Larry Humphreys, a retired Federal Emergency Management Agency worker in Moultrie, Georgia, says he and his wife won’t be traveling much next year after their monthly health insurance premium payment increases more than 40%, to $938.
Humphreys, 68, feels betrayed by the Federal Employees Health Benefits Program. “As federal employees we sacrificed good salaries in the private sector because we thought the benefits from government would be better now, in retirement,” he said.
As the nation’s largest employer-sponsored health insurance program, the FEHB Program covers more than 8.2 million federal government employees and retirees, and it was once celebrated as a national model for controlling costs while giving enrollees many health plan options.
But next year, average enrollee premium payments in the system are set to jump more than 12%, on top of a 13.5% hike in 2025. The two-year increase is higher than what many private employers and their workers are experiencing.
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The FEHB rate hikes are similar to those for plans sold on the Affordable Care Act exchanges — excluding the government subsidies most enrollees get, a major point of contention on Capitol Hill. The premiums insurers charge for Obamacare plans are rising 26% on average for 2026, following a 4% increase this year.
What’s making the latest hike in FEHB premium payments even harder to stomach for millions of federal employees is its timing: The 2026 increase was announced in October, when many federal workers were on unpaid furlough during the 43-day government shutdown.
Unlike most private employers, the FEHB Program gives its enrollees numerous health plans to choose from. That allows some people to lower their monthly premium payments by switching to plans with higher deductibles or copayments. But each year only about 5% of enrollees switch plans, according to the Office of Personnel Management, which oversees the program.
Humphreys, who has stayed with the same health plan for decades despite steadily higher prices, said it’s difficult determining which plan is best based on their health conditions. He has glaucoma and diabetes, and his wife, Julianne, has faced heart issues.
Their FEHB plan covers costs for their care not covered by Medicare, which typically pays 80% of their health bills.
“There’s a fear that if you do something and change plans and it’s wrong, you could be in a bad spot,” he said.
Open enrollment for federal employees and retirees runs through Dec. 8.
Among the factors causing premiums to increase, according to OPM, are an aging federal workforce with more chronic conditions, as well as prescription drug use, including pricey GLP-1 medications for weight loss.
About 42% of federal employees are over the age of 50, compared with 33% in the general workforce, OPM says. About 7% of federal employees are under the age of 30, compared with about 20% of workers overall.
OPM officials said the Trump administration’s policies aimed at lowering drug costs and focused on prevention of costly medical conditions will hopefully help it control premiums in the future.
“None of these initiatives of course will happen overnight – turning a $79 billion ship takes slow and steady progress,” Shane Stevens, OPM’s associate director for health care and insurance, said in a news release. “But, we are committed to improving the quality of life and quality of care for our members while also ensuring that healthcare remains accessible and affordable for those who work (or have worked) for the American people.”
OPM didn’t respond to requests for comment.
John Holahan, a health policy fellow at the nonpartisan Urban Institute, said OPM’s explanation left out a key reason for rising premiums: hospital consolidation. While the FEHB Program is a collection of health plans, in many markets — including the Washington, D.C., area — those insurers must negotiate with a handful of powerful health systems that have bought up other hospitals and doctors. That market power enables them to drive prices higher on FEHB plans, he said.
Jacqueline D. Bowens, president and CEO of the D.C. Hospital Association, said in a statement that “the costs borne by patients are not determined solely by the care they receive, but by how insurance companies choose to price, reimburse, and restrict access to that care.”
Holahan said it’s surprising that FEHB premiums are rising even faster than those of other, smaller employers. But he is not surprised federal employees don’t switch plans more often, even when it may be in their financial interest.
“It’s that people find the health care world so complicated,” he said. Holahan, a noted health economist, said he, too, finds it daunting to switch Medicare health plans.
Mike Lindquist, a scientific review officer for the National Institutes of Health, said he’s not happy with the rise in his premium payments the past two years. “It’s tough, as it’s a big expense.”
Lindquist, 43, who lives in Brunswick, Maryland, has been on the same Blue Cross and Blue Shield plan through the FEHB Program the past few years even though he evaluates his options each fall.
“By not switching, you don’t have to worry about choosing a new plan that might not take your practitioners,” he said.
Jonathan Foley, a health consultant who worked as a senior adviser at OPM during the Biden administration, said premium increases will be a hardship for many enrollees. While the FEHB Program offers 200 health plans in total, with about 10 to 20 in each geographic market, enrollment is concentrated in just a handful of Blue Cross and Blue Shield plans.
“This concentration reduces competition and gives outsize influence” to rate increases by Blue Cross and Blue Shield, Foley said in an email.
He said the FEHB Program also faces higher costs because it requires its health plans to cover GLP-1 medications, such as Wegovy and Ozempic. Nationally, fewer than half of large employers offer this benefit, according to the Peterson Center on Healthcare and KFF. KFF is a health information nonprofit that includes KFF Health News.
Another cost pressure has been more members using behavioral health benefits to treat depression and anxiety since the start of the covid pandemic, Foley said.
The Trump administration’s federal workforce reductions also have contributed to cost increases, Foley said. OPM has lost about a third of its employees in the past year, leaving fewer workers to oversee the FEHB Program and negotiate with dozens of health insurers, he said.
“The workforce reductions and the unpredictable nature of policymaking in the Trump administration has created considerable uncertainty among health insurance carriers,” Foley said. “The response of actuaries to increased uncertainty is to raise rates.”
A Government Accountability Office report this year found that recent OPM staffing vacancies led to a suspension of fraud risk assessments in the FEHB Program.
John Hatton, staff vice president for policy and programs at an advocacy group called the National Active and Retired Federal Employees Association, said higher prices mean it’s critical for FEHB members to shop and compare plans for next year. “The program was designed to promote competition to mitigate and drive down costs,” he said.
Hatton said OPM surveys show the main reasons people don’t change plans is they are overwhelmed by their options and worried about making a mistake. Switching to a plan with even a slightly higher deductible, he said, could save people a few hundred dollars a month on premiums.
But Humphreys, the Georgia retiree, said he likes that his current plan comes with low out-of-pocket costs for him and his wife. They owed little money when his wife suffered a kidney stone infection and sepsis, which put her in the hospital for 12 days.
That reassurance will soon come at a higher cost: Their FEHB and Medicare premiums will take up more than half of his pension check next year after accounting for taxes.
“I can take a lower-premium plan, but it’s a gamble I am not willing to take,” he said.
