Familiar Problems Blamed

GAO laid most of the blame for FEHB premium increases of recent years on factors often cited for driving up costs in the program, primarily increasing expenditures for prescription drugs and hospital outpatient care, which together accounted for more than 70 percent of the increase. “Increasing plan payments per drug dispensed accounted for most of the increase in expenditures for drugs, while increasing utilization accounted for the increase in hospital outpatient care expenditures,” it said. Physician visits and hospital inpatient care accounted for most of the rest of the increases. Among the three largest plans, per-enrollee claims expenditures increased by 12.6 percent from 1998 to 2000, GAO said, adding that “increased utilization was in part associated with FEHB’s aging enrollee population,” which now averages 62.1 years old. GAO also noted that plans have been required to cover certain new benefits in recent years.