Increase in Out of Pocket Costs Not Just an FEHB Phenomenon

Increase in Out of Pocket Costs Not Just an FEHB Phenomenon

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One trend in health insurance of recent years that has become a sore point for FEHB enrollees, increases in out of pocket costs, is common to health-care programs in general, according to an Employee Benefit Research Institute study.

While FEHB premium increases traditionally have been in line with those of health-care programs offered by state governments and other large employers, federal employee organizations also point out the increases in fees and charges in that program. In some cases they have suggested that the OPM has artificially lowered premiums—which draw the most attention—by allowing plans to shift costs to the out of pocket side.

The EBRI study said, though, that increasing out of pocket costs has been an overall trend in the health care sector and “workers with health coverage through their job often pay more out of pocket for health care services than they did in the past.”

“For example, a greater number of workers have a deductible as part of their health plan. And among individuals with a deductible, the average deductible has been increasing. Between 2002 and 2020, the average deductible increased from $650 to $1,945 among those with employee-only coverage, and it increased from $1,395 to $3,722 among those with family coverage,” it said.

“Copayments have been increasing as well. The average copayment for an office visit increased from $22.40 in 2002 to $26.92 in 2020. Coinsurance rates for office visits increased more modestly, but since coinsurance requires plan participants to pay a percentage of the charge, out-of-pocket payments for coinsurance increase with office visit costs,” it said.

The report said that despite such increases the share of adults with past-due medical bills has been about stable since 2015. But it added: “Inflation increases will, in all likelihood, eventually cause health care costs to increase as well. It may just be a matter of time before the prevalence of past-due medical bills increases.”

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