New Health Plans Are Worth a Look
November 12, 2007
By Stephen Barr
Monday, November 12, 2007; D01
The annual open-enrollment season for federal employees and retirees begins today, and that means it's homework time for workers interested in holding down their health insurance costs.
The 2008 open season may be one of the most complex ever, in part because more national plans and local health maintenance organizations are offering the newest types of health insurance -- some with higher deductibles and others that allow consumers to decide how their dollars are spent.
The "consumer-driven" and "high-deductible" plans offer many employees substantial savings over the traditional insurance plans, said policy analyst Walton Francis, who tracks premium and benefit changes in the Federal Employees Health Benefits Program.
"These plans are among the biggest bargains," Francis said. "I admit they are a bit complicated to understand but not beyond the capacity of the smart and well-educated federal workforce."
According to the Office of Personnel Management, which administers the federal employee insurance program, less than 1 percent of the program's 4 million enrollees have signed up for consumer-driven and high-deductible plans since they were first offered four years ago.
Such plans let subscribers make tax-free contributions to health savings accounts or health reimbursement arrangements. The money can be withdrawn, tax-free, for qualified medical expenses. The savings accounts are in the enrollees' name and portable; the reimbursement accounts are held in the plan's name and available only while employees are enrolled in the plan.
The accounts are financed by premiums paid to the plan. During the year, enrollees use the accounts to pay for health care, including costs that the plan does not cover. As a general rule, annual physicals and other preventive care do not count against the spending accounts.
If an enrollee uses up the money in the account, he or she faces a high deductible -- ranging from $1,100 for individuals to $2,200 for families -- before traditional insurance coverage kicks in.
The plans differ in their details, and OPM officials recommend that employees read company brochures carefully.
Studying the details may be worth the time and effort for federal employees looking for savings in premiums and out-of-pocket expenses. The consumer-driven and high-deductible plans garner high ratings in this year's edition of the Consumers' Checkbook Guide to Health Plans for Federal Employees, which is to be released today.
For civil service employees under age 55, Checkbook gives high marks to these national plans, which are open to all: the American Postal Workers Union consumer-driven plan, the Mail Handlers high-deductible plan, the Government Employees Health Association high-deductible plan and the Blue Cross basic option.
Checkbook gives high ratings to the Aetna HealthFund consumer-driven plan, Aetna's high-deductible plan and the Kaiser standard option, among HMOs in the Washington area.
For government retirees who are enrolled in Medicare Part A or B, Checkbook recommends the same lineup of plans and adds the GEHA standard option and the Coventry high-deductible plan available in Maryland.
Checkbook also points out key changes such as new plans. One of them, the Mail Handlers Value Option, calls itself the lowest-priced plan in the program next year.
This year's is the 29th edition of the Checkbook guide, which dozens of federal agencies offer free online to their employees. Francis is the chief researcher and writer for the guide, sponsored by the nonprofit group that publishes Washington Consumers' Checkbook magazine.
The guide offers cost-comparison tables for civil service employees, postal workers and retirees. The ratings estimate how much an enrollee is likely to pay for premiums and out-of-pocket medical expenses, and the tables cover routine expenses and catastrophically large bills.
As the guide makes clear, the program's plans vary widely when measured by premiums, deductibles and co-payments. In addition to taking stock of what plans cost, enrollees also need to determine which type of plan (fee-for-service, HMO, consumer driven) seems likely to meet their needs and which plans allow them access to their favorite doctors in their preferred provider network.
OPM officials say that relatively few federal employees and retirees switch plans each year, and the majority of enrollees have opted for a well-established brand name, Blue Cross and Blue Shield. Blue Cross standard option, which is especially popular with retirees, and Blue Cross basic, which only covers in-network services and providers, have attracted nearly six in 10 of the program's enrollees.
"It is not irrational to stick with the tried and true and familiar," Francis said. "But that decision comes at a not insignificant dollar price."
Stephen Barr's e-mail address isbarrs@washpost.com.
