Federal Employees News Digest

Use this downtime to review your health insurance

As a former police reporter, I get a thrill these days walking into a bank wearing a mask -- and being welcomed.  There was a time when that was frowned on in D.C. -- and probably where you live too. It just shows how times and norms change -- almost overnight in some cases.

At this writing, nobody knows how long the COVID-19 pandemic will last or how bad the economy will get. With 83,000 deaths in the U.S. already, odds are it will get worse before it gets better. Many think we will be lucky to get by with the equivalent of the Great Recession of 2008. Others suggest we are already in Great Depression territory, which some say lasted from 1929 to 1951 and took a World War to make things “right” financially. 

According to many financial experts, self-quarantine has made people more reflective – not to mention  depressed and stressed. It’s even worse if you’ve lost a job, are waiting for a check from Uncle Sam or wonder if your job will exist when this is all over. Some believe the pandemic is bringing on a mid-life crisis and that people, especially older folks, are coming to terms with things they’ve been putting off -- like medical directives. It’s hard to watch scenes of a busy hospital on TV and not imagine yourself in one of those beds.

So this may seem petty in the extreme, but please -- for your own good -- think about it.  “It” being health insurance -- your Federal Employees Health Benefits (FEHB) plan or, more accurately, plans. 

Most workers and retirees are eligible for at least 20 plans, plus options.  That’s a staggering number, and all good, except most people find it bewildering.  So most -- 94% -- do nothing even though experts say at least 60% should consider changing plans.

Although heavily subsidized by the government (Uncle Sam picks up 72% of the total premium tab), insurance is still expensive.  This year premiums, on average, went up about twice as much -- on a percentage basis -- as did the cost-of-living adjustments for retirees or the pay raise for federal and postal workers.  That’s still enough to handle higher premiums.  But in many cases, feds shouldn’t be paying more next year. Even if premiums skyrocket (as they well might) because of both the coronavirus and the delayed medical procedures people put off because they couldn’t see a doctor or were afraid to go to a hospital. Too many sick people not getting care and making their pre-existing conditions worse – and expensive to treat -- will drive up insurance costs. 

No one knows how much premiums -- for  the FEHB plan and elsewhere -- will be going up next year, but  it could be a lot.  And while that could impact most people, it doesn’t have to be that way.  Especially if you are retired or older or both.

If you are over 50, odds are you are paying too much for health insurance right now -- as you were last year, the year before and next year for sure. It’s time to do something.  While you’ve got more time to reflect (thanks to self-quarantine), put yourself in the frame of mind that this year you won’t sleepwalk through the FEHB open season that runs from mid-November to early December.

During that period anyone in government (or retired from it) can switch to any of a dozen plans. Many  are the same brand -- one of the Blue Cross options -- but some are probably better for you and less expensive.  And many federal agencies now subscribe to on-line services (like Checkbook’s Guide) to help employees research health care options from the office. In other words they encourage you to shop, on company time, because getting the best plan for you will save you and your agency money – and help out insurance carriers too.

Inertia, which most of us have in abundance, is the villain.  Doing nothing is easier than doing something. If you like your health plan -- the one you’ve had since the Carter administration -- then stick with it.  Plenty of older, retired and often unwell people do.  It’s called “adverse selection” and it means that older people tend to stay in the same health plan year after year even when they face new health problems and rising costs. By the same token, younger, healthier people shop around to save money.  The result is that some of the FEHB plans, while excellent and heavily subsidized, are just too expensive for what they provide.  Young, healthy participants allow plans to hold down premiums and improve benefits, and a large percentage of older so-called heavy users costs insurers more --  which they pass on to you.

One good thing to do is talk with your doctor or someone in the practice.  Find out if he/she is part of another network that has lower premiums and similar if not superior benefits. 

The important thing, during this time of reflection, is to think about it.  Then do something: Shop till you drop this coming open season. 

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