Fedsmith has posted a perspective on 2018 federal health insurance costs. The FEHBlog respectfully disagrees with the Fedsmith article’s perspective for the following reasons:
- Fedsmith’s article unfavorably compares FEHBP premium increases to other employer sponsored health plans. However, the article does not consider the FEHBP’s unique demographics. The FEHBP’s enrollment breaks down to 50% employees and 50% annuitants and the average age of federal employee — late forties — is substantially older than the average age of most employer sponsored plans. Demographics have a significant impact on benefit costs.
- Fedsmith’s article states that “KFF noted that premium increases for employer-provided health insurance in private industry were similar to the rise in workers’ wages (2.3%) over the same period. For Federal employees and retirees, the experience is different as they cannot expect as large a percentage increase in their income as the percentage increase in FEHB premiums.” The percentage comparison drives the FEHBlog batty. Percentage comparisons are only valid when the you are comparing apples to apples. The employee share of health insurance premiums in total are smaller amounts than salaries or annuities. The percentage comparison is invalid in this situation.
- It should not be forgotten that carriers hold the risk on providing this coverage.
In other news
- The St Louis Post Dispatch offers an interesting report on the prescription benefit manager Express Scripts which has acquired EviCore Healthcare for $3.6 billion. According to EviCore’s website, the company “brings together the broadest range of integrated and innovative intelligent care management solutions delivering intelligent care across the entire healthcare continuum, with a focus on quality healthcare that enables better outcomes for our patients, providers, and plans.” What’s not to like?
- The federal inspectors general have unveiled a joint website called oversight.gov. Check it out.