Federal employees and retirees in the Federal Employees Health Benefits (FEHB) program will once again see health insurance premiums rise next year.

Starting in January, FEHB participants will pay an average of 10.9% more toward their health insurance premiums.

The Office of Personnel Management published information Wednesday about plan options and premium rates for 2027, ahead of the upcoming Open Season.

The rising premium rate for 2027 marks the third year in a row of double-digit premium increases in FEHB. For 2026, enrollees began paying an average of 12.3% more toward their health insurance premiums. FEHB participants also saw an average of a 13.5% increase for the 2025 plan year, a 7.7% increase in 2024 and an 8.7% increase in 2023.

For 2027, enrollees in the Postal Service Health Benefits (PSHB) program will be paying an average of 8.2% more toward their premiums. It follows an average increase of 12.3% for 2026, and 11.1% for 2025.

Premiums for federal health insurance programs inevitably increase each year. Some plan options will have smaller cost increases, while others will have bigger ones. The federal government covers about 75% of FEHB and PSHB participants’ health insurance premiums, and no more than 72% of the weighted average of the previous year’s premiums.

When accounting for the government’s share of premium costs, FEHB rates are increasing by 9.3% and PSHB rates are increasing by 6.7% overall.

OPM attributed the rising premiums to a combination of factors, including increasing prices in inpatient, physician, outpatient and surgical services, as well as spending on prescription drugs such as GLP-1s.

OPM Associate Director for Healthcare and Insurance Matthew Kiley emphasized that the average premium increase is tracking downward compared to previous years.

“For the second year in a row, OPM has been able to reduce the average rate of premium increases for federal employees and annuitants,” Kiley said in a press release. “This is just the start of a more comprehensive set of programs to ensure that we deliver great health plan options to our enrollees while preventing them from getting priced out of the market.”

Premium rates are also climbing in the Federal Employees Dental and Vision Insurance Program (FEDVIP), albeit to a smaller extent. OPM announced that premiums will rise for dental plans by an overall average of 1%, while vision plans will go up by 1.6%.

The upcoming premium increases come as President Donald Trump is planning to implement a pay freeze for most General Schedule employees in 2027.

“With federal employees facing a proposed pay freeze for 2027 and increased workloads due to a more than 10% downsizing of the federal workforce in 2025, news of substantial premium hikes further erodes the appeal of federal employment,” said William Shackelford, national president of the National Active and Retired Federal Employees Association (NARFE). “I worry how the cumulative impact of rising costs and damaging workforce policies will impact the ability to recruit and retain the workforce needed to meet the nation’s needs and serve the public interest.”

“These increases are unwanted news that will cause sticker shock for federal and postal employees and retirees across the country,” Shackelford continued. “But enrollees have options. That sticker price may not be the final price if you compare plans and shop for a more affordable alternative.”

OPM on Wednesday also released details about plan offerings through FEHB and PSHB for 2027. During Open Season, FEHB participants will see 118 total plan options across 45 carriers. PSHB participants will have 65 plan options from a total of 17 carriers. Not every FEHB or PSHB participant will have access to every plan option, as some are specific to certain geographic regions or agencies.

FEDVIP participants will be able to select from 11 dental carriers offering 21 plan options for 2027. There will be 10 vision plan options available across five carriers.

The Open Season materials that OPM published Wednesday confirm many of the Trump administration’s goals and expectations for the government’s health insurance marketplace next year, including on weight loss and obesity management, vaccine-related incentives, maternal health care and gender-affirming care.

A call letter earlier this year first outlined OPM’s 2027 efforts to reduce costs while promoting a “well care” model in the federal insurance marketplace.

OPM, at the same time, is weighing next steps for plan options in the government’s health insurance programs for future years. On Sept. 15, OPM put out a request for information on whether FEHB and PSHB carriers are offering the right number and type of plan options to participants.

The feedback from the public could help inform future decisions on health options, as the agency seeks to “optimize” plan portfolios with “high value choices at competitive costs,” OPM said.

OPM has also been outlining plans to collect and report claims-level data from enrollees in the FEHB and PSHB programs, as a way to mitigate fraud, waste and abuse in federal benefits. The plans have raised significant concerns from stakeholders and members of Congress about potential legal violations, as well as security and privacy issues.

In June, OPM clarified efforts to secure federal employees’ health information under the data collection effort, “out of an abundance of caution, and in order to address privacy related concerns,” a Federal Register notice states.

But in a letter to OPM Director Scott Kupor, a group of Democrats argued that those measures aren’t enough to protect sensitive health information from being exposed, especially considering that OPM retains the right to “re-identify” federal employees’ personal health records when “reasonably necessary.” The lawmakers are urging OPM to scrap its data collection plans altogether.

OPM’s announcement Wednesday comes ahead of Open Season, when FEHB and PSHB enrollees will be able to review and change their plan options for 2027. This year’s Open Season runs from Nov. 9 to Dec. 14.

“Open Season is the time to look beyond your current plan and make sure your coverage still works for you and your family,” Kiley said. “We encourage employees and annuitants to compare their options, review their costs and make any changes before the deadline.”

Updated Wednesday afternoon with more information.

If you would like to contact this reporter about recent changes in the federal government, please email drew.friedman@federalnewsnetwork.com or reach out on Signal at drewfriedman.11

Copyright © 2026 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.