The 2025 federal health benefits premium rates are now public information.
According to the Office of Personnel Management (OPM), 2025 biweekly maximum government contribution for most employees and annuitants (72% of the weighted average) is $298.08 for Self Only, $650.00 for Self Plus One, and $714.23 for Self and Family. The monthly maximum government contribution (72% of the weighted average) is $645.84 for Self Only, $1,408.33 for Self Plus One, and $1,547.50 for Self and Family.
The total average increase for the enrollees’ share of the 2025 FEHB premiums for current non-postal federal employees and federal retirees will be 13.5% next year. In 2024, the average premium increase was 7.7%, and it was 8.7% in 2023.
FEHB Premium Increases Since 2016
Here is how the average annual increases for the FEHB enrollees’ shares have fared since 2015.
The total average increase is the total average annual increase for the FEHB premiums. This reflects an increase in the government’s share of premium costs as well as the enrollee’s share of premium costs.
| Year | Enrollee Share | Total Avg Increase |
| 2025 | 13.5% | 11.2% |
| 2024 | 7.7% | 5.8% |
| 2023 | 8.7% | 7.2% |
| 2022 | 3.8% | 2.4% |
| 2021 | 4.9% | 3.6% |
| 2020 | 5.6% | 4.0% |
| 2019 | 1.5% | 1.3% |
| 2018 | 6.1% | 4.0% |
| 2017 | 6.2% | 4.4% |
| 2016 | 7.4% | 6.4% |
OPM announces an average increase in insurance rates every year, and some FEHB participants comment that their increase is much higher than the announced average. That does not mean the person commenting is incorrect.
It also does not mean that the OPM math is incorrect. Some plans have raised their rates more than others. If that happens, it may be a good time to check for a plan with lower rates. This year, the open season for changing health insurance will run from November 11th to December 9th.
For comparison, American employers expect health insurance costs to rise an average of 5.8% in 2025. The increase is attributed to the increased cost of medical services and higher use.
2025 is projected to be the third consecutive year in which healthcare costs for employers rise by more than 5%. During the previous decade, costs increased an average of 3%.
In effect, the FEHB premium increases are going up more than some other plans.
Some of the comments from FedSmith readers triggered a distant memory of similar comments in the past. Here is an excerpt from a FedSmith article in 2002 about the rapid increase of health insurance premiums for the federal workforce:
The continuing yearly double-digit increases aren’t unexpected. George Nesterczuk, former Staff Director of the House Civil Service Subcommittee warned two years ago that OPM was creating a Cadillac of health plans by inserting new requirements into plans rather than giving employees a choice of plans with fewer benefits.
Presumably, the plan announced by OPM Director (Kay Coles) James will be looking at whether these mandates should be retained and possibly offering plans with fewer options as a way of holding down the surge in benefit costs.
The situation described by George Nesterczuk has not changed. OPM is still routinely adding new treatments or services to the FEHB.
In 2002, OPM’s plan for reducing future premium costs was:
- OPM Director meeting with OPM’s negotiating team to encourage tough negotiations with carriers on behalf of FEHB enrollees
- Challenging health carriers to contain costs and maintain benefits
- Performing an independent audit to look at the cost of all types of mandates on healthcare
- Collaborating with OPM’s Inspector General to end fraud and waste in the program
Creating a Cadillac Health Plan
In 2025, the FEHB will offer a choice of In vitro fertilization (IVF) (three cycles annually) and coverage to every FEHB enrollee in every county in the U.S. The estimated average cost per IVF cycle is about $12,000, according to the American Society for Reproductive Medicine (ASMR). These treatments can wind up costing as much as $25,000 or more.
While data are hard to come by, more than 40% of those in the FEHB are likely retired. In 2022, about 2% of births in the U.S. resulted from IVF.
The FEHB’s coverage of IVF treatments will be very valuable to a small percentage of FEHB enrollees. However, the cost of the treatments will raise everyone’s premiums.
In 2023, OPM announced that it expects FEHB carriers to propose enhanced coverage of services related to treating gender dysphoria in their benefit and rate proposals for the upcoming plan year. The percentage of people who will use these treatments and are covered by FEHB will likely be small. For teens ages 15 to 17 and adults ages 18 and older, the rate of undergoing gender-affirming surgery with a transgender dysphoria-related diagnosis was 2.1 per 100,000 and 5.3 per 100,000, respectively.
According to Verywell Health, “The cost of transitioning can often exceed $100,000 in the United States, depending upon the procedures needed.”
These are just two examples. Adding procedures can significantly impact the cost of health insurance premiums. Some of these additions may cost an insurance company a lot of money, but everyone in the program will pay the cost in the form of higher premiums.
Of course, singling out plans that provide these expensive surgeries would probably dramatically increase the cost of insurance for those using the services as a much smaller portion of the FEHB population would be paying for the procedures. But, as Nesterczuk warned OPM in 2000, “OPM was creating a Cadillac of health plans by inserting new requirements into plans rather than giving employees a choice of plans with fewer benefits.”
While these are expensive additions, according to OPM, the cost increases for 2025 are due to the impact of price increases by providers and suppliers, increased utilization of certain prescription drugs, and behavioral health spending. OPM also notes that the 2025 FEHB premium increases generally align with those in the commercial market.
The challenge in 2002 was to balance healthcare costs with benefits. Perhaps that should be the challenge in 2024.
