Are you overpaying for health insurance?

Are you paying a lot more than necessary for coverage under the Federal Employee Health Benefits Program?

It’s very likely, especially if you haven’t changed plans in the past few years. Or you are retired, which means it’s likely you are paying more in premiums than necessary.  Also, if you are a long-time fed, or you’ve been retired a while and you’ve never changed plans you are almost certainly overpaying. Or if you are just plain really good at inertia, then yes, odds are you are overpaying and wasting pay raises when they do come along. With just a little effort you could get the same or similar coverage next year and keep your favorite doctor(s) for less money. But it won’t happen on its own. And it has little to do with the size of your next pay raise.

Medical inflation nearly always outpaces the regular increase in cost of living. Because health premiums keep going up, some feds, both active and retired, count on January pay raises and cost of living adjustments to help them cover higher health insurance premiums.  It’s accepted by many that higher premiums eat into or eat up whatever pay raise Congress and the White House decide to give nonpostal federal workers. Sometimes it’s true, other times not so much. In most years they could get excellent coverage and maybe pay less whether they got a pay raise or not.

Some experts say as many as half of all workers, and many if not most retirees, are in plans that are too costly simply because they are afraid, or too lazy, to shop around. The open season for picking your 2020 health plan runs from Nov. 11-Dec. 9.  During that time all workers and retirees can shop from 20 and 30 plans and options. They cannot be refused for any reason — age, preexisting conditions or lifestyle — and some could save $1,000 or more in premiums just by doing a little shopping.

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A couple of months ago it appeared there might not be any federal pay raise in 2020. But the optics have shifted. Now the question is whether feds will get a 2.6% across the board raise as proposed by President Donald Trump or the 3.1% approved by the House. The 2.6% would be across-the-board. There would be no additional locality-based increases for feds in high-wage areas like Washington, D.C.-Baltimore, San Francisco, Los Angeles, New York City, Houston or Philadelphia. The 3.1 package earmarks 0.5% for locality pay raises. That would benefit feds in locality areas who are already paid substantially more than workers in the Rest of the U.S. (RUS) locality zone.

Premiums in the FEHBP vary — a lot. Yet some plans are nearly identical, except for what you pay.

Many workers and retirees think they pay too much for health coverage. What some don’t realize, or forget, is that Uncle Sam pays most of the premium — anywhere from 70%-75%. For example: Blue Cross Blue Shield offers a popular standard self-only plan that costs a total of $352.68 per pay period.

Out of that the government pays $235.77 while the employee/retiree pays only $116.91. Next year the employee-retiree share of the premium will rise only $4.68. It won’t take much of a pay raise to cover that.

Plans favored by retirees generally have higher premiums because they have higher payouts. Younger, healthier people tend to shop around during the open season. Most retirees stay put, year after year.

If you look at the 2020 health plans there are some happy surprises. The popular APWU plan is a good example. Although it’s a postal union plan, any fed or retiree can belong. Next year three options offered by the APWU plan will actually cost workers and retirees between $5.59 and $21.15 less every two weeks.

GEHA’s nationwide benefit plan is also reducing employee premiums between 55 cents and $8.66 per pay period, meaning they pay less, not more, next year. And with a pay raise you could actually see more, in some cases a lot more, in your 2020 take home pay.

The key is shopping. And if you do it you can probably boost your take-home pay next year, even if the 2020 pay raise fizzles at the last minute.

So how do you view your health plan?

Nearly Useless Factoid

By Amelia Brust

The globe skimmer dragonfly, or pantala flavescens, has the longest migratory journey of any insect in the world. It flies about 11,185 miles across the Indian Ocean, between India to East Africa, stopping in the Maldives and the Seychelles.

Source: The Guardian

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