Solving the Health Plan Puzzle

The annual Federal Employee Health Benefits Program open season is right around the corner. It runs from Nov. 11 to Dec. 9 this year, which doesn’t give you a lot of time to make sure you’re in the right health plan for next year. It’s not too early to begin to explore your options, especially because there have been some changes to the program this year, including some interesting new options. 

In addition, some plans have dropped out of FEHBP and others have changed their coverage areas. If you’re among those being affected by such changes, you’ll be notified. In a recent column, we took a look at “The One Thing You Should Be Sure to Do This Open Season.” Today, let’s explore comparing how your plan stacks up against other options. 

All FEHBP plans provide the following benefits: laboratory services; emergency services; prescription drugs; mental health and substance abuse disorder services (including behavioral health treatment); maternity and newborn care; pediatric services (including oral and vision care); rehabilitative and habilitative services and devices; outpatient services; preventive and wellness services; chronic disease management; and hospitalization. 

Choosing a health plan is like solving a puzzle. You may find plans with very reasonable premiums, but these tend to have higher deductibles and you may pay a higher percentage of coinsurance. Plans with lower cost-sharing generally have higher premiums.

Cost Drivers

One of the main drivers of health plan costs is prescription drug coverage. According to the Office of Personnel Management, 27 percent of the total FEHBP premium was attributed to prescription medications in 2017. And such costs may continue to go up as more expensive drugs come to market over the next several years. So be sure to pay attention to prescription coverage in the plans you’re evaluating. 

Another area to consider is inpatient hospitalization. According to According to Business Insider, the top 35 most expensive conditions account for more than 70% of all hospital costs in the United States. These include pancreatic disorders, pneumonia, diverticulitis and heart arrhythmias. Some plans will have better coverage than others for these expenses, although their premiums may be higher as a result. For example, the new GEHA Elevate Plus plan provides a dedicated care coordinator to help you when you need certain types of surgery.

Picking a Plan

The plan you choose may depend on your stage of life. Here are some characteristics of plans that may be good choices at various stages:

Young and Healthy (Ages 20-35)

• Basic or value plan options (such as FEP Blue Focus and GEHA Elevate) have low premiums. Or consider a consumer driven health plan. 
• These may include basic dental and vision coverage. If not, then consider adding a low option FEDVIP plan.
• Consider contributing to a flexible spending account for known out of pocket expenses (such as allergy shots, physical therapy and prescription copays). 
• Many plans offer rewards and incentives to stay healthy.

Families With Young Children

• Low option plans or CDHPs work well for young families who are in good general health.
• Health maintenance organizations provide excellent preventive care benefits and care coordination, sometimes under one roof.
• No deductibles for in-network care.
• Specified co-pays for common medical expenses.
• Look for a dental plan that covers orthodontia.
• Dental and vision care may be included. If not, consider FEDVIP.

Families With Older Children

• Look for standard option plans that work across geographic areas for college-age children (such as SAMBA Standard and GEHA Standard).
• Think about your family’s specific needs, such as coverage for sports injuries, allergies and emergency care.

Mid-Career (40’s to early 50’s)

• High deductible health plans with a health savings account can provide tax savings. Look for plans with low premiums and lower cost sharing (such as GEHA HDHP, UnitedHealthcare HDHP, Aetna HealthFund HDHP).
• Standard option plans work well for this group, since people in this age cohort may have ongoing health concerns. Look for low cost sharing for in-network benefits, such as those offered in BC/BS Basic or Standard Option, MHBP Standard.

Pre-Retiree (Age 55-Plus)

• Look for plans with comprehensive medical benefits and lower cost sharing (such as NALC High Option and BC/BS Basic).
• HDHP plans can work well for this group, as long as enrollees have an HSA and don’t have other health insurance, such as TRICARE or a spouse’s private sector plan.
• Zero in on coverage for any chronic conditions you may have.

Retirees With Medicare

• Look for wraparound benefits options, in which the plan waives deductibles, copayments and coinsurance when Medicare pays first. 
• Some plans will lower cost sharing on prescriptions when Medicare is the primary payer of inpatient and outpatient care expenses.
• Lower premiums and good prescription benefits are key for this group.
• Do you need hearing aids, skilled nursing care or durable medical equipment? Search online plan brochures to compare coverage for these expenses.

Older Retirees Without Medicare

• Generally, high option plans with moderate premiums work best for this group. Fee for service plans allow in and out of network benefits, while health maintenance organizations provide lower cost sharing and care coordination.
• Beware of plans with extraordinarily high premiums. The lower-priced versions of these plans may work as well or better.

OPM’s website is the place to start your open season hunt for the best options for you and your family. This year, there is a new and improved plan comparison tool that will allow you to stack up three plans head-to-head to compare plans available in your zip code. Happy hunting!