Fedweek

The last time a contract expired to be replaced by a new one, in 2009, there was substantial controversy that may be repeated this year. In that case, premiums increased between 5 and 25 percent effective in March 2010 for enrollees who had chosen the automatic inflation protection option and who had enrolled before age 70 (premiums did not increase for those who had chosen that protection above that age, or who had chosen the “future purchase” inflation option). The increase angered many enrollees who argued that they were led to believe, when they first enrolled, that their premiums never would go up. Some members of Congress echoed those concerns in questioning OPM. (The increases last August didn’t produce the same level of response since they applied only to prospective enrollees, although there was some controversy because OPM provided no prior warning.) OPM replied that there were warnings in its materials and presentations that rates could go up if actuarial projections proved to be off, in light of the enrollment and cost experience in the program. OPM later said that “although materials in the application packages and the benefit booklet have always stated when rates can be increased, in retrospect we realize we could have emphasized this critical information more prominently. We have applied these lessons learned in preparing the new material.” The program booklet currently says this: “Premiums are not guaranteed. Your premium will not change because you get older or your health changes or for any other reason related solely to you. However, your premiums may increase if you are among a group of enrollees whose premium is determined to be inadequate. While the group policy is in effect, OPM must approve the change.”