Shopping can save money on federal employee health plans

The sticker shock of this year’s health insurance premiums for federal employees probably hasn’t worn off yet.

State workers and retirees should expect to pay an average of 8.7 percent more for insurance in 2023, the Federal Employee Health Benefits Program said last month.

Depending on your specific plan, you could pay even more, according to an analysis by Consumers’ Checkbook.

FEHB has been offered to federal employees, retirees and their families since the 1960s, and to date covers more than 8 million people as the nation’s largest employer-sponsored health insurance program, worth tens of billions.

Each fall, the program releases certain treatments, drugs and doctors while adding new ones. In some places, plans are shrinking while others are growing. Enrollees are given a four-week window to assess whether these changes are significant enough to make a change to their existing coverage.

In reality, few people do.

A little movement around the open enrollment season

Last year, approximately 98% of enrollees kept their health coverage unchanged. Only 0.6% of those who made changes completely switched health insurance carriers during the open season.

“There’s no way there’s going to be a 99% satisfaction rate on your health plan, but people aren’t [making changes],” said Kevin Moss of Consumers’ Checkbook in a telephone interview with the Federal Times. “There’s a lot of momentum in keeping what you’ve got.”

With 271 health plan options for 2023 offered by the federal government, there is an understandable reluctance to comparison shop for differences that may seem minor or simply too much to understand.

And while decision paralysis is a pre-existing condition this time of year, options are your friend—and possibly your wallet’s salvation, experts say.

“What’s important for people to know is that premium increases are not uniform,” Moss said. “So there are plans that lower their premium. There are plans where the premiums stay the same.”

And, yes, there are plans to increase.

Because insurance is a fixed expense, Moss and others said it’s worth reviewing the details of your plan each year to make sure it still covers your lifestyle. Taking average increases at face value can overstate — or worse, understate — exactly how much plan rates have changed.

How plan rates will change this year

Consider: Of the 2022 plans that will be available again in 2023, 56 have premiums that have decreased. Nine plans have premiums that remain the same.

In terms of the widely reported average increase, 119 plans had below-average increases, while 78 had average increases of or above 8.7%.

At each end of the spectrum, one plan is down about 35%, while another is up almost 50%.

“In some cases, it’s a large amount of money depending on where the premium was supposed to start,” Moss said.

Moss cited a plan for Illinois residents that had a 34.2 percent premium increase. For self-enrollment, that would cost someone an extra $6,500 next year.

“Even if you don’t think you want to switch, you should know how your premiums are changing,” he said.

Beneficiaries who are satisfied with their rates and coverage or loyal to a carrier may be even less likely to review their coverage during the open season.

Two-thirds of all federal employees are in a Blue Cross Blue Shield plan. Standard and Basic plans increased above the average increase of 8.7%. But FEP Blue Focus only increased by 2%.

“You may be happy with customer service from Blue Cross as a carrier, but when was the last time you looked into some other Blue Cross options?” Moss said, adding that reviewing your coverage is both about uncovering red flags and detection of favorable changes.

About 34 percent of FEHB carriers improved year-over-year in 2021, according to OPM’s plan performance assessment.

A common myth

Moss said some federal employees may be surprised to learn that enrolling just plus one isn’t always cheaper than doing it yourself and family. There are 86 FEHB plans where self and family enrollment is cheaper than single plus one.

Families of two may find it more profitable with a family plan instead of the intuitive plus one add-on.

“Tens of thousands of enrollees are potentially leaving valuable savings on the table by not taking advantage of Open Season to review their health coverage and ensure they are getting the most out of their benefits for themselves and their families,” said Kiran Ahuja, OPM director in a statement on October 4. “Ask yourself – how have my needs or my family’s needs changed over the past year, and then use the Open Season enrollment period to do a wellness or financial screening to make an informed decision that will help you get the best care .”

For specific benefit plan changes, Section 2 of the official FEHB plan brochure will highlight the differences.

“You’re going to get pretty decent coverage in almost any of these plans,” Moss said. “But there’s value, right? That’s the big takeaway. There is value in the market here.”

What you need to know before enrollment season begins

The open season for federal employees to re-enroll or change their health insurance for next year begins Nov. 14 and runs through Dec. 12. With more than 200 plan options, OPM encourages enrollees to compare.

Federal beneficiaries can find more information about the open season, including 2023 FEHB health plan comparison tools, on its website around the first week of November.

Last year, average total premiums for non-postal employees and annuities in the FEHB program increased 2.4 percent, the second-lowest increase in more than two decades.

Molly Weisner is a staff reporter for the Federal Times, where she covers labor, politics and contracts related to the government workforce. She was previously at USA Today and McClatchy as a digital producer and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.

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