How Much Money Can I Save by Switching FEHB Plans?

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Whether your family’s circumstances are “average” or unusual, some HMOs, some national plans such as Blue Cross Basic and GEHA Standard option, and a number of High-Deductible plans offer big savings compared to other plans. To help decide which is best, we estimate likely, and not so likely, costs to you under each plan, and compare coverage features of the plans and several aspects of customer service. In addition to dollar costs, customer service is an important element of plan choice, particularly for HMOs. We present customer survey data on plan satisfaction, data on which plans are least likely to have claims disputes, and data on accreditation.

Our Guide rates each plan on total expenses—including premium and out-of-pocket costs. The Guide shows what each plan will cost you in an “average” year and in years when your medical costs are much higher or lower than average. As our Guide shows, likely savings available to most employees and annuitants range from hundreds to thousands of dollars a year .

You should not pick a plan on the basis of its premium, benefit coverage, or catastrophic expense guarantee alone. We help you avoid these traps by including all of these complex factors in our ratings.

The information we give you is especially important if you expect a major change in your medical or financial situation. If you plan to have a baby next year, or face heavy dental bills, the plan that was best for you last year may not be best this year. Also, if you will retire, divorce, leave Federal employment, or join Medicare, you should review your choices very carefully.

Even if your plan satisfies you, why not consider switching to another? Those who switch in Open Season save hundreds of millions of dollars every year for themselves and their employing agencies, through migration to lower-cost plans that offer better value. You, too, can share in these savings.

Consider the following examples. If you are a single employee in the Washington, DC area, our estimates show that you are likely to save well over $1,000 by joining the Kaiser HMO Standard Option instead of the Blue Cross Standard Option, the most popular plan. If you are unwilling to make such a drastic departure from fee-for-service medicine, you can save almost $1,000 by enrolling in the Blue Cross Basic plan rather than the Standard Option. We rate a half dozen Consumer-Driven (CD) and High Deductible (HD) options as equal to or better than even Blue Cross Basic for most enrollees. All of these estimates include your premium cost, your savings from tax preferences, and your likelihood of a range of expenses up to and including a catastrophically expensive illness.

Perhaps you are a retired couple with Medicare parts A and B. The great majority of such retirees select the Blue Cross Standard Option. But we rate the APWU Consumer-Driven plan, Blue Cross Basic, GEHA Standard Option, and Kaiser Standard Option plan as likely to save you about $2,000. The Aetna Direct plan can save you about $4,000. Why? Most of these plans, like Blue Cross Standard Option, allow you to pay nothing for hospital and physician charges when you have Medicare parts A and B. In some of them their prescription drug coverage is not quite as good, but their premiums are far lower. So you start the year with major savings in hand. The Consumer-Driven plans have “Personal Care Accounts” that you can spend on dental costs and drugs that Medicare doesn’t cover. In the Consumer-Driven plans, and most High Deductible plans, you have the potential for even larger savings in future years if you build up your account. These comparisons show that even the most popular plans may not be the best buys.