Health Premiums: You Really Want The Truth?

Wednesday - 10/8/2008, 4:00am EDT

The health insurance hunting season is upon us. It starts November 10 and ends Dec. 8th. Although the "average" premium increase is 8 percent, premiums will more than double for people in some plans unless they switch during the benefits open enrollment season.

Depending on where they live and work most feds and retirees have at least 10 plans to choose from. Those in the DC area have more than 20 choices. For many of them, premiums are going up a lot more than 8 percent.

Some people (most people) stick with the same plan year after year. some take their plan apart when comparing it with other options. Some people (probably most) think the FEHBP is great. But a vocal minority think it stinks, that the government does a lousy job of negotiating benefits and premiums and that it should reward the young, healthy and childless with lower premiums.

Monday's column reported some of the questions, complaints and suggestions readers sent us. Here's part of the official response we got from the Office of Personnel Management.

The first deals with employees who think the government isn't paying its fair share of their premiums.

OPM Response: "The maximum dollar amount the Government pays for any individual employee's health insurance is set by law at 72% of the weighted average premium for all FEHB health plans but no more than 75% of the premium for any particular health plan. This legislated calculation results in the Government paying approximately 70% of the total cost of the FEHB Program.

"A more complete statement of how the Government share is calculated: The amount the Government contributes towards individual premiums is based on Title 5 U.S.C. - 8906. The maximum government contributions are determined by taking 72% of the weighted average biweekly premiums (self and family separately), using as weights the prior March's official OPM Headcount of enrollees who received a government contribution. The government contribution for each plan equals 75% of the total premium, but not to exceed the maximum government contribution. The remainder of the total premium is paid by the enrollee.

"The government contribution equals the lesser of (a) 72% of the overall weighted average or (b) 75% of the total premium for the plan. The amount that the enrollee pays is the balance - that is, the difference between the total premium and the government contribution for his/her health plan. For those people enrolled in health plans that have premiums above the average, the premium balance remaining for them to pay will be higher.

One person said, in fact, the government "only" pays 58 percent of the premium for the plan he's chosen.

OPM Response: "This person has chosen to enroll in one of the more comprehensive and expensive health plans in the FEHB Program. As described in the previous question, Federal law limits the Government share of the premium to a dollar amount equal to 72% of the weighted average premium for all health plans. For 2009, this calculation results in a maximum bi-weekly Government contribution of $155.66 for self only and $352.56 for self and family enrollments. That is $4,047.16 per year for self only and $9,166.56 per year for family enrollment.

"Each year during Open Season Federal employees and retirees may change their health insurance enrollment to a different health plan that better meets their health care and financial requirements. Every enrollee has at least 10 health plan choices to choose from and most enrollees have many more choices than that. Employees and retirees in the Washington, DC area have 23 plan choices, including high and low option fee-for-service, health maintenance organizations, consumer driven health plans, and high deductible health plans. Open Season begins November 10 and runs through December 8, 2008."

Next: Why not have separate health plans and risk pools for young vs. old, for couples vs. big families, and special rates for people who are healthy and watch their weight and exercise vs. people who aren't or don't or won't.

Nearly Useless Factoid

According to a new study, the secret to a happy marriage is four hugs a day.

To reach me: mcausey@federalnewsradio.com