OPM advises paying attention to the Family vs. Self-Plus One Rates in FEHB

This article was originally published here

OPM has urged agencies to inform their staff that some rates for self-plus-one coverage in the FEHB program will again be more expensive in 2023 than those for family coverage.

According to a statement from OPM to agency benefits offices, this will be the case in three national plans—the NALC Health Benefit Plan, Foreign Service Benefit Plan, Rural Carrier Benefit Plan—as well as about 80 regional plans out of the 271 that will take part in the 2023 plan year.

While there is no cap on the number of people who may be covered under family coverage, again provided they are eligible, under self plus one, an enrollee only covers one additional person (who must be eligible under family coverage rules, which for the most part means spouses and children under the age of 26).

With only self-only or self and family options available at the time, self plus one was added to the program ten years ago on the theory that by being required to enroll in family coverage, people with only one eligible family member to cover—a married couple without any eligible children or single parents with one eligible child—were subsidizing the program enrollees with over one, and that premiums for self plus one would be lower.

This has mainly been demonstrated to be the case. Still, there has been an anomaly in some plans every year since self plus one has been shown to attract a disproportionately high enrollment of older couples without children who are likely to use more medical care than the program’s typical consumer. Each of the three coverage alternatives is expected to be self-funding within a plan under the FEHB program’s framework, with no cross-subsidies.

“Enrollees should carefully review the rates of their existing plan for 2023 and any alternative plan options they are contemplating. Open Season, which runs from November 14 through December 12, is the only time registrants may make changes,” according to OPM’s letter.

Why the increase in Self Plus One rates?

According to John O’Brien, director of health care and insurance at OPM, “There is a limit on how much the government will pay towards the cost of a Self Only, Self Plus One, or Self and Family enrollment.”

The government pays either the maximum contribution or 75% of the total premium, whichever is smaller, and the enrollees cover the balance. This computation may, in some circumstances, result in a higher enrollee share for a Self-Plus One enrollment than a Self and Family enrollment, such as plans with premium costs that are higher than the program average.

As previously mentioned, one reason for the increase is that healthcare for elderly folks is costly. Older couples with older kids often choose Self-Plus One plan. And they require significantly more medical attention than younger people. Thus insurance is more expensive for them. Family coverage may be priced reasonably since children and younger adults use fewer services and are less costly to cover than granny and grandpa. 

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