Insurance options to consider as Open Season draws to a close

Monday - 12/3/2012, 3:17pm EST

Walton Francis, Editor, Checkbook Guide to Health Plans for Federal Employees and Annuitants

Download mp3

By Andrew Mitchell
Federal News Radio

With one week left to go in the federal health insurance Open Season, insurance expert and author Walton Francis warns that this is no time for federal employees and retirees to procrastinate in making their choices for 2013.

The Federal Employees Health Benefit Program Open Season ends Dec. 10.

"One way or another," said Francis, "spend a few minutes comparing plans, thinking about your health situation."

The author of Checkbook's Guide to Health Plans for Federal Employees and Annuitants appeared on this week's edition of For Your Benefit with Bob Leins and John Elliott.

"In a year of pay freezes, the typical family with FEHBP can save close to $2,000 by changing plans. That's giving yourself a pay raise," Francis added.

Francis told Leins and Elliott that, in addition to his publication, another good source for comparing FEHB plans is OPM's website.

A tip for healthy employees

Francis said that employees and retirees who do little more than see a doctor once a year and have low prescription medicine costs should consider signing up with one of the high-deductible plans offered by the FEHBP.

"They're a little different than regular plans, because the deductibles are bigger, but the health savings account that you get with those plans we call an IRA on steroids," Francis said. "The money is tax-preferred going in, it grows tax-preferred — you can even invest it in stocks — and you take it out tax-preferred. It's not use-or-lose money; it carries over year after year. It's your money for the rest of your life and, if you're reasonably healthy for a couple of years, you may wind up in a situation where you never have to pay anything for health care, your health savings account will have grown so much."

A tip for healthy seniors

Francis and Elliott agreed that seniors, whether still employed or retired, who also do little more than see a doctor once a year would also do well to defer enrolling in Medicare Part B.

Elliott said that his co-pay for a doctor's visit is just $20, while the cost of Medicare Part B in his case would be $2,000 per year. "If I go to Part B, I'm paying an extra $1,980 and getting essentially nothing for it," Elliott said.

The cost of the Medicare Part B premium rises with each year after age 65 that you do not enroll. However, as Elliott pointed out, in the eventuality that you do contract an illness, particularly one that is long-term, you can then assess how much you are spending per year on medical costs and do a cost-benefit analysis to see whether it is beneficial to you to join Medicare Part B at the higher late-enrollment rate.

More questions?

Francis will also appear on the Dec. 5 edition of Your Turn with Mike Causey, which airs live on Wednesdays at 10:00 a.m. on Federal News Radio.

RELATED STORIES

Tips for Open Season 2013

Premiums for federal health plan set to increase 3.4 percent

OPM: 10 new plans coming to FEHBP in 2013

OPM making changes to FEHBP - Is that good news?