Which Fed Employee Health Insurance Plan?

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tomwood
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Which Fed Employee Health Insurance Plan?

Post by tomwood » Sun Jun 23, 2019 3:50 pm

My wife and I are both in our 30s and we have young children. Everyone is healthy and we only used health insurance for wellness care this past year and a half except one urgent care facility visit.

I found this option in my area and it appears to be a great value. It is a low cost plan but also has a reasonable deductible and cheap copayments.
Blue Cross and Blue Shield Service Benefit Plan FEP Blue Focus - FEP Blue Focus (13)

Is anyone familiar with this health insurance plan? Are there any other suggested plans which should be consider for my family? This plan is low cost but cheaper options would be good.

FederalFIRE
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Re: Which Fed Employee Health Insurance Plan?

Post by FederalFIRE » Sun Jun 23, 2019 4:13 pm

The best plan is also going to have a lot to do with providers available in your area. I've used Blue Cross Blue Shield Federal Employee Program (FEPBlue) basic for about 7 years and it's good for what we need where we are. One thing I wanted when switching from my previous provider to FEPBlue was keeping my primary care physician, so that was one boundary condition for selecting.

It's always worth keeping in mind that you can change your plan every year, so if you make a bad selection you're only stuck with it for a year. Same thing with vision and dental - I only get vision insurance every 3rd year or so when I want to get refreshed glasses.

delamer
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Re: Which Fed Employee Health Insurance Plan?

Post by delamer » Sun Jun 23, 2019 4:19 pm

Not familiar with the plan you are considering, but GEHA Standard provides good, low cost coverage.

As noted earlier, the ability to switch plans each year if your first choice doesn’t meet your needs is great.

bayview
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Re: Which Fed Employee Health Insurance Plan?

Post by bayview » Sun Jun 23, 2019 5:05 pm

We use BCBS Basic (as employee and retiree.) It has worked fine.

One thing you might want to keep in mind is that if you have a “schedulable” high-dollar procedure (major joint replacement, etc) coming up, especially if it involves a lot of pre-op and post-op rehab, you might switch to the higher plan (e.g. BCBS Standard) in the autumn open season and have the surgery in the next calendar year for better coverage. Then drop back down to to Basic in the next open season.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

bsteiner
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Re: Which Fed Employee Health Insurance Plan?

Post by bsteiner » Sun Jun 23, 2019 5:31 pm

If cost isn't an issue, which plans have a broad network, low or no deductibles, and modest co-pays?

stan1
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Re: Which Fed Employee Health Insurance Plan?

Post by stan1 » Sun Jun 23, 2019 5:49 pm

Maybe this table will help? This shows you the three different BCBS PPO plans. You can compare the three and see if Focus still is the best for you.
https://www.fepblue.org/benefit-plans/c ... plans-2019

If you need a non-generic prescription drug you might not want Focus, but you can switch to a different plan if something comes up in the future.

You can also go to the FEHB website and look through the other plans and HMOs for your area. Some people like Kaiser; others do not.

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travelogue
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Re: Which Fed Employee Health Insurance Plan?

Post by travelogue » Sun Jun 23, 2019 5:58 pm

We find Kaiser to offer a good value if that’s available in your area.

skepticalobserver
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Re: Which Fed Employee Health Insurance Plan?

Post by skepticalobserver » Sun Jun 23, 2019 6:19 pm

We had GEHA for a long time. Never a problem.

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grabiner
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Re: Which Fed Employee Health Insurance Plan?

Post by grabiner » Sun Jun 23, 2019 7:56 pm

For any of the plans with a high-deductible option, the high-deductible plan is almost certainly going to come out ahead.
The plan makes a contribution to your HSA, and you get a tax benefit from maxing out the HSA (compared to contributing the same amount to a Roth IRA or TSP). The value of those benefits is about equal to the deductible, depending on your tax rate. Therefore, even if you use the entire deductible and would have paid nothing under the standard plan, you come close to breaking even, and the HDHP provides better coverage than the conventional plan once you have met the deductible. You will pay more in medical bills, but the money will already be in the HSA to pay for them.

You still need to choose your insurer; if you see a doctor who is only in the Blue Cross network, you should use the Blue Cross plan even though Blue Cross doesn't offer one. But if you don't have such issues, the HDHPs are generally the most cost-efficient.

One caution: If you would think twice about seeing a doctor or filling a prescription because of the potential bill, you should use a plan with low co-payments for your own health.
Wiki David Grabiner

stan1
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Re: Which Fed Employee Health Insurance Plan?

Post by stan1 » Sun Jun 23, 2019 8:04 pm

Good point on an HDHP plan. OP sounds like they might be a good candidate. Again they just have to look at the plans to see how the benefits they need are covered. Non-generic prescription drug costs have become a key differentiator in post-ACA FEHB plans. If you need a non-generic prescription for a chronic condition you have to look closely at each plan's formularies and cost reimbursement.

gtd98765
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Re: Which Fed Employee Health Insurance Plan?

Post by gtd98765 » Sun Jun 23, 2019 8:20 pm

This comparison book is definitely worth the $11 it costs. Helps you compare the plans, gives you options to plug in how much health care your family needs each year and compare costs.

https://www.checkbook.org/newhig2/hig.cfm

Tdubs
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Re: Which Fed Employee Health Insurance Plan?

Post by Tdubs » Sun Jun 23, 2019 8:25 pm

gtd98765 wrote:
Sun Jun 23, 2019 8:20 pm
This comparison book is definitely worth the $11 it costs. Helps you compare the plans, gives you options to plug in how much health care your family needs each year and compare costs.

https://www.checkbook.org/newhig2/hig.cfm
See if your agency subscribes to Checkbook for you. At least for my agency, Checkbook is available free through Employee Express.

motorcyclesarecool
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Re: Which Fed Employee Health Insurance Plan?

Post by motorcyclesarecool » Sun Jun 23, 2019 10:48 pm

Here is a quick-and-dirty analysis:
Toss your EOBs for the past year into a spreadsheet. Assume that all the insurance companies' negotiated rates will be similar. Determine your total outlay for BCBS, including premium and all copays for the entire year.

Now take the figures the EOBs, and compute a reasonable estimate of the costs with another plan.

I did this analysis after the birth of a child. I knew we were trying for a baby and had assumed that a High Deductible Health Plan would be a bad idea. I combed through the brochures and found that NALC High plan had full maternity coverage with zero copay, and a lower premium than any BCBS plan available to me. After the baby was born, and during the subsequent FEHB Open Season, I determined that we would have come out ahead with the GEHA High Deductible Health Plan (HDHP). I don't remember how much exactly, but it was over a thousand dollar difference. The key is, you've got to be ok with paying $100 to see the pediatrician for an ear infection prior to hitting your deductible. Those low deductibles and $20 copays are expensive in the long run. The insurance company gets their money either way. I'd rather have a low premium and high deductible. See my sig line.

Every year I re-run the analysis, and every year I've stuck with GEHA HDHP. This past open season, several HDHPs changed how much of the premium "passes through" to your HSA, and I considered switching to a different insurer, but stuck with GEHA. I was pretty active in last year's open season thread. I'll definitely start or participate in the FEHB / HSA thread for next open season.

Consider HDHP. With discipline, it appears to be the best option in the FEHB ecosystem.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Swansea
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Re: Which Fed Employee Health Insurance Plan?

Post by Swansea » Mon Jun 24, 2019 5:16 am

bayview wrote:
Sun Jun 23, 2019 5:05 pm
We use BCBS Basic (as employee and retiree.) It has worked fine.

One thing you might want to keep in mind is that if you have a “schedulable” high-dollar procedure (major joint replacement, etc) coming up, especially if it involves a lot of pre-op and post-op rehab, you might switch to the higher plan (e.g. BCBS Standard) in the autumn open season and have the surgery in the next calendar year for better coverage. Then drop back down to to Basic in the next open season.
+1 Standard is more generous with PT visits.

RJC
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Re: Which Fed Employee Health Insurance Plan?

Post by RJC » Mon Jun 24, 2019 7:02 am

Another one for BCBS Basic. We had GEHA previously but costs added up since the co-pay is usually just a percentage (~15%) of the total bill. GEHA also has an annual deductible of 350/700...

daheld
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Re: Which Fed Employee Health Insurance Plan?

Post by daheld » Mon Jun 24, 2019 7:31 am

I use APWU "low option" and personally love it.

umfan11244
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Re: Which Fed Employee Health Insurance Plan?

Post by umfan11244 » Mon Jun 24, 2019 7:57 am

We’re with BCBS basic and really can’t complain. There’s something to be said for having a plan that requires little to no thought and will not surprise you with a big bill. We pair it with the FSA account.

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dm200
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Re: Which Fed Employee Health Insurance Plan?

Post by dm200 » Mon Jun 24, 2019 8:12 am

travelogue wrote:
Sun Jun 23, 2019 5:58 pm
We find Kaiser to offer a good value if that’s available in your area.
Not a Fed - but a big Kaiser fan as well.

UALflyer
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Re: Which Fed Employee Health Insurance Plan?

Post by UALflyer » Mon Jun 24, 2019 1:38 pm

grabiner wrote:
Sun Jun 23, 2019 7:56 pm
For any of the plans with a high-deductible option, the high-deductible plan is almost certainly going to come out ahead.
You post this a lot even though the answer is actually significantly more nuanced than that and depends on the structure of each plan, your actual healthcare expense categories, etc... In short, there are a ton of non HDHP plans out there that for a lot of people end up being cheaper than their HDHP counterparts (the opposite is also true).

I previously went through your arguments and your math and pointed out how your conclusion that "the high-deductible plan is almost certainly going to come out ahead" is frequently wrong: viewtopic.php?t=232140

There's nothing wrong with HDHP's and many can certainly save their customers money, but you shouldn't be overstating their financial benefits.

Cash
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Re: Which Fed Employee Health Insurance Plan?

Post by Cash » Mon Jun 24, 2019 9:20 pm

GEHA HDHP. Includes annual physicals, annual eye exams, and semiannual dental cleanings. Puts money directly into an HSA, plus you can top it off with your own pretax money through payroll deductions.

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Re: Which Fed Employee Health Insurance Plan?

Post by grabiner » Mon Jun 24, 2019 10:48 pm

UALflyer wrote:
Mon Jun 24, 2019 1:38 pm
grabiner wrote:
Sun Jun 23, 2019 7:56 pm
For any of the plans with a high-deductible option, the high-deductible plan is almost certainly going to come out ahead.
You post this a lot even though the answer is actually significantly more nuanced than that and depends on the structure of each plan, your actual healthcare expense categories, etc... In short, there are a ton of non HDHP plans out there that for a lot of people end up being cheaper than their HDHP counterparts (the opposite is also true).

I previously went through your arguments and your math and pointed out how your conclusion that "the high-deductible plan is almost certainly going to come out ahead" is frequently wrong: viewtopic.php?t=232140

There's nothing wrong with HDHP's and many can certainly save their customers money, but you shouldn't be overstating their financial benefits.
I rechecked your post there, and I still don't see where the math works this way. (The non-math argument against an HDHP, that it gives an incentive to forgo needed care, is important for many people.)

The comparison to make is the following:

HDHP with a maxed-out HSA, $X in medical costs, $Z in dental/vision costs, and $Z in a limited-expense flexible spending account. The plan contributes $A to your HSA, and you contribute $B-A.
Conventional plan with $Y in medical costs, $Z in dental/vision costs, and $Y+Z in a conventional flexible spending account (or the max allowed if Y+Z is higher), and any cost difference as an additional contribution to the Roth TSP.

Let your tax rate be T. Then the cost of the HDHP is 1-T times the premium, minus A, minus T times B, plus X, plus 1-T times Z. The cost of the conventional plan is 1-T times the premium, plus 1-T times Y, plus 1-T times Z. The terms of 1-T times Z cancel out (unless the conventional plan causes you to go over the FSA limit, so allowing them to cancel slightly favors the conventional plan).

So you can now work it out. For GEHA family coverage, for example, the HDHP costs $5.29 more per month, a total of $63. You get $1800 contributed to your HSA, and save $5200*T on your HSA contribution. Therefore, you come out ahead with the HDHP if

1737+5200*T > X-(1-T)*Y.

In a 22% tax bracket, 5200*T is $1144, so this formula becomes

2881 > X-.78Y.

The worst case here is X=3000, which is the full HDHP deductible, as the HDHP provides better coverage than the standard plan once you have met the deductible. So, for the conventional plan to be better, you must hit the HDHP deductible and have expenses of less than $153 with the conventional plan. This is essentially impossible.

In a 12% tax bracket, $5200*T is $624, so the formula becomes

2361 > X-.88Y.

Thus the conventional plan comes out ahead if you are in the 12% tax bracket, pay no state tax, you hit the $3000 deductible with the HDHP and have expenses less than $613 with the conventional plan. This is just barely possible, but you can't plan for expenses this precisely, and the difference will be very small; change the HDHP costs to $2000 or $3500 (representing $13,000 in total costs) and the HDHP comes out well ahead.
Wiki David Grabiner

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Re: Which Fed Employee Health Insurance Plan?

Post by UALflyer » Tue Jun 25, 2019 6:52 am

grabiner wrote:
Mon Jun 24, 2019 10:48 pm
I rechecked your post there, and I still don't see where the math works this way.
Please re-read my explanations there, as you've made several mistakes in your calculations here that I also pointed out to you, several times, in that thread.

Once again, one of the critical things that you keep missing is the fact that with a PPO, the nature of your healthcare expenses has a critical effect on your bottom line. With an HDHP, for instance, if you have $3K in non-preventative healthcare expenses, that entire amount comes out of pocket. With GEHA's standard PPO, all your diagnostic testing and labs are covered at 100% with your LabCard, emergency care associated with accidental injuries is covered at 100% for the first 72 hours and office visits and prescriptions are only subject to small co-pays. So, depending on the nature of the charges, with a PPO the exact same healthcare spending can only end up costing you a couple hundred dollars or even zero, which is something that your analysis consistently misses.

Likewise, in the exact same thread I explained the issues with your reliance on a limited purpose FSA's that you can get with an HDHP.

The above differences become even more significant for part time employees.
have expenses of less than $153 with the conventional plan. This is essentially impossible.
Not only is it possible, but it is actually very easy to accomplish. Under the PPO, you can have thousands and tens of thousands of dollars in expenses with practically no out of pocket expenses. This is something that I explained several times in the thread above. Not all PPO members will end up with this out of pocket cost, as it very much depends on the nature of your healthcare spending, but quite a few of them will, as it's a fairly common scenario.

Speaking of impossible or at least highly improbable and impractical, the way that you are attempting to introduce limited purpose FSA's into the calculations is just not the way that they get used in real life. I've already addressed these issues in the thread above.
(The non-math argument against an HDHP, that it gives an incentive to forgo needed care, is important for many people.)
It's not just important for "many" people. It's a critical consideration for ALL people. As I mentioned in that thread, if you break a leg, of course you'll seek medical care regardless of whether you have an HDHP, but there are quite a few serious and even deadly medical conditions out there that do not manifest themselves in an obvious way, and even the healthiest people can end up with them. With an HDHP, no matter how you slice it, you are spending your own money until you hit the deductible, so you have a very powerful financial incentive to abstain from medical care for conditions that you do not consider to be serious. If you are wrong, the repercussions can be quite serious. Many of those who pick the HDHP fail to give appropriate weight to the above issue by convincing themselves that it'll have no impact on their decision to seek care, whereas the reality tends to be very different.

When you combine it with the fact that, as I showed above, a standard GEHA PPO can actually be cheaper, there are plenty of rather compelling arguments against the HDHP. It does very much depend on your overall situation, but neither plan is a slam dunk.
Last edited by UALflyer on Tue Jun 25, 2019 9:18 am, edited 1 time in total.

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dm200
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Re: Which Fed Employee Health Insurance Plan?

Post by dm200 » Tue Jun 25, 2019 8:55 am

An "observation" that past low health/medical expenses is no guarantee of future such expenses. "Risk Management" is also an important factor.

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Re: Which Fed Employee Health Insurance Plan?

Post by stan1 » Tue Jun 25, 2019 9:07 am

dm200 wrote:
Tue Jun 25, 2019 8:55 am
An "observation" that past low health/medical expenses is no guarantee of future such expenses. "Risk Management" is also an important factor.
For young healthy families with an emergency fund it may well be that an HDHP or a low premium policy such as BCBS Focus works fine. Would I go on BCBS Focus if I was 60, diabetic, obese, on a dozen different medications, and had previously been treated for cancer? No.

One advantage of the FEHB is that you can choose a different plan every open season in November so your maximum exposure is one year's maximum out of pocket. That mitigates some of the risk of long term changes to your health needs. Formularies and coinsurance for non-generic high cost prescription drugs are one of the major differentiators between FEHB plans these days along with out of network coverage. If you eventually need an expensive drug for a chronic condition you can switch plans to mitigate risk.

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Re: Which Fed Employee Health Insurance Plan?

Post by dm200 » Tue Jun 25, 2019 9:28 am

stan1 wrote:
Tue Jun 25, 2019 9:07 am
dm200 wrote:
Tue Jun 25, 2019 8:55 am
An "observation" that past low health/medical expenses is no guarantee of future such expenses. "Risk Management" is also an important factor.
For young healthy families with an emergency fund it may well be that an HDHP or a low premium policy such as BCBS Focus works fine. Would I go on BCBS Focus if I was 60, diabetic, obese, on a dozen different medications, and had previously been treated for cancer? No.
One advantage of the FEHB is that you can choose a different plan every open season in November so your maximum exposure is one year's maximum out of pocket. That mitigates some of the risk of long term changes to your health needs. Formularies and coinsurance for non-generic high cost prescription drugs are one of the major differentiators between FEHB plans these days along with out of network coverage. If you eventually need an expensive drug for a chronic condition you can switch plans to mitigate risk.
Yes! This ability to switch ever year is a tremendous advantage for Federal employees.

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Re: Which Fed Employee Health Insurance Plan?

Post by grabiner » Tue Jun 25, 2019 9:40 am

stan1 wrote:
Tue Jun 25, 2019 9:07 am
dm200 wrote:
Tue Jun 25, 2019 8:55 am
An "observation" that past low health/medical expenses is no guarantee of future such expenses. "Risk Management" is also an important factor.
For young healthy families with an emergency fund it may well be that an HDHP or a low premium policy such as BCBS Focus works fine. Would I go on BCBS Focus if I was 60, diabetic, obese, on a dozen different medications, and had previously been treated for cancer? No.
Actually, the HDHPs may be best in these situations. For most of the federal HDHPs, the coverage past the deductible is better on the HDHP than on the conventional plan. Therefore, if your expenses are well above the deductible, there may not be that much cost difference between the HDHP and the conventional plan, and the HDHP gives you the benefit of the employer HSA contribution plus the tax savings on your own HSA contribution (which you will use immediately).
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dm200
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Re: Which Fed Employee Health Insurance Plan?

Post by dm200 » Tue Jun 25, 2019 9:49 am

Boglehead "logic" might not always be consistent with family harmony!

While we all might agree that a lower premium will, almost certainly, come out ahead financially - despite having to pay more in case of illness, injury, etc., one's spouse might not be happy when there is a need to pay quite a bit for such circumstances. We might, then, be accused of being "cheap" at the cost of health and wellness. I suggest engagement and involvement of the spouse to get full "buy in" for the choices. :happy

Over the decades, I have been accused of being too "cheap" about things that were important to my wife - [fortunately not for medical/health choices, though]

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Re: Which Fed Employee Health Insurance Plan?

Post by Tdubs » Tue Jun 25, 2019 10:35 pm

UALflyer wrote:
Tue Jun 25, 2019 6:52 am
grabiner wrote:
Mon Jun 24, 2019 10:48 pm
I rechecked your post there, and I still don't see where the math works this way.
Please re-read my explanations there, as you've made several mistakes in your calculations here that I also pointed out to you, several times, in that thread.

Once again, one of the critical things that you keep missing is the fact that with a PPO, the nature of your healthcare expenses has a critical effect on your bottom line. With an HDHP, for instance, if you have $3K in non-preventative healthcare expenses, that entire amount comes out of pocket. With GEHA's standard PPO, all your diagnostic testing and labs are covered at 100% with your LabCard, emergency care associated with accidental injuries is covered at 100% for the first 72 hours and office visits and prescriptions are only subject to small co-pays. So, depending on the nature of the charges, with a PPO the exact same healthcare spending can only end up costing you a couple hundred dollars or even zero, which is something that your analysis consistently misses.

Likewise, in the exact same thread I explained the issues with your reliance on a limited purpose FSA's that you can get with an HDHP.

The above differences become even more significant for part time employees.
have expenses of less than $153 with the conventional plan. This is essentially impossible.
Not only is it possible, but it is actually very easy to accomplish. Under the PPO, you can have thousands and tens of thousands of dollars in expenses with practically no out of pocket expenses. This is something that I explained several times in the thread above. Not all PPO members will end up with this out of pocket cost, as it very much depends on the nature of your healthcare spending, but quite a few of them will, as it's a fairly common scenario.

Speaking of impossible or at least highly improbable and impractical, the way that you are attempting to introduce limited purpose FSA's into the calculations is just not the way that they get used in real life. I've already addressed these issues in the thread above.
(The non-math argument against an HDHP, that it gives an incentive to forgo needed care, is important for many people.)
It's not just important for "many" people. It's a critical consideration for ALL people. As I mentioned in that thread, if you break a leg, of course you'll seek medical care regardless of whether you have an HDHP, but there are quite a few serious and even deadly medical conditions out there that do not manifest themselves in an obvious way, and even the healthiest people can end up with them. With an HDHP, no matter how you slice it, you are spending your own money until you hit the deductible, so you have a very powerful financial incentive to abstain from medical care for conditions that you do not consider to be serious. If you are wrong, the repercussions can be quite serious. Many of those who pick the HDHP fail to give appropriate weight to the above issue by convincing themselves that it'll have no impact on their decision to seek care, whereas the reality tends to be very different.

When you combine it with the fact that, as I showed above, a standard GEHA PPO can actually be cheaper, there are plenty of rather compelling arguments against the HDHP. It does very much depend on your overall situation, but neither plan is a slam dunk.
I think UALflyer is right about the flaw in Gabiner's math, though I'm still not sure the new math favors the standard plan. I'm pretty much exhibit A in his case against the GEHA HDHP. This is my first year with a GEHA HDHP and an HSA account. I chose the HDHP after reading all the threads here on how great a federal HDHP was. I looked at Checkbook--it assured me that whether I had high, medium, or low medical expenses, the HDHP was the winner. So, I jumped in with $8,000 in contributions going into HSA Bank this year.

I hit the $3k deductible in about four months from nothing more than office visits and lab tests by my family. It was kind of jaw dropping to watch. I don't see where Gabiner's math covers the difference between paying retail for office visits, labs, and prescriptions in the GEHA HDHP vs. the limited expenses of the standard plan, but wow I longed for the good old days of office copays. The bills flowed in so fast I gave up any thought of paying out of pocket and tapped the HSA for about 70% of it all. Now that I have hit the deductible, I'm in that happy place where office visits cost five bucks, prescriptions cost almost nothing, I look forward to my colonoscopy(!), and the HSA is filling up. Now, I am trying to figure out if this was worth it.

I can make a case that the HDHP still might be best for my family. With our expenses, I am certain to get to the $3,000 or $700 deductible every year no matter which plan I use. With the exception of ER accident visits and some labs, we know that after the deductible is met, the HDHP is a better plan. The real debate focuses on teasing out scenarios with the $3000 vs $700 deductibles. GEHA gives you $1,800. So the difference is really $1,200 vs $700. As Garbiner notes, the HDHP is, I think, $67 cheaper. So Call it $1,130 vs $700. With the GEHA HDHP, however, you get one benefit the standard plan doesn't provide--vision care. I dropped my supplementary vision plan because of the HDHP coverage, saving me about $500/yr taxable. That gets us down near even with the Standard Plan deductible of $700.

As UALflyer notes, however, you still have the problem of paying retail in the HDHP. One office visit with labs could easily exceed $1,000, and it did for me in February. It wasn't even unusual testing. And without copays in the HDHP, $700 gets you maybe four office visits, three if it is a specialist. In the standard plan, you could go a dozen times, get multiple labs, and still not hit the deductible. So it is easy to see a sweet spot for the standard plan where you could save a few hundred dollars over the HDHP depending on the services you use.

But then we have the FSA vs. HSA. Since we have applied the $1,800 GEHA donation to the deductible, it is left out of the discussion here. My $8,000 HSA is really $6,200 that I can save from my pay vs. $2,700 in the FSA. So the true difference is the extra $3,500 untaxed I can save to the HSA that I can't with the standard plan. Assuming 30% tax saving from federal and state in the HSA, that gets me a little over $1,000. That is probably more saving than the potential loss the HDHP might incur vs. the standard plan in covering deductibles.

So I think the HDHP still comes out a little ahead in just about any case, by the hair of its chinny chin chin.

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Re: Which Fed Employee Health Insurance Plan?

Post by UALflyer » Wed Jun 26, 2019 5:21 pm

Tdubs wrote:
Tue Jun 25, 2019 10:35 pm
The real debate focuses on teasing out scenarios with the $3000 vs $700 deductibles. GEHA gives you $1,800. So the difference is really $1,200 vs $700.
It depends on the nature of your healthcare expenses, but for a lot of people comparing spending $1,200 (the difference between the $3K HDHP deductible and the $1,800 pass through contribution) under GEHA's HDHP and $700 under GEHA's standard plan is apples and oranges.

Since accidental injuries are covered at 100% (without any deductible or co-pays) for the first 72 hours, all outpatient labs and other tests can be covered at 100% (without any deductible or co-pays) under the LabCard benefit, office visits are only subject to small preset co-pays (no deductible), and prescription drugs are also only subject to preset co-pays (no deductible), under GEHA's standard plan you can easily have thousands and tens of thousands of dollars in healthcare bills covered by your plan without coming even close to maxing out your PPO deductible. It doesn't work this way under GEHA's HDHP, where all non-preventable expenses get applied against your deductible. Again, there's absolutely nothing wrong with GEHA's HDHP, which is a high quality plan and can certainly save a lot of people money, but people need to remember that depending on their healthcare expense categories, the $3K in expenses that get applied against the deductible under GEHA's HDHP may only cost them a couple hundred dollars or even zero under GEHA's standard plan.

So, people saying that the difference under GEHA's HDHP and PPO deductibles is effectively $500 are missing the boat with their calculations and are significantly overstating the HDHP benefits.

Tdubs
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Re: Which Fed Employee Health Insurance Plan?

Post by Tdubs » Wed Jun 26, 2019 5:58 pm

UALflyer wrote:
Wed Jun 26, 2019 5:21 pm
Tdubs wrote:
Tue Jun 25, 2019 10:35 pm
The real debate focuses on teasing out scenarios with the $3000 vs $700 deductibles. GEHA gives you $1,800. So the difference is really $1,200 vs $700.
It depends on the nature of your healthcare expenses, but for a lot of people comparing spending $1,200 (the difference between the $3K HDHP deductible and the $1,800 pass through contribution) under GEHA's HDHP and $700 under GEHA's standard plan is apples and oranges.

Since accidental injuries are covered at 100% (without any deductible or co-pays) for the first 72 hours, all outpatient labs and other tests can be covered at 100% (without any deductible or co-pays) under the LabCard benefit, office visits are only subject to small preset co-pays (no deductible), and prescription drugs are also only subject to preset co-pays (no deductible), under GEHA's standard plan you can easily have thousands and tens of thousands of dollars in healthcare bills covered by your plan without coming even close to maxing out your PPO deductible. It doesn't work this way under GEHA's HDHP, where all non-preventable expenses get applied against your deductible. Again, there's absolutely nothing wrong with GEHA's HDHP, which is a high quality plan and can certainly save a lot of people money, but people need to remember that depending on their healthcare expense categories, the $3K in expenses that get applied against the deductible under GEHA's HDHP may only cost them a couple hundred dollars or even zero under GEHA's standard plan.

So, people saying that the difference under GEHA's HDHP and PPO deductibles is effectively $500 are missing the boat with their calculations and are significantly overstating the HDHP benefits.
I guess you stopped reading.

Tdubs
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Re: Which Fed Employee Health Insurance Plan?

Post by Tdubs » Wed Jun 26, 2019 6:39 pm

Tdubs wrote:
Wed Jun 26, 2019 5:58 pm
UALflyer wrote:
Wed Jun 26, 2019 5:21 pm
Tdubs wrote:
Tue Jun 25, 2019 10:35 pm
The real debate focuses on teasing out scenarios with the $3000 vs $700 deductibles. GEHA gives you $1,800. So the difference is really $1,200 vs $700.
It depends on the nature of your healthcare expenses, but for a lot of people comparing spending $1,200 (the difference between the $3K HDHP deductible and the $1,800 pass through contribution) under GEHA's HDHP and $700 under GEHA's standard plan is apples and oranges.

Since accidental injuries are covered at 100% (without any deductible or co-pays) for the first 72 hours, all outpatient labs and other tests can be covered at 100% (without any deductible or co-pays) under the LabCard benefit, office visits are only subject to small preset co-pays (no deductible), and prescription drugs are also only subject to preset co-pays (no deductible), under GEHA's standard plan you can easily have thousands and tens of thousands of dollars in healthcare bills covered by your plan without coming even close to maxing out your PPO deductible. It doesn't work this way under GEHA's HDHP, where all non-preventable expenses get applied against your deductible. Again, there's absolutely nothing wrong with GEHA's HDHP, which is a high quality plan and can certainly save a lot of people money, but people need to remember that depending on their healthcare expense categories, the $3K in expenses that get applied against the deductible under GEHA's HDHP may only cost them a couple hundred dollars or even zero under GEHA's standard plan.

So, people saying that the difference under GEHA's HDHP and PPO deductibles is effectively $500 are missing the boat with their calculations and are significantly overstating the HDHP benefits.
I guess you stopped reading.
You'd need to substantiate the claim of "tens of thousands of dollars" that would fly under the deductible. I don't see it. The LabCard benefit is great, and I wish I had it in February, but let's be clear about what it covers. It is a limited list.

Blood testing, such as cholesterol testing
Urinalysis
Pap smears
Biopsies
Cultures, such as throat cultures

And what it doesn't cover--a much more expensive list.

Lab work ordered during hospitalization
Lab work ordered on an emergency basis
Fertility testing
Bone marrow studies
Spinal fluid tests
Mammography
X-rays
Imaging
Dental work
Other non-laboratory work

For the second list, you'd much rather have an HDHP--after the deductible.

UALflyer
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Re: Which Fed Employee Health Insurance Plan?

Post by UALflyer » Wed Jun 26, 2019 8:07 pm

Tdubs wrote:
Wed Jun 26, 2019 6:39 pm
I guess you stopped reading.
I wasn't suggesting that what you wrote was incorrect. I did not quote the rest of your post because I agreed with most of it. I only highlighted the portion that I thought could be misinterpreted by people.
You'd need to substantiate the claim of "tens of thousands of dollars" that would fly under the deductible. I don't see it.
If you have an accidental injury, an emergency room visit will run you $1K+. Something even slightly more serious than a run of the mill injury will easily run $10K+. That's just one such visit, and they are all covered at 100% without any copays or deductibles for the first 72 hours.
The LabCard benefit is great, and I wish I had it in February, but let's be clear about what it covers. It is a limited list.

Blood testing, such as cholesterol testing
Urinalysis
Pap smears
Biopsies
Cultures, such as throat cultures
LabCard is a benefit provided through Quest Diagnostics. So, anything run through Quest is going to be covered at 100%. In a lot of areas Quest has a ton of locations that will not only take labs, but will also run imaging studies, etc...
And what it doesn't cover--a much more expensive list.

Lab work ordered during hospitalization
Lab work ordered on an emergency basis
Of course, as those are run by in-house labs rather than Quest. Obviously keep in mind that if they're performed for an accidental injury, they're covered at 100% without a deductible or co-pay regardless of who runs them.
Mammography
Mammograms, including 3D mammograms, are now covered at 100% as a preventative benefit under all GEHA plans (including the HDHP), subject to age and frequency recommendations. This reflects a change in the US Preventive Services Task Force recommendation, which is followed by most insurance carriers, so it's not just GEHA that has adopted this policy.
X-rays
Imaging
As I mentioned above, a ton of Quest locations actually routinely take x-rays and perform other imaging studies.
Dental work
Health insurance policies never cover dental procedures not caused by otherwise covered accidents (yep, a double negative). The only exception to this are the limited dental benefits provided under some FEHB policies, but it doesn't have anything to do with Quest or with other medical coverage.

Again, there's nothing wrong with either plan, and both are very high quality plans. There are a lot of people though for whom one is clearly more advantageous than the other one, and the cost savings will frequently exceed $1K/year, so we aren't talking about pennies here.

UpperNwGuy
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Re: Which Fed Employee Health Insurance Plan?

Post by UpperNwGuy » Wed Jun 26, 2019 8:17 pm

I recommend Blue Cross Blue Shield Standard Option. It has served me well for many years.

Tdubs
Posts: 607
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Re: Which Fed Employee Health Insurance Plan?

Post by Tdubs » Wed Jun 26, 2019 8:57 pm

I got the list from GEHA. So they probably need to do an update to their website?

https://www.geha.com/savings/lab-card

We both recognize the accidental ER situation is a clear benefit for standard, but that is really the only scenario I can think of that potentially runs in the tens of thousands. Let's take a worst case scenario. Let's assume an accident caused visit to the ER was your only medical event all year. So, you've spent nothing in the standard plan but your premiums. With the HDHP I'd still only spend about $700 out of pocket (note vision plan savings) before I hit the deductible. A $10k ER visit would add $350 more to the bill beyond the deductible. So you would have paid about $1000 for the visit with the HDHP. But the HSA would prove decisive. You would have had no FSA expenses in the standard plan. You would lose some of its savings, likely, or, if you didn't have an FSA, you would lose the opportunity of saving at least $6200 in an HSA tax free, a net benefit of about $2,000 in tax savings. You would still come out ahead with the HDHP unless the ER cost was gigantic.

So the HSA is why the standard typically loses to the HDHP. Ironically, in low-cost scenarios for the standard plan, you are not maxing the advantages of FSA tax-free dollars to $2,700, and the tax advantage of the HSA grows.

Seama
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Re: Which Fed Employee Health Insurance Plan?

Post by Seama » Thu Jun 27, 2019 2:09 am

We made the switch last year, same situation. We figured we could save over $1,000 in a typical year for our family if we switched from BCBS Basic to BCBS Focus, without the hassle of trying to find new doctors. Then three months after open season, one of our littles had an ambulance ride, ER visit, diagnostics, follow-up appointments, etc. I hadn't considered the *never happens* sort of things so I thought we had made a really bad choice, but it turns out accidental injury is covered at 100% in the first few days. We're on track to save even more than anticipated because of the plan change. We'll keep it for next year.

UALflyer
Posts: 398
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Re: Which Fed Employee Health Insurance Plan?

Post by UALflyer » Thu Jun 27, 2019 6:59 am

Tdubs wrote:
Wed Jun 26, 2019 8:57 pm
I got the list from GEHA. So they probably need to do an update to their website?

https://www.geha.com/savings/lab-card
They're trying to give you a quick and dirty coverage guide there. You'll find very similar issues in various summaries posted for all the FEHB plans. All the plans also have summary plan descriptions readily available, which are significantly more comprehensive, but are also very long.
We both recognize the accidental ER situation is a clear benefit for standard, but that is really the only scenario I can think of that potentially runs in the tens of thousands. Let's take a worst case scenario. Let's assume an accident caused visit to the ER was your only medical event all year. So, you've spent nothing in the standard plan but your premiums. With the HDHP I'd still only spend about $700 out of pocket (note vision plan savings) before I hit the deductible. A $10k ER visit would add $350 more to the bill beyond the deductible. So you would have paid about $1000 for the visit with the HDHP. But the HSA would prove decisive. You would have had no FSA expenses in the standard plan. You would lose some of its savings, likely, or, if you didn't have an FSA, you would lose the opportunity of saving at least $6200 in an HSA tax free, a net benefit of about $2,000 in tax savings. You would still come out ahead with the HDHP unless the ER cost was gigantic.

So the HSA is why the standard typically loses to the HDHP. Ironically, in low-cost scenarios for the standard plan, you are not maxing the advantages of FSA tax-free dollars to $2,700, and the tax advantage of the HSA grows.
Although an HSA is certainly more flexible than a healthcare FSA plan, the latter isn't that inflexible either. You can carry over $500 to future years and can also use a general purpose healthcare FSA for all kinds of things (vision care expenses, massages without a prescription, sunblock, radon detection devices, etc....) that aren't your healthcare plan copays.

I previously went through the specific calculations using grabiner's preferred tax rates in the thread I linked above. In the same thread I also explained some of the ways that general purpose FSA's can be used in a way that maximizes your savings.

Keep in mind that the differences are also amplified for various types of employees, such as part time employees.

Tdubs
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Re: Which Fed Employee Health Insurance Plan?

Post by Tdubs » Thu Jun 27, 2019 7:49 am

UALflyer wrote:
Thu Jun 27, 2019 6:59 am
Tdubs wrote:
Wed Jun 26, 2019 8:57 pm
I got the list from GEHA. So they probably need to do an update to their website?

https://www.geha.com/savings/lab-card
They're trying to give you a quick and dirty coverage guide there. You'll find very similar issues in various summaries posted for all the FEHB plans. All the plans also have summary plan descriptions readily available, which are significantly more comprehensive, but are also very long.
We both recognize the accidental ER situation is a clear benefit for standard, but that is really the only scenario I can think of that potentially runs in the tens of thousands. Let's take a worst case scenario. Let's assume an accident caused visit to the ER was your only medical event all year. So, you've spent nothing in the standard plan but your premiums. With the HDHP I'd still only spend about $700 out of pocket (note vision plan savings) before I hit the deductible. A $10k ER visit would add $350 more to the bill beyond the deductible. So you would have paid about $1000 for the visit with the HDHP. But the HSA would prove decisive. You would have had no FSA expenses in the standard plan. You would lose some of its savings, likely, or, if you didn't have an FSA, you would lose the opportunity of saving at least $6200 in an HSA tax free, a net benefit of about $2,000 in tax savings. You would still come out ahead with the HDHP unless the ER cost was gigantic.

So the HSA is why the standard typically loses to the HDHP. Ironically, in low-cost scenarios for the standard plan, you are not maxing the advantages of FSA tax-free dollars to $2,700, and the tax advantage of the HSA grows.
Although an HSA is certainly more flexible than a healthcare FSA plan, the latter isn't that inflexible either. You can carry over $500 to future years and can also use a general purpose healthcare FSA for all kinds of things (vision care expenses, massages without a prescription, sunblock, radon detection devices, etc....) that aren't your healthcare plan copays.

I previously went through the specific calculations using grabiner's preferred tax rates in the thread I linked above. In the same thread I also explained some of the ways that general purpose FSA's can be used in a way that maximizes your savings.

Keep in mind that the differences are also amplified for various types of employees, such as part time employees.
Yes, you can get the $500 carried forward, but that isn't enough to make a dent in the tax advantage of an HSA. I'm trying to find a scenario where the standard actually wins. If it can't win in the ER-only scenario, where can it?

In a low cost year, the HDHP wins because the federal government hands you an extra $2000 you can't get from the standard plan's FSA. For high spend years, the fee advantages of the HDHP plan compensate for the declining advantage the HSA enjoys compared to an FSA. To make use of an FSA, you have to start incurring bills for services where the HDHP has a distinct advantage. In the end, the HDHP wins because the federal government has put its thumb on the scale.

In the previous thread on this, you noted,

"If you want to run the numbers based on the maximum FSA contributions (of which $500/year can be carried forward to future years), that's $2,250 in additional FSA contributions, which, at the same hypothetical 29.31% tax rate, results in additional tax savings of about $660, so, even after accounting for the tax savings on the entire HSA contribution, the PPO ends up being roughly $400/year cheaper."

If you are getting billed enough in the standard plan that you spend the whole $2700 in the FSA, you almost certainly have ranged into territory where the HDHP is charging you less for many of those services.

It would be nice if GEHA had a tool that would allow someone to run various scenarios through standard and HDHP, but they told me they don't have one.

UALflyer
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Re: Which Fed Employee Health Insurance Plan?

Post by UALflyer » Thu Jun 27, 2019 8:31 am

Tdubs wrote:
Thu Jun 27, 2019 7:49 am
I'm trying to find a scenario where the standard actually wins. If it can't win in the ER-only scenario, where can it?
Have you looked at the thread to which I keep referring you? The explanation and the math are in that thread, and does not actually use an ER scenario at all.
If you are getting billed enough in the standard plan that you spend the whole $2700 in the FSA, you almost certainly have ranged into territory where the HDHP is charging you less for many of those services.
As I explained in the post directly above yours, and also explained in the same thread to which I am referring you, a healthcare FSA can be used for things that have nothing whatsoever to do with your healthcare plan deductibles and copays. There's an enormous list of eligible expenses that do not require a prescription that can be reimbursed from a healthcare FSA.

Tdubs
Posts: 607
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Re: Which Fed Employee Health Insurance Plan?

Post by Tdubs » Thu Jun 27, 2019 11:49 am

UALflyer wrote:
Thu Jun 27, 2019 8:31 am
Tdubs wrote:
Thu Jun 27, 2019 7:49 am
I'm trying to find a scenario where the standard actually wins. If it can't win in the ER-only scenario, where can it?
Have you looked at the thread to which I keep referring you? The explanation and the math are in that thread, and does not actually use an ER scenario at all.
If you are getting billed enough in the standard plan that you spend the whole $2700 in the FSA, you almost certainly have ranged into territory where the HDHP is charging you less for many of those services.
As I explained in the post directly above yours, and also explained in the same thread to which I am referring you, a healthcare FSA can be used for things that have nothing whatsoever to do with your healthcare plan deductibles and copays. There's an enormous list of eligible expenses that do not require a prescription that can be reimbursed from a healthcare FSA.
This is my first year with an HDHP and it has been an experience. If I can see where the standard plan is better, I'd take that in the next open season.

But right now I can't see many realistic scenarios where it would be less. I've read this thread and the previous one, too. I think the value of the FSA is overstated. As you note above, $500 can be carried over, and there are expenses outside the health plan it can pay for. All good. And if you can get the FSA up to the top end of its value, it might beat out the HDHP/HSA. You wrote, ""If you want to run the numbers based on the maximum FSA contributions (of which $500/year can be carried forward to future years), that's $2,250 in additional FSA contributions, which, at the same hypothetical 29.31% tax rate, results in additional tax savings of about $660, so, even after accounting for the tax savings on the entire HSA contribution, the PPO ends up being roughly $400/year cheaper."

The problems is, I don't see spending outside the health plan getting near $2700 year after year. I've used it this way too, but I never get more than a few hundred bucks outside my health plan. You might have a year of exotic expenses. To get the max, the FSA will need to support the costs within the standard plan while somehow avoiding expenses where the HDHP has a clear advantage.

To account for some FSA expenses, let's subtract $500 from my $6200 HSA savings advantage to cover the additional expenses an FSA covers outside of insurance. So rather than a $2000 tax-savings advantage for HSA, I'll call it at about $1800-1700.

Let's return to the $10k ER scenario. It is, I think, the worst-case for the HDHP, unless you can find another. After the visit to the ER, the HDHP still seems to be ahead by about $700-800 depending on FSA spending. For the two plans to pull even, you would need about another $15k in expenses covered completely free in a standard plan vs. the typical 5% fee in the HDHP (15000 x 0.05=$750). What patient will incur $15k in expenses while somehow avoiding all the areas where an HDHP has a fee advantage (we haven't even discussed its superior dental coverage)? The probability of this happening seems remote to me. I am looking for a practical, plausible scenario where this might happen. The only one I can dream up is one where two family members fall off a roof or some other collective accident. Certainly plausible, but not worth planning when many other scenarios favor the HDHP.

We can say the standard plan/FSA has lots of advantages in its fees and services over an HDHP/HSA, but is it at all likely that it will show up in the bottom line? Overall, I think the tax advantage of the HSA makes it very unlikely the standard plan proves the better choice year after year.

UALflyer
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Re: Which Fed Employee Health Insurance Plan?

Post by UALflyer » Thu Jun 27, 2019 12:07 pm

Tdubs wrote:
Thu Jun 27, 2019 11:49 am
The problems is, I don't see spending outside the health plan getting near $2700 year after year.
It's not a one size fits all situation. There is a reason that different people are on different plans. A lot of people out there find it fairly easy to max out the healthcare FSA account with eligible spending other than their actual healthcare plan co-pays and the like. If your situation is different, then you have to run the math based on your specific numbers.

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