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Federal Diary
FEHBP's Premium Increase And What It Really Means

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By Stephen Barr
Wednesday, September 17, 2003; Page B02

It could have been worse.

That's one of the messages civil service and postal employees and retirees could take from yesterday's announcement that premiums will be going up by an average of 10.6 percent next year in the Federal Employees Health Benefits Program. [Related story, Federal Page, A25.]

"The good news is that the bad news isn't worse," quipped Charles L. Fallis, president of the National Association of Retired Federal Employees.

Kay Coles James, director of the Office of Personnel Management, announced the premium rates for the 2004 enrollment period, which begins Nov. 10. She began her remarks by pointing out that the average increase is less than what many public and private-sector employees are facing next year.

As most federal employees and retirees know, the average increase does not apply to all FEHBP plans. As in the past, the average masks higher rates in some plans, changes in co-payments and deductibles in others, and even benefit reductions in a few.

To get a sense of what the 2004 average increase means for employees and retirees, here's a snapshot of three popular, nationwide fee-for-service health plans. The biweekly rates are what employees will pay.

Blue Cross and Blue Shield. Employees will pay $112.88 biweekly, a 7.3 percent premium increase, for standard family coverage. The biweekly premium for basic family coverage will be $88.99, an 8.2 percent increase.

Steve Gammarino, senior vice president for the Blue Cross federal plan, said basic coverage will eliminate co-payments for pediatric preventive care visits and introduce an "affinity drug program" that will allow Blue Cross enrollees to get an average 20 percent discount on certain prescription drugs not covered by the plan. Those include drugs for sexual dysfunction and weight loss.

Mail Handlers. Family coverage in the high-option plan will cost employees $180.61 biweekly, a 55 percent increase. High-option self-only coverage will be $95.59 biweekly, a 48.7 percent increase.

The Mail Handlers standard family plan will cost $69.81 biweekly, and the standard self-only plan will cost $32.16 biweekly. The premiums for both standard options are up 14.5 percent over the previous year.

Krista Lannert, vice president for FEHBP at First Health, which administers Mail Handlers, said the sizable increase in the high-option plans was partly caused by the departure of about 50,000 enrollees who switched to free Tricare for Life military insurance after a federal rule change made that possible.

Lannert said Mail Handlers has made changes for 2004 that enrollees should find attractive. Among them, no pharmacy deductible for retirees, no deductible for generic drugs and a lower co-pay for children's medical services.

Government Employees Hospital Association. The biweekly premiums for standard family and individual coverage will go up 10 percent. The 2004 rates will be $68.75 for a family and $30.25 for the self-only plan. GEHA's high-option family coverage will be $153.05, up 13.8 percent, and individual coverage will rise a similar percentage, to $76.24 biweekly.

Karen Schuler, a GEHA spokeswoman, said that the plan will cover all medically necessary sonograms during pregnancy and that mental health services will be subject to the same deductibles as regular medical expenses.

These examples, of course, only scratch the surface of FEHBP, which will offer 205 health care options next year, up from 188 this year.

Washington area employees and retirees will have a choice of 17 plans, up from 11 last year.

Frank Titus, an OPM assistant director, cautioned that employees and retirees should pay special attention to health plan brochures listing benefit changes.

"While the average [premium increase] is great, there are plans that are above average and plans that are below average," he said.

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Stephen Barr's e-mail address is barrs@washpost.com.

2003 The Washington Post Company

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