The $2,000 health premium surprise!

Federal and postal workers born in the mid-1960s stand a good chance of paying $1,000 to $2,000 more for health insurance next year. As in more than they need to spend! Retirees are at even greater risk of overpaying for coverage in their current health plan. And that has very little to do with higher health premiums (average hike 4.9%) that go into effect next January for nearly 5 million workers, retirees, survivors and dependent children in the nation’s largest employer-sponsored health plan. Many experts say the Federal Employee Health Benefits Program is the best in the nation offering workers and retirees coverage regardless of age, preexisting conditions or lifestyle. With the added bonus that there are literally dozens of plans from nationwide companies like Blue Cross and Aetna, to local health maintenance organizations with the employer paying about 72% of the total premium.

The Office of Personnel Management last week said that premiums for nonfederal workers next year are going up. Premiums rose an average 5.9% in 2020.

Premiums in the FEHBP will go up an average of just under 5% next year. That is less than many other programs in the nation and, for the average employee, works out to a modest $7.89 increase every two weeks for self-only coverage. Those with self plus one coverage will see premiums rise an average of $10.90 per pay period, while family coverage will rise an average of $10.94. Whether there will be a 2021 federal pay raise to partially offset higher premiums is unclear. The status of the 2021 federal white collar pay raise, if any, is still up in the air. The military is in line to get a 3% increase. Pro-fed members of Congress are demanding at least that amount for federal civilians. The White House has tentatively proposed a 1% raise, although pressure for ANY adjustment is minimal this year because of preoccupation with the election, the worldwide COVID pandemic and the fact that so many Americans have or are losing their jobs. While a good case can be made for a federal civilian pay raise — because so many feds are in first-responder and health and safety-related jobs — outside political and fiscal concerns.

The key factor in how much more employees, and especially retirees, will pay next year rests with policy-holders themselves. People like you!

Walton Francis, FEHBP guru for the Washington Consumers Checkbook Guide to Health Plans, says many if not most people could save $1,000 on more next year in premiums and out of pocket costs if they switched to a lower priced plan offering the same — in some cases better — coverage for what they need. In fact, only a handful of participants switch plans during the annual open seasons. This year that will run from Nov. 9 through Dec. 14. Most of those who do change plans are younger, healthier feds who shop for the best coverage without being hindered by brand loyalty. The the so-called “heavy users” (older workers or those with chronic conditions) tend to stick with the same plan year after year. Over time that so-called “adverse selection” means many plans are top-heavy with more costly customers. And they adjust premiums upward accordingly.

By spending a few hours shopping, Walton Francis says many people could save thousands of dollars and still get the same level of coverage as their current plan. This year most federal agencies will subscribe to online shopping services (Checkbook being the most popular) that workers can use from their office or home — at no cost to the employee. Some unions will also subscribe for their members. Those online services allow people to compare premiums and benefits, look up any changes in their current plans and see if their doctor(s) are part of a plans network. And in the process get excellent coverage at a much lower cost.

Francis says that all of the FEHBP plans are good to excellent. But some are better, and cheaper, than others. He’ll be my guest on an upcoming episode of Your Turn (Wednesday at 10am EDT) during the open season. We’ll also have a series of columns during the open enrollment period to help people pick the best deal for them and their families at the best price. There are also some plans that will actually pay most or all of your premiums.

Bottom line, if you do nothing, as per usual, expect to pay more. But with a little hustle you can pay much less — and in some cases building up a medical or retirement nest egg courtesy of your new health plan. Happy hunting!

Nearly Useless Factoid

By Alazar Moges

There is no “official” language at the federal level for the United States. Although the most commonly used language is English, more than 300 languages are spoken or signed by the population. However, some individual states do list English as their official language.

Source: USA.gov

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THRIFT SAVINGS PLAN TICKER

Nov 27, 2020 Close Change YTD*
L Income 22.0803 0.0276 1.01%
L 2025 10.9544 0.0282 -
L 2030 37.9069 0.12 0.12%
L 2035 11.2850 0.0393 -
L 2040 42.3283 0.1605 -0.21%
L 2045 11.5097 0.0469 -
L 2050 25.0239 0.1087 -0.56%
L 2055 11.9606 0.0607 -
L 2060 11.9606 0.0606 -
L 2065 11.9608 0.0607 -
G Fund 16.4952 0.0007 0.82%
F Fund 21.1518 0.0431 6.30%
C Fund 54.0824 0.1342 2.69%
S Fund 69.9555 0.613 3.97%
I Fund 34.2431 0.2444 -10.53%
Closing price updated at approx 6pm ET each business day. More at tsp.gov
* YTD data is updated on the last day of the month.