Paying for Health Care
Government workers who think they pay a lot now for health insurance will remember 1995 as the good old days.; A change tentatively approved by Congress would raise premiums for workers and retirees, hitting them much harder than another proposal that has gotten all the attention. That proposal would base annuities on an employee's highest five-year average salary, instead of the current system of using the highest three-year average salary.</br></br>Most federal workers can offset the effect of the change from the so-called high-three to high-five simply by working a little longer. The formula would change incrementally, to high-four in January and then to a high-five system for people retiring in 1998 and thereafter. On the other hand, if the insurance formula is changed, there is nothing workers or retirees can do -- except move to a less expensive, less comprehensive plan -- to escape higher premiums.</br></br>Congress is almost certain to approve a formula change that puts a limit on the government's share of health care premiums for employees and retirees. The kicker is that the limit would rise based on the national inflation rate -- which has been running at or less than 3 percent -- while premiums would rise based on medical inflation rates, which have been running at 7 percent to 8 percent a year over the last decade.</br></br>The government now pays about 72 cents of every premium dollar, a little more or a little less depending on the plan and option workers choose. Blue Cross-Blue Shield's popular standard-option plan costs $81.33 biweekly. The government pays $61 toward that premium, and workers pay $20.33. For HealthPlus, a popular health maintenance organization, the government pays $44.94, and the employee pays $14.98 of the $59.92 biweekly premium.</br></br>That cost-sharing mix will change fast. Next year, thegovernment will pay a flat $1,535 toward the single premium and $3,400 for a family plan. Each year after 1996, that dollar amount will be adjusted according to the Consumer Price Index, which measures inflation. The rate was 2.6 percent in 1994, 3 percent in 1993 and 1992, 4.2 percent in 1991 and 5.4 percent in 1990.