Open Season explainer: The pitfall of two self-only health plans

Wednesday - 11/30/2011, 3:58pm EST

Walton Francis, editor, Checkbook Guide to Health Plans for Federal Employees

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By Jolie Lee
Federal News Radio

If you are in a couple with no dependents, it may be wiser for you to buy a family plan rather than two self-only plans.

Although the premiums of two self-only plans are less than the premium of a family plan, Walton Francis warns, "There's a little trap there for the two self-only's."

That's because two self-only plans means two catastrophic limits. So if each person reaches the catastrophic limit, the couple is paying the catastrophic limit out-of-pocket two times, said Francis, who is the editor of the Consumers Checkbook Guide to Health Plans for Federal Employees, in an interview with Your Turn with Mike Causey. Francis outlined some tips for federal employees during this Open Season to choose a Federal Employee Health Benefits plan. The Open Season ends Dec. 12.

For example, if you are enrolled in the Blue Cross Blue Shield Basic plans, your catastrophic limit is $5,000 for both the self-only and family plans.

"If you're in a car wreck with two self-only's, you'll pay each $5,000 out of pocket. In a family plan, you only pay one $5,000 out of pocket," Francis said.

He added, "That's the risk you take to save a couple hundred bucks a year [with two self-only plans]."

Causey said a catastrophe is the last thing most people want to think about. However, that's exactly the reason you buy a health plan.

"You don't want to buy your house to burn down, but you buy fire insurance to protect you," Francis said.

Francis added that in some cases, the catastrophic limit "trap" doesn't matter. For example, for high-deductible and consumer-driven plans, the family catastrophic limit is double the single plan's limit.

In the second half of Your Turn with Mike Causey, Mike spoke with the Federal Times' Steve Losey about how across-the-board deficit reduction cuts could impact federal employees.

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