FOR IMMEDIATE RELEASE September 20, 1999 CONTACT: Michael Orenstein (202) 606-2402 mworenst@opm.gov Plan to Control Health Premiums for Federal Employees and Retirees Announced with Release of Premium Increase for 2000 Washington, D.C. -- The U.S. Office of Personnel Management today announced new initiatives to hold the line on premium increases in the Federal Employees Health Benefits Program, which covers approximately nine million employees, retirees and their families. At the same time, OPM released FEHBP premium rates for 2000. Consistent with increases being experienced by other large employers, the FEHBP includes an average 9.3 percent increase. It is clear that competition in the marketplace has not effectively slowed the growth in FEHBP premiums, said Janice R. Lachance, Director of the U.S. Office of Personnel Management, which administers the health insurance program for federal employees and retirees. We must consider new and bold approaches so we can continue providing affordable, high-quality health care to our employees, retirees and their families. The increases of the last several years are unacceptable, said Lachance. This years rate increase follows a 9.5 percent increase in 1999 and a 7.2 percent increase in 1998. On average, an FEHBP member with self-only coverage will pay $33.04 every two weeks $2.94 more than in 1999. A member with family coverage will pay $71.76, or $7.09 more than last year. Therefore, to control future increases and improve the program, Lachance announced her intention to: raise the quality and cost effectiveness of health plans by raising the standards for participation in FEHBP, and achieve efficiencies and economies of scale by contracting directly for selected benefits. OPM will consult with stakeholders this fall and expects to submit legislative proposals early in the new year. Healthcare costs continue to increase, especially for prescription drugs. Absent aggressive steps by OPM, the overall increases would have been even higher. To counteract the high cost of prescription drugs, members will find that many plans have changed their prescription benefit to encourage the use of mail-order drug purchases and the purchase of generic drugs. In addition, most participants will pay a minimum $10 copayment for all visits to a primary care doctor. Lachance strongly encourages FEHBP members to look beyond a plans premium. Members should review a plans benefits, paying particular attention to prescription drugs, copayments and coinsurance. Each FEHBP member should review their health care needs and select the plan that offers the very best value, said Lachance. OPM makes information about health plans available in both print and electronic formats. This year, the FEHBP open season guides have even greater comparison information about benefits and out-of-pocket costs. Information can be viewed on OPMs web site at www.opm.gov/insure. This year, members can compare health plans by zip code using an interactive web tool. This feature was available last year for users in five states. During the FEHBP open season, which runs from November 8 to December 13, eligible federal employees and retirees can stay with their current health plan or select a new plan. About 300 health plans participate in FEHBP. There are seven, open fee-for-service plans available worldwide. Most members also can select from HMOs and point-of-service plans that are available locally. In the Washington, DC, area, there are 15 plans from which to choose. Forty-three health plans have notified OPM that they are leaving the program in 2000. About 43,000 individuals (less than 1 percent of FEHBP members) must select a new health plan because of the withdrawals. Health plans that leave the program must tell each of their members that they need to select a new plan during the open season. In 2000, the average biweekly premium for self-only coverage is $33.04 for the member and $76.35 for the agency. For family coverage, the average premium for the member and agency is $71.76 and $172.44, respectively. By comparison, the 1999 biweekly rate for self-only coverage is $30.10 for the member and $69.92 for the agency; for family coverage the rate is $64.67 for the member and $157.71 for the agency. A detailed list of individual plan premiums accompanies this release and is available from OPMs Office of Communications at 202-606-2402 and the agencys web site at www.opm.gov. end

Web page created 20 September 1999