FEHB & PSHB Healthcare Premiums Set to Rise Significantly in 2025

The Federal Employees Health Benefits (FEHB) Program and Postal Service Health Benefits (PSHB) Program will both see notable increases, placing added pressure on the budgets of both active federal employees and retirees.

Quick Breakdown of Cost Increase:

For non-postal FEHB enrollees, the average premium increase will be 13.5%. Meanwhile, postal PSHB enrollees can expect an 11.1% increase. These increases far outpace those seen in recent years and will impact millions of federal workers and retirees.

To put the rise in perspective, the increase for 2025 is nearly double the rate of premium growth in 2024, which saw a 7.7% rise. It’s also significantly higher than the 8.7% increase experienced in 2023. Taken together, the years 2023-2025 represent some of the most substantial premium increases in the 64-year history of the FEHB program.

What’s Causing the Increase?

A variety of factors are contributing to the increased costs for 2025. One of the primary reasons cited is the rising prices demanded by healthcare providers and suppliers. Meaning that as hospitals, clinics, and medical professionals face higher costs for equipment, staff, and operations, they pass these increases on to insurance companies, who in turn raise premiums.

Another significant factor is the increased use of prescription medications, especially specialty drugs. As more federal workers (and especially aging federal retirees) require advanced treatments, insurers have seen their costs significantly year over year.

Additionally, behavioral health services have seen a large increase in demand, such as individual and family counseling, and other mental health services. This rise in behavioral health spending has also contributed to the overall cost increase.

For federal employees and retirees who rely on these health plans, the cost increases will almost definitely be felt in 2025. Many enrollees may want to consider switching to lower-cost plans or adjusting their healthcare usage to save wherever possible.

Visit the OPM site to get a full set of rate charts for both FEHB and PSHB plans. And if you’re interested in doing a benefits review to see if there are any additional ways you can save on your current benefits, reach out to a Benefits Specialist in your area.