Changes in health insurance cost


Q. My December federal retirement take-home pay was $1,609.11. My January federal retirement take-home pay was $1.645.66. My February federal retirement take-home pay was $1,511.67. My take-home pay was reduced by $133.99. In my 15 years of retirement pay, I have never seen this much taken for medical at once.  For the past few years, my take-home pay has continued to reduce. Inflation is not keeping up with medical costs. What’s going on?

A. All plans in the Federal Employees Health Benefits program are experience-rated. This means that the premiums in the current year are based on an analysis of the premiums the plan took in versus the expenditures it made to pay enrollee claims. While sometimes a plan’s premiums go down, they often go up. To find out if the change you experienced is the result of increased plan premiums, go to and check the rates for 2012 and 2013.

The only way you can moderate the effects of premium increases is to shop around among the many plans in the FEHB program and find one that meets your needs but has lower rates. One of the benefits of the FEHB program is that you can change plans during any open season.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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