The Office of Personnel Management (OPM) announced that average health insurance premiums for federal employees and retirees will increase by 12.3% in 2026, the second consecutive year of double-digit increases.
The employer portion of the government-sponsored Federal Employees Health Benefits Program (FEHBP) premiums will increase by an average of 9.2%, bringing the overall premium increase to 10.2%.
The report indicates that federal employees will pay an additional 13.5% of the cost of employer-sponsored health insurance by 2025, compared to a corresponding increase of only 7.7% in 2024.
By insurance type, participants in FEHBP “Self Only” plans will pay an average of $15.43 more per two weeks; “Self Plus One” plans will pay $34.21 more per pay period; and “Family” plans will pay an average of $38.81 more per paycheck.
Enrollees in the U.S. Postal Service Health Benefits Plan (PSHB), which launched last fall, will see an average premium increase of 11.3% next year, slightly higher than the 11.1% increase in 2025. The government’s share of PSHB premiums will rise by an average of 8.0%.
Postal employees will pay an additional $12.88 per two-week period for individual plans; an average increase of $29.78 for individual plus one plans; and an average increase of $32.46 per paycheck for family plans.
As part of federal employee dental and vision coverage, dental premiums will increase by an average of 3.3% next year, while vision premiums will increase by an average of 0.5%.
In a blog post announcing the premiums, OPM Deputy Director for Health Care and Insurance, Shane Stevens, said the government hopes these increases will ease after President Trump takes steps to address prescription drug costs.
Stevens noted that pharmaceutical expenses account for a significant portion of the agency’s overall budget; some new drugs, such as GLP-1s, could lower healthcare costs in the long term if used and managed appropriately, but they could significantly increase spending in the short term.
Stevens noted that President Trump’s August promise to reduce drug costs by “1,400 to 1,500 percent” was mathematically impossible, and commented that this was mathematically impossible.
Stevens also stated that OPM looks forward to collaborating with pharmaceutical companies and government-level efforts to identify future cost savings that could benefit federal programs.
OPM’s annual open access materials, which ran from November 10 to December 8, did not address the Trump administration’s decision to eliminate most gender-affirming health services for federal employees, retirees, and their families.
OPM also did not provide further information on the IT staff shortage responsible for maintaining the PSHB, a problem that has prompted warnings from the Inspector General and members of Congress that it could jeopardize the program’s operations.
Bill Shackelford, national president of the National Association of Active and Retired Federal Employees (NARFE), said the premium increases, amidst “the ongoing government shutdown, a proposed 1% pay raise for many employees, and a shrinking federal workforce,” have diminished the appeal of public service.
He noted that federal employees face missed pay, below-market pay increases, increased workloads, and the risk of layoffs; rising premiums will make it even more difficult for already mission-driven employees to afford the rising cost of living.
Shackelford warned that the cumulative effect of rising costs and related policies could undermine the government’s ability to recruit and retain the talent needed to meet the nation’s needs.