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The FEHBP, the biggest employer health insurance plan in the US, is supposed to cover 8.5 million individuals, including retirees, government workers, and their families. The primary benefit of the program was that it gives federal employees and retirees the peace of mind that they are shielded from expensive out-of-pocket medical expenses.
But we are witnessing some changes in practices in the FEHB program. The employees or FEHB enrollees pay out-of-pocket costs for their health care regardless of their FEHB health insurance. According to an Employee Benefit Research Institute report, the recent trend in health insurance that has been a sore point for FEHB enrollees is rising out-of-pocket expenditures for healthcare services. Let me decipher more about the findings of Employee Benefits Research on Federal Employee and Retiree health benefits plans.
Increase in Insurance Premium Paid By FEHB Enrollees
The health plan of federal employees includes a health premium which is, on average, increasing rapidly. The average rise in health insurance costs for federal employees and retirees in 2022 will be 3.8 percent, less than the previous year. However, due to increased inflation rates, it still significantly decreases the remaining pay for federal workers nationwide. Between 2002 and 2020, the average deductible for individuals with employee-only coverage grew from $650 to $1,945, and for those with family coverage, it climbed from $1,395 to $3,722.
According to the EBRI report, rising out-of-pocket expenses have been a general trend in the healthcare industry. People with health coverage via their workplace frequently pay more out of cash for healthcare services than they did previously. In certain situations, they have claimed that the OPM artificially cut premiumsâ€”which receive the greatest attentionâ€”by permitting plans to transfer costs to out-of-pocket expenses.
Increase in Copayments and Coinsurance Rates
Besides, copayments have also been rising. The average office visit copayment has risen from $22.30 in 2002 to $26.90 in 2020. Coinsurance rates for office visits rose relatively slowly. Still, because coinsurance requires plan members to pay a portion of the fee, out-of-pocket coinsurance payments rise in tandem with office visit expenses.
According to the research, despite this growth, the proportion of individuals with past-due medical expenses has remained relatively consistent since 2015. But inflation hikes will, in all circumstances, eventually lead health care expenses to grow as well. It is only a matter of time until the percentage of previous-due medical bills rises.
In a Nutshell
Federal employees and retirees are getting health care benefits through health insurance from the government. Still, they are being looted in the form of extra out-of-pocket costs for their health care services. The overall health insurance premium is also increasing, decreasing their remaining salary. During this rising inflation trend, it is difficult for them to cover the cost of their bread and butter.
Bill and his associates of Faith Financial Advisors have over 30 years’ experience in the financial services industry.
He has been a Federal Employee (FERS) independent advocate and an affiliate of PSRE, Public Sector Retirement Educators, a Federal Contractor and Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants.
Bill will help you understand the FERS Benefits and TSP withdrawal options in detail while also helping to guide you in your Social Security choices.
Our primary goal is to guide you into your ment with no regrets; safe, predictable, stable and for life using forward thinking ideas and concepts.
> Financial Services consultant since 1984
> FERS independent advocate and an affiliate of Public Sector Retirement Educators (PSRE), a Federal Contractor and Registered Vendors to the
> Affiliate of TSP Withdrawal Consultants
> His goal is to guide individuals into retirement with safe, and predictable choices for stability using forward thinking ideas and concepts.