Health premiums: Don’t make the $17,000 mistake

The money you save, without losing any benefits or coverage, could be enough to buy you a new car next year — half a car, anyhow.

If you’re like many active and retired feds you are still unsure which health plan to pick for the 2020 year. The deadline is Dec. 9, next Monday.

If you are like most people in the Federal Employee Health Benefits Program you’ll punt — again, do nothing. You will stick with the same plan you had this year, and last, and maybe even since you entered government or retired from your federal or postal job. That could be a big mistake that means you will pay thousands of dollars more in premiums next year than necessary, in some cases $10,000 or more.

But consider your options: The money you save, without losing any benefits or coverage, could be enough to buy you a new car next year — half a car, anyhow. Here’s the deal:

Federal-postal workers in New York City, Dayton, Ohio; San Francisco, Dallas-Ft. Worth, Little Rock, Arkansas; and the most rural areas have roughly 30 federal health plans and options to choose from.  That’s a lot. Feds in the Washington, D.C.-Baltimore area have 40 plans and options. Seven new fee-for-service plans and options joined the FEHBP program. And Uncle Sam will pay about two-thirds of the total premium for most plans, and even more for postal workers, thanks to their union contract.

But insurance, even with the big federal subsidy, is still expensive, especially if you pick the wrong plan. For a couple with self-plus-one coverage the premiums for employees or retirees range from $3,940 next year to as much as $17,280 for the most expensive plan — with a lot of choices in between.  The same spread applies whether you are in a self-only plan or you have a huge family.

So when in doubt and with the deadline fast-approaching the way to guarantee the best coverage is to check out and stick with one of the plans with the highest premiums. If it costs a lot, it’s gotta be good, right?  The good news is that many of the highest-premium plans are excellent. The bad news is they cost too much for what you get. In many cases you can get similar coverage with the plan’s basic option, which costs much less.

Or if you need to save money only look at the plans with the lowest premiums. What could possibly go wrong, right? What could go wrong is that if you have an unexpected condition or emergency — i.e. the reason people buy insurance in the first place — you might be out of pocket big-time with a low premium plan. Which is why you either gotta shop or maybe continue to shell out big bucks for nothing.

So low premium, good, high premium, better! Correct?

Wrong, says Walton Francis, editor of Consumers’ “Checkbook Guide to Health Plans for Federal Employees.” He will be my guest on today’s Your Turn radio show at 10 a.m. EST on or 1500 AM in the Washington, D.C., area.

Picking a plan based on premiums alone is not the way to go, Francis says. Since you can’t know now what your 2020 medical issues and bills will be, “there is no way to know which plan will leave you with the lowest total costs. You have to gamble just as you do with any insurance.”

Francis says don’t pick a plan because it has the highest or lowest premiums. “A low premium may hide major coverage gaps. A high premium may simply reflect expensive enrollees — lots of older, less healthy retirees — rather than the plan with the best benefits. Some plans have both low premiums and excellent coverage.”

How do you know? A couple of ways: Check out today’s show; listen live on your computer or call 605-562-0264 to listen live from any phone. If you have questions for Walt, send them to me before showtime at

It’s also possible your federal agency, union or professional group has subscribed to Checkbook’s online shopping service. That means you can check plans, benefits and in-house network providers either from home or at the office. To see if you’re on the lucky list, click here.

And listen today, it could save you lots of money! Maybe let you end the year with more in your account than you paid out in premiums?

Nearly Useless Factoid

By Amelia Brust

The story of Rudolph the Red-Nosed Reindeer was created in 1939 by Robert May, a copywriter for the Chicago-based Montgomery Ward company, who was asked to come up with a Christmas story they could give away in coloring booklet form to shoppers as a promotional gimmick. May was inspired by the tale of The Ugly Duckling and his own experience with bullying as a child. He went with the name Rudolph to be alliterative. He wrote the story in rhyming couplets and tested it out on his 4-year-old daughter, Barbara. Although at the time, a red nose was an image associated with drinking and drunkards, May convinced the bosses at Montgomery Ward with an illustrator’s sketchings of deer at the Lincoln Park Zoo.

Source: Snopes

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