Getting the Best Health Plan Deal: An Experiment

As I’ve noted in recent columns, open season for the Federal Employees Health Benefits Program provides an opportunity to consider switching plans and potentially saving some money. Before this year’s open season ends on Monday, I wanted to provide an update on the non-scientific experimentI conducted with five friends this year. They switched from the Blue Cross Blue Shield Standard Option to the new Aetna Direct high deductible health plan during last year’s open season. This plan was new for 2015 and was designed to work with retirees who are enrolled in Medicare parts A & B.

Three of my friends who made the switch -- Ellie, Sharon and Edie -- are widows in good health who range in age from 72 to over 90. All three of them have decided to stay in Aetna Direct, which, with a self-only enrollment, provides a health fund of $750 a year for out of pocket expenses. (Self plus one or self and family enrollments provide bigger funds.) Ellie, Sharon and Edie all will carry unused health fund dollars into 2016. The self only monthly premium for 2016 is $118.33.

For my two other friends, Wanda and Cliff, deciding whether to remain in Aetna Direct or go back to Blue Cross Blue Shield was a more difficult call. Because they needed expensive non-generic drugs, their health fund dollars were quickly exhausted. After the health fund was used up, they had to pay 100 percent of allowable charges until they met the deductible. (Deductibles for 2016 are $1,500 for self only, and $3,000 for self plus one or self and family enrollment.)

Nevertheless, Wanda and Cliff believe they’ve saved money by using Aetna Direct, because premiums are lower. So they’ve decided to remain covered for 2016. The self plus one premium will be $259 per month, compared to $501 for the Blue Cross Blue Shield standard option. So Wanda and Cliff will save $2,900 a year in premiums. Add in a $1,500 health fund, and they have a $4,400 head start before Aetna Direct will start costing more than Blue Cross Blue Shield.

According the the Consumers’ Checkbook Guide to Health Plans for Federal Employees and Abbuitants, other options for retirees who have Medicare A & B as their primary insurance include MHBP HDHP, APWU CDHP, GEHA Standard Option, NALC CDHP, NALC High Option, SAMBA Standard Option, and Blue Cross Basic Option.

One cautionary note: Retirees who have Medicare as their primary insurance must be sure to find doctors and providers who accept Medicare assignment -- that is, they accept the Medicare-approved payment amount as full payment. You can use Medicare’s tool to find doctors who are participating in Medicare and who accept assignment.

I received an email from a retiree who lives in Arizona and uses a Mayo Clinic facility located in the area. Although this facility provides medical services to Medicare patients, it doesn't accept assignment from Medicare for professional and physician services. It follows an established fee schedule based on the federal guidelines for Medicare patients, which allows health care organizations to charge up to 15 percent above the Medicare allowable fee. The patient is  responsible for the portion above the Medicare allowable amount.

Candice Sanchez, director of strategic planning for Aetna federal plans, said this is an “extremely rare situation,” and noted that a recent Kaiser Foundation study found that 96 percent of providers in the U.S. participate with Medicare, meaning they accept Medicare assignment. Other Mayo Clinic locations, she pointed out, are in Aetna’s network.

This just goes to show how important it is to explore all of your options in detail. That includes looking at plans available in specific areas or offered to specific groups, such as foreign service officers or rural letter carriers.

At the very least, if you’re a family of two, be sure to downgrade from self and family coverage to the new self plus one category before open season is over.

Correction: The original version of this column should have indicated that for prescription drugs and medications, Aetna Direct waives the deductible if the insured person is enrolled in Medicare parts A and B and Medicare is the primary insurer. The column has been updated to correct the error. 

(Image via LeventeGyori/Shutterstock.com)