OPM calls on federal insurance carriers to promote ‘well care,’ cut costs

The Office of Personnel Management is out with a range of new expectations for federal health carriers, driven largely toward end goals of reducing costs while promoting a “well care” model in the federal insurance marketplace.

OPM’s March 31 call letter for the Federal Employee Health Benefits and Postal Service Health Benefits programs outlined what FEHB and PSHB carriers should take into account as they work to finalize their offerings for the upcoming insurance plan year, which begins Jan. 1, 2027.

For 2027, OPM emphasized that FEHB and PSHB plan members should take a “more active role” in their health. The agency is also encouraging carriers to expand non-pharmaceutical health coverage, which OPM said will “prevent chronic conditions and drive meaningful cost savings.”

“Today’s health decisions shape outcomes for years to come,” OPM Associate Director for Healthcare and Insurance Shane Stevens said Friday in a press release. “By focusing on prevention and giving individuals the tools to take ownership of their health, our participants have enhanced opportunities to improve their health while ensuring a more sustainable program for federal employees, retirees and taxpayers.”

Health plan participants have faced significant cost spikes over the last several years. For 2026, enrollees in FEHB and PSHB began paying an average of 12.3% and 11.3% more, respectively, toward their health insurance premiums.

Amid the surging expenses, OPM is encouraging carriers to find “innovative” ways to cut costs while maintaining “comprehensive” coverage. That can include strategies such as “site of care optimization”— or in other words, incentivizing plan members to go to lower-cost medical care facilities whenever possible.

“All carriers must provide sufficient documentation demonstrating that every feasible cost reduction strategy was thoroughly evaluated and incorporated into their benefit and rate proposals to the greatest extent possible,” Stevens said in the OPM letter.

Kevin Moss, a federal benefits expert and senior editor at Consumers’ Checkbook Guide to Health Plans for Federal Employees, said some of the recommended cost-savings strategies, including “site of care optimization,” are already in effect behind the scenes from carriers. But Moss noted that plan members should be on the lookout for additional types of offerings, including what OPM described as “digital therapeutics,” based on what OPM included in its call letter.

“FEHB members could see new types of benefits show up in their FEHB plan next year, such as digital therapeutics and functional and lifestyle medicine, or an expansion of existing wellness benefits,” Moss told Federal News Network. “You should also expect to see more member-facing education from carriers on preconception maternal health.”

A different federal benefits expert, speaking anonymously to be able to speak candidly about the call letter, likened OPM’s goals of maintaining benefits while cutting costs to squeezing a balloon from both ends.

“There are certain factors that have been driving these large increases the last couple of years, and they’re not going away. How can carriers respond to this request of squeezing the balloon and not having it pop?” the benefits expert told Federal News Network. “I don’t know how you can say, ‘We don’t want to shift more costs to members. We don’t want premium increases. We don’t want any cut in benefits. But we also want to add all these lifestyle benefits.’ From where I’m sitting, the pieces aren’t going to fit together.”

Notably, OPM’s call letter, published on March 31, also came several weeks behind the usual schedule of releasing the letter in January or February. Carriers now have less than two months to align their benefits and adjust premium rates for the 2027 plan year.

An OPM spokesperson said the agency is “confident” that carriers will be able to meet the statutory May 31 deadline to finalize their proposals. OPM said it will hold “pre-proposal” meetings with carriers, starting this week, to help address any questions.

“Carriers have been closely monitoring major health care and insurance reforms under President Trump, and they recognize this year’s call letter reflects OPM’s alignment with the administration’s priorities,” the spokesperson said. “With this proactive approach and the flexibility to make adjustments during contract negotiations, we expect the process to move forward smoothly.”

Weight loss treatments

In its call letter, OPM detailed its expectations across several health-related areas — including weight loss and obesity management, vaccine-related incentives, maternal health care and gender-affirming care.

For obesity treatment plans next year, OPM is calling on FEHB and PSHB carriers to revise requirements, as needed, for members before they can qualify for coverage of GLP-1 medications prescribed for weight loss.

For plan year 2027, OPM will require carriers to use a rigorous type of obesity management program called “intensive behavioral therapy” (IBT), both before and during getting insurance coverage of “anti-obesity medications.” IBT programs are designed to promote weight loss through nutrition, physical activity and other behavioral changes.

Many carriers already have requirements for enrollees to complete before getting coverage for a GLP-1. It’s not yet clear whether, or by how much, carriers will need to adjust their requirements in response to OPM’s new call letter.

“Attestation statements alone from members or providers of prior weight loss attempts should not bypass these requirements for a comprehensive approach to obesity management,” Stevens said.

GLP-1 prescription drugs have grown in popularity over the last several years as a way for individuals to manage obesity. In 2024, OPM began requiring FEHB carriers to cover at least one GLP-1 drug, as well as at least two oral medications, that can be prescribed for weight loss.

A recent OPM office of inspector general report found that FEHB pharmacy spending on GLP-1 medications increased by more than 500% in just a five-year span — from 2019 to 2024. Between 2023 and 2024 alone, the spending increased by $900 million. Data on GLP-1 spending during 2025 is not yet publicly available.

Vaccines

Despite a section of OPM’s call letter discussing vaccines, there do not appear to be any changes to vaccination coverage for plan members — in terms of both the types of vaccines covered and the cost to members.

Carriers will continue to be required to cover all vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS) — including all vaccines recommended for children, OPM said.

The Trump administration’s CDC has sought to cut the number of vaccines it recommends for every child — a move that is in the middle of litigation. Leading medical groups have said the CDC’s cuts would undermine protections against a half-dozen diseases, according to the Associated Press. Regardless, coverage under the FEHB and PSHB is still required for all ACIP-recommended vaccines — including ones under scrutiny from the CDC.

For plan year 2027, OPM is making one vaccine-related revision: All FEHB and PSHB carriers are being told to remove any existing monetary incentives for enrollees who get pediatric and prenatal vaccinations, to “support members’ independent judgment with respect to vaccination.”

Some, but not all, federal insurance carriers may offer monetary incentives to enrollees who get certain vaccinations, such as an annual flu shot. Generally, these benefits allow enrollees to receive a limited amount of money that can be put toward other health care expenses — similar to a Flexible Spending Account. These wellness incentives, however, are mainly limited to plan members who are 18 years and older.

Despite no broad changes to vaccination coverage, OPM’s call letter still leaned in on the idea of personal choice in vaccine decisions and referenced goals of the Trump administration’s larger push toward the “Make America Healthy Again” agenda.

“Vaccination coverage remains an important public health tool for protecting individuals and communities from preventable disease,” Stevens said. “However, the administration has emphasized that decisions regarding vaccination should be grounded in individual medical judgment and informed consent, particularly as it relates to pediatric and prenatal vaccinations.”

Gender-affirming care

OPM’s call letter will also bring further changes for insurance enrollees seeking coverage of gender-affirming care.

Beginning in January 2026, OPM required FEHB and PSHB carriers to largely terminate coverage of gender-affirming care for enrollees, with exceptions made for those midway through treatment. OPM also still allows for coverage of counseling services from licensed mental health providers, including “those who provide faith-based counseling.”

Starting in 2027, OPM told carriers to additionally end all insurance coverage for plan members who are mid-treatment for gender-affirming care. The only coverage that will still be allowable from carriers relating to gender-affirming care is counseling services.

The Biden administration previously expanded carriers’ coverage requirements for gender-affirming care — a move that has been sharply reversed under the Trump administration.

OPM’s decision to roll back gender-affirming care coverage has come under recent contention. A group of federal employees filed a complaint, alleging that the coverage restrictions illegally discriminate against employees based on sex and disability.

In March, the Equal Employment Opportunity Commission rejected the allegations and upheld the Trump administration’s decision to broadly limit federal insurance coverage of gender-affirming care.

Maternal health care

In the letter, OPM also called on carriers to ensure they are educating members on impacts to maternal health.

For one, OPM encouraged carriers to use screening bundles and outreach programs for enrollees who are interested in becoming pregnant within the next year. OPM told carriers they should ensure access to treatments for “conditions that are recognized to adversely impact fertility,” such as obesity, prediabetes and hypertension.

Carriers are also being “strongly encouraged” to offer plan members access to discounted rates for assisted reproductive technology (ART) procedures that are not covered through their health plans.

Though the actual requirements do not appear to be changing, OPM reminded carriers they are “permitted” to offer coverage of certified midwives, certified professional midwives and certified nurse midwives — and that any covered providers should be listed in carriers’ directories.

By May 31, all carriers are expected to have finalized their plans and offerings for 2027. Open Season will then take place over a one-month period through November and December. During that time, FEHB and PSHB participants can make changes to their health care options, which will take effect in January.

“Mid-year is always a good time to assess how well your current plan is handling your healthcare needs. This fall during Open Season, you’ll want to carefully review the official plan brochure — especially Section 2, which talks about changes to the plan for next year,” Moss said. “Make sure to review how the plan premium is changing, especially against other FEHB plans, and make sure to check the carrier site to see how any prescription drugs you may take will be covered and whether your doctors will remain in-network.”

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