How to Balance Risk when Choosing FEHB Plans

Since you do not know in advance how high your medical bills will be, there is no way to know which plan will leave you with the lowest total costs. You must gamble just as you do with any insurance, or indeed with many other choices you make. On sunny mornings you probably won't take an umbrella to work, and sometimes you get wet. In a good year the best policy, in hindsight, would have been no policy, and your total costs would have been zero. In an expensive year, the best policy would have been one that covered every dollar. But we usually don't know whether we'll have a good year or a bad year, which is precisely why we buy insurance. Only you can decide how much risk you want to bear. Our cost comparisons give you a menu of risk as well as plan choices. They help you think about the level of risk each plan involves, and how much that will cost or save you.

Do not pick a plan either because it has the lowest premium (a seeming best buy) or the highest premium (a seeming set of terrific benefits). As our ratings show, a low premium may hide major coverage gaps, and a high premium may simply reflect expensive enrollees rather than the best benefits. Only some plans have both low premiums and excellent coverage. Pick one of these based on our ratings, which combine both premium and coverage in determining the best buys.

Also, do not pick a plan because it has a lower deductible despite a higher coinsurance amount, or vice versa, and do not try to compare these benefits directly. We use computer programs to perform these calculations, and there are many complexities. For example, whether a plan with a low deductible and a high coinsurance rate is better for you than a plan with the opposites depends on the amount of your expenses, which may not be what you expect. A large body of research shows that very few people can juggle cost-sharing variables to pick plans that are the best buys.