The FEHBlog has received a few comments from readers who are dismayed over the fact that the enrollee contribution for the new self plus one coverage is more than the enrollee contribution for self plus family coverage in certain plans. There is no such thing as a good surprise. The Washington Post advises that
[E]nrollees should check premiums carefully before electing self plus one, officials said. While the total premium costs are capped at the amount for family enrollments, because of the way the premium sharing formula works, in about 5 percent of plans the enrollee share for a self plus one enrollment will be higher than that for a family enrollment.
The Business Insurance article notes that
Escalating prescription drug costs, as has been the case for many private-sector employers, are a key factor in the sharp rise in premiums. “One contributing factor to the somewhat higher FEHB premium increase than in the past several years is an uptick in the growth of drug costs. Drug costs are a much larger factor for the FEHB compared to most other employer-sponsored programs because annuitants, for whom drugs are the majority of benefits, are included in the FEHB risk pool. Drugs represent 26.5% of program costs versus 10% for a typical employer,” OPM said in a statement.
FEHBlog readers should know that rising drug costs are a real problem for all health plans inside and outside the FEHBP. The major actuarial consulting firm Milliman reports that “Prescription drug costs spiked significantly, growing by 13.6% from 2014 to 2015.” However, pooling employees and annuitant medical costs together is a saving grace of the FEHBP. The FEHBP’s percentage of drug benefit costs in relation to total costs would be in line with other employer plans if it weren’t for the fact that Medicare pays the bulk of hospital costs for Medicare eligible FEHBP annuitants.