NARFE: The Office of Personnel Management (OPM) announced on September 30 that federal employees and retirees enrolled in the Federal Employees Health Benefits (FEHB) and the Postal Service Health Benefits programs will face another significant increase in health insurance costs in 2027. The average enrollee share of FEHB premiums will rise 10.9%, following increases of 12.3% in 2026 and 13.5% in 2025. Over three years, enrollees will have experienced an average premium increase of more than 41%. PSHB premiums will rise 8.2%, following increases of 11.3% and 11.1% in past years, with more than 33% over three years. 

The overall FEHB premium increase is 9.3%, driven by rising prices and utilization for inpatient, physician, outpatient, and surgical services; continued growth in behavioral health care; and higher prescription drug spending, including GLP-1 medications, specialty drugs, and other costly therapies. The government’s contribution will also rise, but the enrollee share is increasing faster. 

NARFE National President William Shackelford expressed concern about the financial impact on federal employees and retirees. He noted that the 2027 increase comes as federal employees also face a proposed pay freeze and significant changes to the federal workforce. In NARFE’s view, higher health insurance costs and other workforce pressures could make it harder to recruit and retain federal employees. 

NARFE also emphasized that the premium increase makes the upcoming Open Season particularly important. Although the higher rates may produce sticker shock, enrollees have choices. Comparing available FEHB and PSHB plans, premiums, benefits and out-of-pocket costs may help employees and retirees identify more affordable coverage for 2027. OPM’s Open Season is scheduled for November 9 through December 14. 

PEN: 33% over three years – something has to give here.