September 16, 2003
Enid Doggett
Diane Witiak
(202) 639-6422 or 6421

AFGE President John Gage Issues Statement Responding To FEHBP Premium Hikes

WASHINGTON, D.C.—“Once again government employees and their families will bear the brunt of OPM’s failure to keep health care premiums at affordable rates. In the past six years, premiums have increased by 65 percent and government employees’ costs have gone up by close to 75 percent.

“The 10.6 percent increase cited by OPM is only an average, and not reflective of the true costs many government employees will be forced to pay to retain health care coverage for themselves and their families.

“The truth is that most government employees will experience a 12 percent increase for family coverage and an 11 percent increase for self coverage. The cost to some employees will be much higher as in the case of the Mailhandlers insurance plan which will see the employees’ share of costs skyrocket to 55 percent for the family high option plan.

“OPM likes to say that the fact that employees can move around from plan to plan keeps costs down through so-called competition. Yet even OPM in its most optimistic projections says moving to less costly plans will only slice one percentage point off of the premium increase this year.

“Other large employers in the public and private sector contribute between 85 and 100 percent of the premiums for their employees. Yet, because of the current formula used to calculate federal employees’ costs, the federal government pays only 70 percent of health care premiums.

“It seems like OPM is afraid to sit down with its FEHBP’s insurance carriers and demand lower, more affordable rates. By refusing to harness the purchasing power of the 8.3 million people who participate in this program, OPM is doing a great disservice to all government employees as well as America’s taxpayers.”

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