DOUBLE-DIGIT INCREASES IN FEDERAL EMPLOYEE HEALTH CARE COSTS UNDERLINE NEED FOR HOYER BILL

For Immediate Release:

September 17, 2003

Contact:Stacey Farnen
202-225-3130

WASHINGTON – House Democratic Whip Steny Hoyer (MD) released the following statement today in response to the announcement that health insurance premiums for federal employees and retirees will rise an average of 10.6 percent next year, the fourth consecutive year of double-digit increases:

“The Bush Administration’s announcement that there will be a fourth consecutive year of double-digit increases in health insurance premiums underlines the need for Congress to pass and the president to sign into law legislation that I introduced earlier this year that would increase the government’s share of Federal Employee Health Care Benefit Plan premiums from 72 percent to 80 percent. 

“That the Administration could say that this was great news for federal employees shows just how little regard the White House has for the men and women who make the federal government function effectively.

“This is not great news for federal employees.  Although costs will increase slightly less for federal employees than for private sector employees, they are still being hit by a tremendous increase.  In addition, federal employees generally are paid less than their private sector counterparts for comparable work so this increase will pack a stronger punch.  Lastly, affordable benefits are one of the best ways that the federal government is able to recruit and retain quality employees, these premium increases will weaken that tool.

“My legislation will help counteract rising health care costs and make it easier for federal employees to afford quality health care.  It will also make the government more competitive in the marketplace for employees, which is more important than ever as federal employees comprise a key part of the frontline of the war on terrorism.”

By increasing the government’s share of premiums, the share the federal government pays will be brought more in line with what most private and state employers pay, which is 83.1 percent for single health coverage and 76.2 percent for family coverage, according to the Kaiser Family Foundation.

In 1959, Congress enacted the Federal Employees Health Benefits Program (FEHBP) as a recruitment and retention tool for the federal government to compete in the job market.  For over 40 years, the FEHBP has fulfilled its mission and presently insures over 9 million employees, their dependants, and annuitants.

Unfortunately, the FEHBP has not been immune to sharp healthcare premium increases.  Over the past five years, federal employees have seen their health care premiums increase by over 50 percent, while salaries adjustments have been much smaller.  FEHBP premiums increased 13.3% in 2002, 10.5% in 2001, 9.3% in 2000, 9.5% in 1999, and 7.2% in 1998. 

As a result, FEHBP participants are digging deeper and deeper into their pockets to pay for health care.  An aging federal workforce (the average federal employee is now 46), a longer living retiree population and prescription drug costs are primarily driving FEHBP cost increases.

As calculated by the Office of Personnel Management, the average employee would save approximately $509.08 per year under this legislation.

Congressman Hoyer introduced the same legislation in the 107th Congress (H.R. 1307), which 94 other Members of Congress co-sponsored. 

 

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