Advice on choosing a federal employee health plan

Joe Davidson
Columnist November 20, 2012

It’s the time of year for football, turkey and FEHBP.

Time for federal employees to choose health insurance plans from within the Federal Employees Health Benefits Program. The open season for making that choice runs through Dec. 12.

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. View Archive

Open season also means it’s time to talk with Walton Francis, a health economist who is the guru on health insurance for federal workers. Francis is the primary author of Checkbook’s 34th annual Guide to Health Plans for Federal Employees and has been writing it from the beginning. There’s a charge for the Guide, but more than 40 federal agencies and facilities have purchased online access and make the book available to their employees through an agency intranet link or other computerized tools.

The Guide provides a wealth of information, including statistics on which plans are more or less likely to be involved in claims disputes with enrollees, and results of a survey on service quality for each plan.

The Office of Personnel Management (OPM) also has loads of material about health plans on its Web site. Among the information is a video that explains differences among fee-for-service plans, health maintenance organizations (HMOs), high-deductible plans and consumer-driven plans. The video also discusses how to compare plans.

Another service that helps employees choose a plan is PlanSmartChoice. It has tools to compare medical, dental and vision plan options and estimate health-care costs.

Here are some of Francis’s edited thoughts for this open season:

General advice to federal employees: For heaven’s sake, please spend a half-hour reviewing your health-care situation, for you and your family, and reviewing the brochure of the health plan you’re in today about what it covers and how it has changed from last year. Don’t ignore the possibility that the plan that was just right for you last year won’t be just right for you next year.

Federal workers can save big bucks: In the Washington area, there are roughly two dozen plans available to everybody. Think of them as two groups, the dozen higher-cost plans and the dozen lower-cost plans. We’ve found that if a person switches from one of those higher-cost dozen to one of the lower-cost dozen, a self-only enrollee will save on average about $1,000, and a family close to $2,000. These are simple savings to make. They arise primarily because there are such huge premium differences among the plans. But there are also out-of-pocket payment differences. It’s a way to give yourself a pay raise, even though the federal government has a salary freeze.

Lower premiums don’t have to mean you are giving up benefits: You sometimes are and sometimes not. Each plan has a different benefit structure. Sometimes you can actually make savings and get better benefits. There are lots of trade-offs in choosing among plans.

What employees should consider when choosing a plan: Think hard about the kind of delivery system you like. For example, some people love HMOs, some people hate them. The high-deductible plans and consumer-driven plans, as a group, have various kinds of savings accounts and higher deductibles and very good catastrophic protection. And, of course, the traditional fee-for-service, PPO plans, where you get a much better rate if you use network doctors and hospitals and you pay more — a lot more, if you go out of network. Blue Cross Basic, run by the same company that offers Blue Cross Standard, is far less expensive in premium, but you give something up — it pays noting out of network. Other than that, its benefits are just about as good, if not better, than those of Blue Cross Standard, at a huge premium saving.

Important changes in FEHBP: This year OPM has gotten all of the plans to be on the same wavelength as the Affordable Care Act, and a broad range of preventive care benefits — annual physicals as well as immunizations and other things — are now free and not subject to the deductible in every health plan in the FEHBP. Also, hearing-aide benefits, though important to only a few people, get better every year in some plans. The only negative thing, and it’s not in the health plans themselves, is in the flexible-spending account limits, newly imposed under the Affordable Care Act. It used to be that you could set up $5,000 in a health-care flexible-spending account, but next year the ceiling is $2,500.

* * *

■Francis has much more information than we can get in this column. He takes questions from listeners with Mike Causey, a former Federal Diary columnist, at 10 a.m. every Wednesday during open season, on Federal News Radio, 1500 AM.

Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.

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