Washington D.C. – Health insurance costs for federal employees will increase by an average 5.6 percent in 2020, putting a significant dent in the take home pay of government workers around the country.
According to data provided today by the Office of Personnel Management, premiums are rising for most enrollees in the Federal Employees Health Benefits Program. These increases are due in large part to rising pharmacy costs, especially specialty drugs.
“These spikes in health insurance premiums are going to hurt the paychecks of the federal workforce,” said NTEU National President Tony Reardon. “Federal employees are dismayed that they will have to absorb this cost increase while many of them are still recovering from a 35-day government shutdown and fearing yet another potential shutdown next month.”
Because the 5.6 percent increase is an average, some FEHBP enrollees will see much larger increases, especially those in local health plans, where their share of the cost will jump between 7.9 percent and 14.1 percent.
OPM also reports that the employer’s share will increase an average of 3.2 percent, for an overall average premium increase of 4 percent.
Open season for federal employees to re-enroll or change their health insurance for next year starts Nov. 11 and goes through Dec. 9.
“Open enrollment is an important time for federal employees to evaluate their insurance needs and find a plan that is best for them and their family, and NTEU will be advising our members to fully investigate the range of benefits and cost increases and calculate the impact on their families,” Reardon said.
For employees who enroll in the nationwide Blue Cross and Blue Shield standard option, for example, the family coverage will cost them $286.74 per biweekly paycheck, an increase of $18.53.
“It’s true that on paper, federal employees have a number of options in choosing health coverage and FEHBP does include some lower cost plans. However, high deductible or fee-for-service plans are not right for everyone, and we are concerned that these sizable premium increases are going to put additional financial stress on the federal workforce,” Reardon said.
NTEU continues to support efforts in Congress to reduce enrollee health care costs, such as previously introduced prescription drug-related pharmacy benefit manager (PBM) legislation that would provide consumers with more transparency, and at times, cheaper options at the pharmacy counter.
PBMs operate as middlemen to negotiate prescription drug prices with drug companies and pharmacies on behalf of individual FEHBP plans, though in recent years there has been little evidence it has reduced costs for enrollees.
NTEU believes that OPM should take steps to ensure measures like these are extended to FEHBP plans, which would provide some opportunity for minimal savings for federal employees.
NTEU represents 150,000 employees at 33 federal agencies and departments.