legislative or regulatory activity around prescription drug pricing. Policy changes affecting how manufacturers price specialty drugs or how PBMs negotiate rebates can ripple into premium calculations the following year, sometimes in ways that aren’t obvious until the official numbers are released. I try to flag any major developments here throughout the fall so you’re not caught off guard.
What You Can Do Right Now
You cannot control the premium number, but you can control how you respond to it. Right now, before Open Season starts, is the time to:
- Review your actual usage from the last plan year. Pull your Explanation of Benefits or plan summary and see what you actually spent versus what you paid in premiums.
- Note any life changes. A new prescription, a planned surgery, a spouse becoming Medicare-eligible, any of these can change which plan makes financial sense for you in 2027.
- Flag your current plan’s summary of benefits and coverage now, while you have time to read it carefully, rather than skimming it during the Open Season rush in November.
- Talk to your spouse or family about upcoming medical needs. If someone in your household is facing a procedure or ongoing treatment next year, that changes the calculus on deductibles and out-of-pocket maximums far more than the headline premium number does.
I’d add one more piece of homework to that list: if you’re within a few years of Medicare eligibility, start thinking now about how FEHB and Medicare will coordinate for you. That decision tree is a topic on its own, and one worth researching before you’re facing an Open Season deadline and a Medicare enrollment window at the same time.
The Bottom Line
We won’t have real 2027 FEHB and PSHB numbers until Open Season materials are released, typically in early October. But the early market signals point toward continued upward pressure on premiums, especially tied to prescription drug costs, and postal enrollees should watch their PSHB-specific announcements closely rather than assuming parity with FEHB trends. Use these last few weeks before Open Season to get organized: know your usage, know your options, and don’t wait until the deadline crunch to start comparing plans. I’ll have the full plan-by-plan breakdown for you the moment the official numbers are released.
Last 5 posts by Dennis Damp
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Dennis V. Damp is an author, retired federal manager, business owner, career counselor and veteran. Damp is the author of 28 books, a recognized benefits expert, and a retired federal manager with 35 years’ service. Dennis has been a guest on hundreds of radio talk shows, CNN’s YOUR MONEY and the Lou Dobbs Cable TV shows, lectured at universities and colleges, produced Internet web sites and training videos, and has written hundreds of articles for national magazines and newspapers. His books have been featured in the Wall Street Journal, Washington Post, New York Times and U.S. News & World Report.
Dennis joined the Air Force in 1968 and spent over three years on active duty and an additional seven years with the Air National Guard. He was hired by the Department of Defense (DOD) after leaving active duty and transferred to the Federal Aviation Administration (FAA) in 1975. He spent the remainder of his career in various positions with the FAA. His last position was technical operations manager at the Pittsburgh International Airport’s air traffic control tower.
