Hoyer Re-Introduces Bill to Lower Federal Employee Health Insurance Costs

WASHINGTON - House Democratic Whip Steny Hoyer (MD) reintroduced legislation this week to increase the government's share of Federal Employee Health Care Benefit Plan premiums from 72 percent to 80 percent.  Hoyer was joined in reintroducing the bill by a bipartisan group of 46 members including Congressman Frank Wolf (R-VA).
 
“Federal employees need relief from the rising costs of health care,” said Congressman Hoyer. “These men and women work everyday to keep our country safe and this legislation will help them afford quality health care, even as costs continue to skyrocket.
 
“In order for taxpayer dollars to be spent efficiently and effectively, the government must be able to attract and retain quality employees.  This bill will help make the government more competitive in the marketplace for employees,” Hoyer concluded. 

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 10.6 % in 2004, 11.0% in 2003, 13.0 % 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 108th Congress (H.R. 577), which 66 other Members of Congress co-sponsored.

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