Plan B: You need 4 of them when shopping for insurance

Monday - 12/2/2013, 2:00am EST

The health insurance hunting season for active and retired feds ends Dec. 9. Even if you hate to shop, it is important that you pick the right plan for you. And that you don't overpay or skimp on premiums and wind up in serious financial trouble.

Think worst-case scenario and you may be able to avoid it:

Suppose you are hit with eye-popping, wallet-draining medical bills next year. Maybe an accident. Maybe a life-threatening disease or medical condition. Who is going to pay for the treatment you need? Could you afford to shell out $15,000 for yourself, or twice that amount for your family, before your health insurance took over?

Or suppose you decide to retire, or find out you must retire, only learn that you won't be eligible for the government's cradle-to-grave Federal Employees Health Benefits (FEHB) program because you've been covered by a plan outside the FEHB program for the previous five years.

You can't avoid getting older, nor can you choose not to be struck by a major illness — or a bus — but you can take steps to prepare yourself for a worst-case scenario.

HMOs — for health-maintenance organizations — stress preventive care, do very well with maternity benefits, and have minimal out-of- pocket costs and very little paperwork. Some even have all of their doctors in one facility, which can be a major time-saver for you. And them.

There are four very important things to remember as you shop for health insurance. Remember the Open Season ends next Monday. Things on your checklist should include:

  1. Check with your doctor or doctors to make sure they will be in the network of the plan or plans you are considering. Otherwise you may need to change plans. Or doctors.

  2. Check the catastrophic limit on your health plan. That is the amount you will be required to pay out of pocket (in the event of a major accident or illness) before the insurance plan takes over. Medical bills are the leading cause of bankruptcy, so insure yourself for the worst. For more information, click here.

  3. If you are married to a fed, don't try to save money by enrolling in two self-only plans. You will pay slightly higher premiums in a family plan but the deductible you must satisfy (in the event of a major illness or accident) is much less. For more information, click here.

  4. If you are piggybacking on your nonfederal spouse's health plan, be very careful. That plan may shrink or go away when he or she retirees. Then the cradle-to-grave FEHBP looks very good. BUT ... in order to take FEHBP coverage into retirement, you must have been covered for the five years prior to retirement. For more on the all-important five-year rule, click here.

NEARLY USELESS FACTOID

Compiled by Jack Moore

Approximately $1 billion in gift cards goes unredeemed each year.

(Source: MarketWatch)


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