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2023 FEHB Premiums to Increase by 7.2%

2023 FEHB Premiums to Increase by 7.2%


By Ian Smith

The Office of Personnel Management (OPM) has released the 2023 FEHB premiums for the Federal Employee Health Benefits Program (FEHB) and the Federal Employees Dental and Vision Insurance Program (FEDVIP). The total average increase for the 2023 FEHB premiums for current non-postal federal employees and federal retirees will be 7.2% next year. In 2022, the overall average premium increase was 2.4%. However, the overall average increase for the FEHB enrollees’ share of the premiums will be considerably higher. The share of FEHB premiums paid by federal employees and retirees will increase by an average of 8.7% in 2023. In 2022, it was 3.8%.

Under FEDVIP, the overall average premium increase for dental plans will be 0.21%, and the overall average premium for vision plans will actually decrease by 0.41%.

The premium increase is not a huge surprise given that inflation in 2022 has been increasing rapidly, often at double digit rates. According to the last inflation update from the Bureau of Labor Statistics (BLS), inflation has risen 8.3% over the last 12 months. It was 1.2% just two years ago. While 8.3% is bad enough, it is much higher in some categories. At home food prices are up over 13% and gasoline prices are up almost 26% in the same time period according to BLS data.

In other words, an overall average 2023 FEHB premium increase of only 7.2% is probably good news given the current state of the American economy.

OPM said that during the pandemic, there was a historically low use of elective benefits under FEHB which hold the premiums to an average increase of just 2.8% over the last four years. However, now that life has returned to more normal circumstances, health insurance costs have resumed their typical fast upward trend.

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