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Hello everyone. I'm Ian Smith with
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I'm here today to share with you some
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information about the 2026 federal
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employees health benefits program
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um in particular what's driving the
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increases in the amount of premiums as
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well as the impact of these increases on
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one of the more popular plans within the
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FEP and that's the nationwide Blue Cross
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Blue Shield or BCBS plans. So, let's get
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As I'm sure you're well aware, uh it's
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no secret that the cost of health care
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in this country is increasing rapidly.
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And um in the FEB, we've we've seen that
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over the last several years and in the
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last couple of years in particular, the
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FEB has experienced double-digit premium
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increases for two years in a row now.
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Um for the enrollies share of premiums
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the they have experienced a 12.6%
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average increase uh for 2026 and that's
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after a 13.5% average increase last year
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in 2025. Now again that's just for the
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enrolly share of premiums. The total
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average increase in 2026 will be 10.2%
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2% and that factors in the government
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share of the premiums as well, what the
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government pays towards your health
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What's driving these increases? Well,
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this is a list of some of the the likely
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contributing factors. One of them is
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medical cost inflation.
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Hospitals, clinics, and doctors continue
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raising prices to offset higher labor
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and supply costs. Healthc care inflation
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is expected to run roughly twice the
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rate of overall inflation in 2026.
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Prescription drug costs are another
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factor. The increased use of expensive
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specialty drugs, especially new
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treatments for cancer, autoimmune
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disorders, weight loss, to name a few,
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add billions to total program costs.
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Drug spending is the fastest growing
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a greater use of health services. Also,
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more frequent medical visits, new
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diagnostic technologies, and expanded
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coverage for behavioral health and
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virtual care services have all increased
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utilization per enrolly.
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And related to that too, we have um an
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aging population in this country and
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that's true within FEB as well, a
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growing with a growing share of retirees
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and older workers. the FEB population
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uses more health care overall and that
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drives up average claims costs.
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Um, plan mix and contribution formulas,
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the government share of FEB premiums is
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capped at 72% of the weighted average
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So when more participants shift into
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higher price plans, the government
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contribution increases more slowly than
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total costs and that leaves enrolles to
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cover more of the rising costs. I wanted
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to look at the impact of the increasing
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premiums on the BCBS nationwide plans.
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um there are three plan types offered
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within this. the FEP Blue Focus, the FEP
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Blue Basic and FEB Blue Standard, and
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the FEP Blue website, which is
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has more information about these plans.
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According to the website, the blue basic
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plan, has been the most popular choice
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within the FB for over 15 years now. I
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put together some tables that illustrate
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the premium increases from 2025 to 2026
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for these uh BCBS plans. The figures
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that I'm including here are for again
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for the enrolly share of premiums only.
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And you can see that among the self plan
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type, the FEP blue basic plan has the
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In looking at the self and family plan
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type, again, the blue basic plan has the
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largest increase while blue standard has
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the lowest. And I should mention quickly
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also if you find uh that you want to
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study any of these slides in more
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detail, then please pause this video
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during playback if you need more time to
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read them longer. And the self plus one
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plan type, the same is true as well. uh
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it had uh as in the others the the basic
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the FEP basic had the highest increase
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of the the three plans as you can see
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here. Now this last table's a little bit
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different. It provides a breakdown of
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the average increases for each
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enrollment type and plan option from
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Not surprisingly, Blue Basic had the
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highest average increase again across
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the three plan types. But the average
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increases among the three plan type
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options was pretty evenly distributed.
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As you can see, despite the significant
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annual increases in premiums, the FEB
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program remains a very valuable benefit
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for current and former federal
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employees. And these are a few reasons
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as to why the government contribution I
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mentioned briefly earlier. The federal
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government continues to pay on average
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about 70 to 75% of the total premiums
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which protects enrolles from even higher
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costs. If you go to the OPM website and
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you download the um the premiums for any
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given year, they have spreadsheets that
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detail the costs of each of the plans in
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the FEB and it's broken out by the
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enrolly share, the government share,
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bi-weekly amount, etc.
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And you can see the government's picking
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up a significant portion of those costs.
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I mean, imagine if you had to pay the
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enrollies share plus what the
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government's paying. That would be much
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more expensive. So, so that is a very
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valuable contribution that the
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government's making. Also, the extensive
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number of plans. Enrollies can choose
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from dozens of nationwide and regional
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options during each open season, which
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helps to keep the prices competitive
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Um, there's also guaranteed coverage and
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portability. FE FEB offers lifelong
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eligibility into retirement with no
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medical underwriting, a benefit that's
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rarely found in the private sector. and
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the comprehensive benefits. All FEB
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plans include preventative care, mental
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health services, and prescription drug
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coverage, which meet or exceed a the ACA
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standards. That's the Affordable Care
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And these are some general tips that can
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be helpful when choosing FEB plans.
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It's important to review your current
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plan and any other available plan
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options available to you each year to
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see what's going to best meet your
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needs. You can eliminate unsuitable
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health insurance plans by checking
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availability and deciding on plan type,
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for example, HMO versus PO. Also, you
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might consider a high deductible plan in
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conjunction with a health savings
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account. That's an HSA for young younger
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healthier individuals.
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whereas a PO or an HMO might be better
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for those with regular medical needs.
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You also want to make sure that your
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desired plan covers your doctors and
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prescriptions. If not, those would
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probably be ones you'd want to end up
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And also be sure to plan for known costs
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in the coming year. For example, if a
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pregnancy or a surgery that you know
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you're going to have, you want to ensure
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the plan you choose will meet uh your
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medical needs for the coming year. And
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planning advance for any known costs is
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one way to to do that.
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And also remember to use available
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Um, one that that you may want to check
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out, uh, the checkbook guide to FEB
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plans is a useful resource. That website
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is checkbook.org. It provides reviews of
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FEB plans. It is a subscription-based
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service. However, some agencies provide
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for their employees. And the checkbook
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website has a listing of agencies that
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offer access or your agency should be
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able to tell you also if it has a
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subscription available that you can use.
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The OPM website is another good
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It has listings of all the FEB plans,
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info and premiums and comparison tools.
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and as one other thing to check is the
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insurers's website. I mentioned uh the
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plans that I discussed here today, the
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um the the BCBS plans, the Blue Cross
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Blue Shield. That website was fblue.org
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and it's got a lot of information about
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each of those plans on it.
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Um I've also included links in the
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description below uh to some related
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articles on fedsmith.com that you may
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find helpful. And lastly, just an
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important reminder, the FEB open season
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runs from November 10th to December 8th,
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That's coming up very quickly. I'm
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recording this on November 3rd. So,
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federal employees and retirees will have
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the opportunity to choose their federal
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benefits for the 2026 plan year during
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the open season for health, dental,
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vision, and flexible spending account
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benefits during this time. You can visit
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the OPM website for more information.
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So, thank you very much for watching
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today. I hope you found this information
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helpful. And again, I've included some
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links in the description to articles
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with some additional details. Thank you
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and have a good day.
