Health Insurance Costs to Spike an Average 8 Percent

By Joe Davidson
The Washington Post
September 26, 2008

Health insurance premiums for federal employees will jump almost 8 percent… the Office of Personnel Management announced yesterday.

Premiums for most workers, however, will climb even more next year — about 13 percent — which is the increase for enrollees in the Blue Cross and Blue Shield plans. Sixty percent of federal workers are enrolled in one of the Blue Cross and Blue Shield plans.

Colleen M. Kelley, president of the National Treasury Employees Union, was not impressed. “It is very discouraging to see average increases of this magnitude,” she said, “particularly given the bargaining power OPM should be able to exercise as manager of the nation’s largest group health plan.”

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092502677.html?hpid=sec-business

So you want the health insurance program that the members of Congress have? This is it: the Federal Employees Health Benefits Program (FEHBP). This is the plan that several politicians have supported as an option to purchase in place of your current coverage, if you should no longer want to keep that.

Prior studies have questioned whether FEHBP is an appropriate option for moderate income individuals. The employees’ portion of the premiums plus the out-of-pocket cost sharing is not affordable for them should they have significant health care needs. In fact 100,000 federal employees eligible for FEHBP are not covered by the program, many because they cannot afford their portion of the premiums.

The politicians frequently discuss guaranteeing basic coverage, “without the bells and whistles,” and refer to the FEHBP Blue Cross/Blue Shield plans as a model. The premiums for this basic coverage will increase 13 percent for 2009. 13 percent!

The Office of Personnel Management, the largest purchaser of health benefits in the nation, has been ineffective in containing runaway costs in the FEHBP program. We desperately need a new model of health care financing. It is time to seriously consider adopting a single payer monopsony. Then everyone could have affordable health care.