Married feds and retirees without dependent children are likely to save a lot in health insurance premiums next year. That’s when the government will offer the 9 million people covered by the Federal Employees Health Benefits Program (FEHBP) a new option. In addition to the traditional self-only and family plans, families of only two will be able to pick a new option: self plus one, or SP1.
Premiums for the SP1 plans are likely to be lower, maybe significantly so, than the premium for either a family plan or two self-only plans. But over time, any price break for the SP1 plans could narrow or disappear.
Here’s the deal: For years, childless couples and those whose children are grown argued it was unfair to charge them the same family premium as families with lots of kids. This year, the popular Blue Cross Blue Shield basic plan premium for workers and retirees is $1,300 for self-only coverage and $3,050 for family coverage, regardless of size.
After years of pressure, the government agreed to a third option, the self plus one. Although 2016 FEHBP premiums won’t be announced until late summer, most people expect they will be a bargain compared to the current family plan or even two self-only plans. But that could change rapidly.
FEHBP experts, like Walton Francis and David Snell say future premiums for the SP1 plans could go up significantly if large numbers of retirees move into them. Francis writes CHECKBOOK’s Guide to Health Plans for Federal Employees. Snell is director of retirement benefits for NARFE. Both agree that enrollment patterns will have a lot to do with SP1 premiums down the road.
Many of the empty-nesters are now down to a family of two. That would qualify them for one of the new SP1 options. But in the health insurance business, older people are known as “heavy users” because their medical bills are generally much higher than younger employees. And much higher than when they, the retirees, were younger, healthier and had growing families.
If large numbers of retirees shift over to the SP1 plans, their premiums would be adjusted upward each year. It is possible that over time the SP1 plans could actually carry higher premiums than some family plans.
So the good news, if you are a couple, is that shopping for health insurance may be more fun this fall. Maybe the takeaway is: enjoy it while you’ve got it — once you get it!
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