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Higher Premiums, Fewer Insurers Mar 2000 Federal Health Plan

By Douglas J. Gillert
American Forces Press Service

WASHINGTON, Oct. 29, 1999 – The Office of Personnel Management hasn't been able to keep the lid on cost increases to the Federal Employees Health Benefits Program, which will rise an average of 9.3 percent this year.

As OPM frets over how to control the rising cost of health insurance for the nations' millions of federal employees, it also has seen 43 insurers from last year's plan drop out. Officials said the dropouts will affect more than 40,000 civilian employees who will have to find a new carrier for 2000.

These changes were announced as the FEHBP open season, which runs Nov. 8-Dec. 13, drew near.

"It is clear that competition in the marketplace has not effectively slowed the growth in FEHBP premiums," said OPM Director Janice R. Lachance. OPM administers the health plan for federal employees and retirees. "We must consider new and bold approaches so we can continue providing affordable, high-quality health care to our employees, retirees and their families."

Lachance said the increases this year and the past two years are unacceptable. This year's rate increase follows a 9.5 percent increased in 1999 and a 7.2 percent increase in 1998. To control future increases and improve the program overall, Lachance said OPM will submit legislative proposals early next year to improve the quality and cost effectiveness of health plans by raising the standards for participating health insurers. She also hopes to make the plan more efficient.

Lachance was scheduled to discuss improvements during a panel discussion at the American Association of Health Plans quality and information conference in Palm Springs, Calif., Oct. 29. She was expected to address customer service, quality care and value-based purchasing with association members. Based in Washington, the association represents more than 1,000 health maintenance organizations, preferred provider organizations and other network-based plans.

No reason was given for the 43 insurers that dropped out of the plan for 2000. However, OPM said the insurers were required to notify their members that they need to select a new plan during the open season.

"Military Report," an on-line newsletter posted a list of the dropouts on the Internet its Sept. 23 edition at www.militaryreport.com/healthins.htm.

In 2000, biweekly premiums will average $30.10 for individuals and $64.67 for families. All participating insurers and premiums are listed on the OPM Web site at www.opm.gov/insure/00rates/index.htm.

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