Maturity and Youth

At the risk of inducing a state of panic in some readers, I'll start this week's column by noting there are only 10 days left to evaluate your health care choices for the 2010 open season. Here are the top two questions I've been getting during this open season:

• I'm turning 65 (or my spouse is). What health plan should we use and do we need Medicare Part B?
• Does my child really lose coverage in our self-and-family plan under the Federal Employees Health Benefits Program when he or she turns 22? What can I do about that?

Let's look at each of these issues. Medicare

FEHBP plans cannot require you to enroll in Medicare. So, in many cases, they will offer incentives, such as waivers of deductibles and co-insurance, to encourage Medicare enrollment. If you are retired, over 65 and don't have a lot of medical expenses, I suggest you consider one of the less expensive federal plans along with Medicare A and B coverage. If your coverage turns out to be inadequate, then you can switch to a different plan in a later open season.

The main difference in FEHBP health plans after Medicare becomes primary payer is coverage for prescription drugs. You'll want a plan that offers the best choice of providers that are part of the plan's network. Here is the range, from lowest to highest, of nonpostal premium rates for fee-for-service plans in FEHBP:

The difference between the high end and low end of this spectrum can more than make up for the monthly cost of enrolling in Medicare Part B -- which, for most people, will be $96.40 per month in 2010. All FEHBP plans have catastrophic coverage and some level of prescription benefits. Many of them also waive deductibles, co-payments and coinsurance when Medicare is primary. If you do not fill many expensive prescriptions, most plans will provide adequate coverage for your major medical expenses. The Office of Personnel Management offers a comparison tool showing exactly how the plans differ.

For retirees with Medicare coverage, one very important consideration is out-of-pocket expenses for prescription drugs. Medicare Parts A and B do not cover outpatient prescription drugs, so your FEHBP plan will be the only coverage you have for prescriptions unless you enroll in Medicare Part D. Some FEHBP plans charge a flat amount or co-payment for drugs (such as $30 for a 90-day supply), while others use a co-insurance model based on a percentage of the drugs' actual cost (such as 15 percent of $3,000). Differences in prescription coverage can lead to major variations in the cost of health plans.

Covering Children

What about those of you who aren't old enough for Medicare, but have children who are reaching adulthood? Regardless of whether your child is still a full-time student, he or she will lose coverage under a self-and-family FEHBP enrollment at 22. You have four basic options for dealing with this situation:

• Enroll the child in FEHBP temporary continuation of coverage. You can sign up the child for self-only coverage under any available FEHBP plan and pay the full premium (both the employee and employer share), plus a 2 percent administrative fee. The least expensive choice is Mail Handlers Benefit Plan Value Option, which is a little under $250 a month. Coverage can continue for up to 36 months. The OPM Web site has answers to frequently asked questions on temporary continuation of coverage.
• Purchase individual health insurance coverage for the child. The SAMBA Dependent Children's Health Plan, for example, covers children to age 27 with the same benefits as SAMBA Standard Option plan. The plan costs $260 a month in 2010 and includes up to $400 in preventative dental benefits. You can contact your own FEHBP plan regarding individual enrollment. Depending on pre-existing conditions, your child might qualify for a plan that is less expensive than temporary continuation of coverage.
• If your child is a student, check to see if his or her school offers a student health plan. These plans generally are reasonably priced, but might not provide very good catastrophic benefits and they usually have higher deductibles, co-payments and co-insurance costs than FEHBP plans.
• Help your child find a job that offers health insurance. Good luck!

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on federalnewsradio.com or on WFED AM 1500 in the Washington metro area.