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Washington, D.C.—Today’s announcement that health insurance costs for federal employees and retirees will increase an average of 6.6 percent in 2006 certainly represents one of the lowest increases in recent years but for federal workers and retirees the increase is still too high, said the leader of the largest independent union of federal employees.

The Office of Personnel Management (OPM) presented the increase as good news for federal workers but it is yet another year—in a long list of years—where “health care costs for federal workers far exceeds their potential pay raise,” said National Treasury Employees Union (NTEU) President Colleen M. Kelley. In fact, the premiums in some plans will increase by as much as 15 percent.

Kelley said that among the trends OPM reports is increasing numbers of employees and retirees moving to lower-cost plans. But these lower-premium plans can mask hidden costs for federal employees. The cheaper premium is usually coupled with higher deductibles meaning federal workers will simply pay higher out-of-pockets costs or avoid visiting the doctor. “These are not acceptable options,” Kelley said.

The Federal Employees Health Benefits Program (FEHBP) is the nation’s largest group health program covering more than eight million people, and as such, NTEU believes, should be able to negotiate more affordable health care for its enrollees.

“Each year federal employees are forced to shoulder a premium rate hike that is more than their pay raise or risk being without health insurance,” Kelley said. “Sadly I believe that we will soon reach that breaking point for many federal families who will be forced to give up health care coverage because there simply is not enough money in their paychecks to cover the cost.”

This is a situation that is mirrored in the private sector and points to an increasing demand for action to alleviate the health care crisis facing so many American families, Kelley said.

The union leader also expressed concern over the continued pressure OPM is putting on health insurers in the FEHBP to offer Health Savings Accounts (HAS) which combine a high-deductible health care policy with a tax-exempt savings account. In 2006, the number of plans offering HSAs will increase to 21 from 14 such options in 2005.

NTEU has in the past warned that these plans threaten the stability of the FEHBP by drawing in enrollees who do not anticipate high health care costs for that plan year leaving a smaller pool of people in the traditional plans. The smaller pool could trigger even higher health care costs for those federal employees and retirees in those plans.

The significant increase in health premiums for 2006 simply underscores the necessity of providing federal employees with a 3.1 percent pay increase for next year—as NTEU supports—rather that the 2.3 percent the president is seeking. NTEU is also supporting efforts in Congress that would increase the government’s share of FEHBP premiums to an average of 80 percent from the current average of 72 percent.

Kelley also took note of a recent OPM report to Congress in which the federal agency refused to recommend that federal employees be able to continue FEHBP coverage for dependents up to age 25 who are enrolled in college. OPM cited cost as a significant factor for not expanding coverage.

NTEU is the largest independent federal employee union representing 150,000 federal employees in 30 federal agencies and departments.