- The Washington Times - Monday, November 22, 2004

Several years ago, a friend of mine was being wheeled out of the hospital after a heart procedure. Before they got to the front door, the nurse wheeled him to the cashier’s office, where he was presented with a bill for about $40,000. He was urged to settle up before he left.

Don’t let that happen to you. A big medical bill could set you back or wipe you out.

That’s something federal and postal workers and government retirees don’t have to worry about, if they belong to the Federal Employee Health Benefits Program (FEHBP) and if they pick a plan that will protect them from the costs of a catastrophic medical problem or accident.

All of the FEHBP plans are good, but when it comes to certain benefits, some are better than others.

The open-enrollment season, when feds and retirees pick their 2005 health plan, ends Dec. 13. You don’t want a non-decision, which would leave you in your current health plan, to wind up costing you a lot in higher premiums, reduced benefits or vastly increased out-of-pocket costs.

Walton Francis, editor of Checkbook’s 2005 Guide to Health Plans, says catastrophic coverage is something that everyone should consider when shopping for a health plan. Checkbook ($8.95 at most newsstands) rates health plans by estimated total cost to you. That cost includes the premiums you will pay, regardless, and any out-of-pocket costs that you might incur during a good year in which you have no medical problems, a year of routine medical care or a bad year requiring catastrophic coverage.

As far as maximum protection, Checkbook ranks most of the health maintenance organizations (HMOs), such as Kaiser Permanente and MD-IPA, as best buys when it comes to catastrophic coverage. Mr. Francis says that in most of the HMOs, catastrophic coverage is good to excellent. For example, a single person with catastrophic medical bills next year could expect to pay about $4,000 in total and a family of two could expect to pay $9,000.

If you pick Blue Cross standard’s preferred provider organization (PPO) plan and have a major medical event next year, your likely total costs (premiums and out of pocket) would be less than $5,000 for a single person and a little more than $6,000 for a family of two. Costs above that would be absorbed by the health plan.

Checkbook also recommends that you look at the Foreign Service PPO plan if eligible, the Mail Handlers High Deductible Health Plan (HDHP), Blue Cross Basic PPO and the Association PPO if eligible.

Dental benefits

When it comes to dental benefits, the federal health plans — like their cousins in the private sector — are nothing to smile about. But if you shop around, you can get good coverage. For example, Checkbook recommends that you check out various HMOs that have good dental benefits and provide preventive medicine. It recommends Aetna Consumer Driven, MD-IPA, Aetna Open Access, Kaiser High Option, CareFirst, GEHA Standard Option and Blue Cross Standard Option.

Invest or else

When the Thrift Savings Plan was set up, analysts figured that the investments and income it provided would give the average federal worker about 30 cents of every dollar needed to spend in retirement. But they have upped that estimate. Now, many pros say the TSP will give about half the money needed to spend in retirement. That, of course, is provided that you invest the maximum, at least enough to get the 5 percent tax-deferred matching government contribution, invest for the long haul and not be too conservative in your investments.

One way to avoid investing too conservatively, or at too much risk, is to check out the L (as in Lifestyle) Fund coming to the TSP sometime in mid-2005. The optional L Fund will be tailored to your age and retirement goals. It will establish a mix of the TSPs other funds: three in the stock market, one in the bond market, one with Treasury securities. As you age — and get closer to retirement and the time you will start spending down your TSP account — the L Fund will automatically readjust your portfolio to protect you from short-term downturns in the market.

The L Fund is still half a year away. Right now, you have until Dec. 31 to make your investment option changes for next year. This includes new higher contribution rates and catch-up contributions for federal-military investors who are 50 or older.

Mike Causey, senior editor at FederalNewsRadio.com, can be reached at 202/895-5132 or mcausey@federalnewsradio.com.

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