Average premium rises 6.6%; HSA premiums flat or lower

Washington D.C. – The U.S. Office of Personnel Management (OPM) announced recently that health insurance premiums for 8 million federal employees, spouses, dependents, and retirees will increase by an average of 6.6% in 2006. However, premiums for the various high-deductible health plans that allow for HSAs will remain flat or even fall in cost.

For instance, the Blue Cross Blue Shield Standard Family Plan, one of the most popular, will see a 15% premium increase for employees this year. By contrast, the GEHA high-deductible family plan, one of the most popular HSA options, will see a 3% cut from 2005 levels.

“The choice for federal employees is clear,” said Americans for Tax Reform President Grover Norquist. “You can either pay 15% more and keep nothing, or pay 3% less and keep whatever it is you don’t spend. Government unions may not like it, but HSAs are working.”

HSAs work by combining a health insurance plan that covers catastrophic costs with a tax-deductible, tax-deferred, tax-free savings account to be used for routine medical purchases. Any unused funds can be rolled over year-to-year and job-to-job.

“Health insurance needs to be like car insurance,” continued Norquist. “You don’t tap your car insurance for routine costs like changing the oil or rotating the tires. You use it only infrequently and only in emergencies like accidents and severe breakdowns. You’ll notice no one talks about ‘car insurance inflation.’”

Americans for Tax Reform (ATR) is a non-partisan coalition of taxpayers and taxpayer groups who oppose all federal, state and local tax increases. For more information or to arrange an interview, please contact Chris Butler at (202) 785-0266 or at [email protected].