What's Happening?
Federal employees and retirees are set to experience a substantial increase in health coverage premiums in 2026, with the enrollee share of premiums rising by an average of 12.3%. This marks the second
consecutive year of double-digit increases, following a 2025 hike. The Office of Personnel Management (OPM) attributes these increases to an aging federal workforce and higher prescription drug usage, including medications for weight loss. While some plans will see decreases, such as Kaiser Permanente High in Georgia, others like the Panama Canal Benefit Plan will experience dramatic increases, with premiums rising by 139%. The Blue Cross Blue Shield plans, which cover about two-thirds of federal employees, will also see varied changes, with some options increasing below the average and others above it.
Why It's Important?
The rising premiums have significant implications for federal employees and retirees, affecting their financial planning and healthcare choices. As healthcare costs continue to rise, individuals may need to reassess their current plans to find more cost-effective options. The increase in premiums could lead to a shift in enrollment patterns, with employees opting for plans that offer better value or lower costs. This situation underscores the importance of evaluating healthcare plans during the Open Season to ensure that individuals are not overpaying for coverage they may not fully utilize. The changes also highlight broader trends in healthcare costs and the challenges of managing expenses in an aging workforce.
What's Next?
During the 2026 FEHB Open Season, which runs from November 10 to December 8, federal employees will have the opportunity to compare and select health plans that best suit their needs. This period is crucial for making informed decisions about healthcare coverage, considering the significant premium increases. Employees are encouraged to explore plans where the government pays 75% of the total premium, as these may offer better value. Additionally, individuals should review in-network providers, prescription drug coverage, and unique benefits before making a switch. The upcoming Open Season provides a chance to mitigate the impact of rising healthcare costs by choosing plans that align with personal and family needs.
Beyond the Headlines
The premium increases reflect broader challenges in the healthcare system, including the rising costs of prescription drugs and the impact of an aging population. These factors contribute to the financial strain on both individuals and the government, which subsidizes a portion of the premiums. The situation may prompt discussions on healthcare policy and the need for reforms to address cost containment and improve access to affordable care. As federal employees navigate these changes, there may be increased advocacy for policy adjustments that better support the workforce's healthcare needs.
