Health Insurance Choices, Part Two

By Tammy Flanagan

October 6, 2006

Last week, we began a discussion aimed at clarifying your health insurance choices during the Federal Employees Health Benefits Program open season that runs from Nov. 13 to Dec. 11. The first part covered traditional fee-for-service health insurance, which is by far the most popular type of coverage.

This week, we'll look at the other end of the spectrum, high-deductible health plans and the health savings accounts that accompany them. These are the newest and least understood of the federal health care choices. Currently, fewer than 24,000 employees and retirees have chosen the high-deductible option.

Proponents of these new kinds of plans say they give individuals more control over their health care choices. Earlier this year, at a forum on health care at the Department of Health and Human Services, President Bush said, "The key thing in a health savings account is you actually put a patient in charge of his or her decisions, which we think is a vital aspect of making sure the health care system is not only modern but a health care system in which costs are not running out of control. When you go buy a car, you know, you're able to shop and compare. And yet in health care, that's just not happening in America today."

Bush noted that after fast-food company Wendy's offered its employees an HSA option, medical claims decreased by 17 percent, and the company's overall health care costs rose by only 1 percent last year. But Wendy's employees aren't the only ones with access to HSAs. Federal employees can use them, too. Learn the Terminology

Here are the key terms to understand in order to evaluate the latest health insurance options:

HDHPs are intended to cover serious injury or illness and include benefits for preventive care. With the exception of such care, the plan deductible must be met before benefits are paid. The minimum deductible is $1,050 for self-only coverage and $2,100 for family coverage. The maximum in-network out-of-pocket limits for this type of coverage are $5,000 for self-only plans and $10,000 for self and family plans. Pros and Cons

Here are some reasons why you might choose an HDHP plan:

Here are some potential downsides to the HDHP approach: Resources Program Note

For further information on FEHBP open season options, tune in to "For Your Benefit," presented by the National Institute of Transition Planning on Saturdays at 10 a.m. Eastern on Federal News Radio. In the Washington area, you can tune into the show at 1050 on the AM dial. Or you can listen to live or archived shows online at

Representatives of several health plans will be featured on upcoming shows:

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.

By Tammy Flanagan

October 6, 2006