2011 Health Insurance Premium Rates Going Up

How much will your health insurance cost increase next year? On average, about 7.2%–at least that will be your share of the increase. Here are the details.

The Office of Personnel Management has issued the health insurance rates for federal employees for 2011.

Here is what OPM director John Berry has to say about the new rates:

“Now, for 2011, we have eliminated enrollee cost sharing for preventive care services, added incentives for tobacco cessation, and, in accordance with the Affordable Care Act, added coverage for dependents up to age 26. Even with these new benefits, premiums will rise less this year than they did last year.”

From this, readers will be able to infer several things.

First, there is a rate increase for next year. In fact, the average federal employee will pay an additional 7.2% for your share of federal health insurance premiums next year. OPM implies that this is good news because it is less than the average rate increase last year which was 8.8%. You can decide for yourself how joyous this makes you feel.

And, perhaps this is more good news, it could have been worse. Director Berry notes this rate increase is less than rate hikes predicted for large health benefits programs which are estimated to be between 8.9 and 10.5%.

Second, there are added benefits for next year, which, presumably, is at least part of the reason for the rate increase. In accordance with the new health care bill that passed this year, there is added coverage for dependents up to age 26. There are also no pre-existing condition limitations or waiting periods.

Third, FEHB participants with self-only coverage will pay an average of $5.53 more per pay period and those with family coverage will pay an average of $11.45 more per pay period in 2011. The federal government picks up about 70% of the actual cost of your health insurance premium.

Fourth, those in the Blue Cross Blue Shield Standard Option plan will pay an additional 6.9% in 2011 for self-only coverage and those with self and family coverage will pay an average of 7.6% more in 2011.

Finally, in anticipation of questions from readers, this will not impact your COLA adjustment for 2011. Your COLA adjustment is a calculation compiled automatically based on a CPI index. And, yes, this does mean that retirees will be paying more for their health insurance and will not be receiving an increase in their annuity payment as the COLA increase for next year will be zero. (See What About Your 2011 COLA? Forget About It!)

We will provide more in-depth coverage of next year’s health insurance plan changes next week. We wanted our readers to be aware of some of these more significant changes as soon as possible.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47