A retiree under the Federal Employees Retirement System who left work before age 62 and carries Blue Cross and Blue Shield Standard Option Self Plus One coverage will be about $1,014 worse off in 2027, according to an estimate from Federal Pension Advisors. The retiree’s health premium rises $84.52 a month, to $974.76, while the annuity stays flat because most FERS retirees under 62 receive no cost-of-living adjustment. Social Security and CSRS pensions rise 3.6 percent in January. The estimate rests on an average pension and a single plan, so it shows a pattern more than any one retiree’s bill.
How the $1,014.24 loss adds up
The firm’s analysis of 2027 raises against premiums starts with an estimated average FERS annuity of $2,393 a month, built from Congressional Budget Office data by FedSmith. With a 0 percent adjustment and a premium increase of $84.52 a month, the net change is minus $84.52 a month, or minus $1,014.24 over a year. The figures are before taxes and other deductions. The question for these retirees is whether a plan change in open season can recover any of it.
The December 14 end of open season is the only regular chance to move off a plan before the 2027 premiums start in January.
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The $84.52 comes from OPM’s 2027 rate charts, as compiled by My Federal Retirement and cited by the firm: Self Plus One in the Standard Option costs $974.76 a month. Employees in the same plan see a rise of $39.01 biweekly, which is the same $84.52 spread over a month. A separate Federal Pension Advisors report puts the Standard Option self-only premium for annuitants at $443.41 a month, about $5,321 a year.
The firm lists its own limits. The examples ignore first-year COLA proration and changes in other income, use average annuities, one plan and estimated COLA rates, and “won’t match every FERS or CSRS retiree.” A retiree with a larger pension, a different plan or income from other sources would land at a different number, though the direction is the same wherever the annuity does not grow.
Why FERS retirees under 62 get no raise
FERS retirees generally do not receive a cost-of-living adjustment until age 62, FedWeek reports. The exceptions are retirees who left on disability and those who retired under special law enforcement, firefighter or air traffic controller provisions. CSRS and CSRS Offset retirees receive the full adjustment at any age, which is why the same plan produces opposite results for two retirees of the same age.
The official January adjustments are 3.6 percent for CSRS and 2.6 percent for eligible FERS retirees. When inflation runs above 3 percent, the FERS figure is one percentage point lower, and between 2 and 3 percent it is a flat 2 percent. The National Active and Retired Federal Employees Association (NARFE) has objected, saying that with inflation above 3 percent FERS retirees “will have their COLAs reduced by an entire percentage point,” and it backs the Equal COLA Act, which would provide full adjustments to FERS retirees.
Retirees who have been on the rolls less than 12 months get a prorated adjustment under both systems, while Social Security’s 3.6 percent is not prorated for recent retirees. A FERS retiree under 62 sits outside all of it. The annuity that pays the premium stays where it was, and the $84.52 comes out of the same check.
The same plan, three different results
The firm’s table shows how far the outcome swings. A CSRS retiree with an average $6,007 annuity and the same Self Plus One plan gains $125.48 a month, or $1,505.76 a year, on the firm’s estimated 3.5 percent adjustment. Applying the official 3.6 percent, which OPM rounds down to a whole dollar, gives a $216 raise and a net gain of $131.48 a month, simple arithmetic on the firm’s inputs.
A FERS retiree age 62 or older with the $2,393 average annuity lands near break-even but still behind. The firm’s estimate of 2.5 percent gives $59 and a net loss of $25.52 a month, or $306.24 a year. At the official 2.6 percent the raise is $62 and the net loss is $22.52 a month, or $270.24 a year, by the same arithmetic. The under-62 retiree’s $1,014.24 is nearly four times that.
Plan choice changes the picture. The firm reports 2027 self-only employee rates of $145.46 biweekly for Blue Cross Basic, up $11.69 or 8.7 percent, $74.16 for FEP Blue Focus, up 11.0 percent, and $86.75 for GEHA Standard, unchanged from 2026. Self Plus One prices were not listed for those plans, so the saving from switching depends on the rate chart for that enrollment type.
Open season and a flat annuity
OPM’s open season page sets the window at November 9 through December 14, 2026, and lists the FEHB Plan Comparison Tool. For a retiree whose annuity does not grow, the comparison that matters is the monthly Self Plus One premium in each plan, set beside the current $974.76 for Blue Cross Standard.
OPM’s 2027 open season highlights put the government contribution increase at 8.6 percent and the average enrollee share increase at 10.9 percent. A retiree with no adjustment has nothing to offset that gap, and the firm’s estimate of $1,014.24 for a year is what it looks like in dollars for one average household.
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This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
