- The Washington Times - Tuesday, March 25, 2008

Is Uncle Sam moving toward a tailor-made health care plan for active and retired federal employees?

The answer is yes, sort of.

The one-size-fits-all federal health program has expanded to offer optional dental and vision benefits. Now it is considering an optional plan (like the dental and vision policies) to cover costly hearing-loss problems.

And the Office of Personnel Management (OPM), which manages the Federal Employees Health Benefit Plan (FEHBP), also is trying to develop a three-track system with one pathway for working feds, another for Medicare-eligible retirees and a third suboption for people who enroll in Medical Savings Accounts.

Backers say the proposed changes would bring the nation’s largest health plan into the 21st century by giving people more choices. Opponents say it would Balkanize the FEHBP and is a move that could have an adverse impact on retirees and their survivors.

So, how does one build a better health care plan without rocking the boat for some participants? Think “ideal” plan.

The ideal health care plan would be custom-designed by you, for you.

It would be adjustable. It would change as we age, adjusted as age and health change, adjusted to changes in family size. But even though the plan would be tailored to our specific needs we would insist, of course, on getting the benefit paying the low premiums that come with a group plan.

The good news is that company health plans, like the giant FEHBP, offer group rates. The bad news is that group rates come with a group, forcing younger folks to fund more sickly older people and older folks who have stopped having kids to help pay for the procedures families use.

The National Association of Active and Retired Federal Employees (NARFE) says the proposal to have a plan for Medicare-eligible retirees could “open the door” to a separate plan composed largely of older, less healthy people. NARFE President Margaret Baptiste says that in turn could lead to higher premiums for the retirees.

OPM has said premiums paid by active-versus-retired federal workers wouldn’t change, but the new system would recognize that Medicare is the prime payer in many instances.

While many active and retired feds have major complaints about the FEHBP, most people outside of government would trade a key portion of their anatomy to get in it. In fact it is likely that one or more of the current presidential candidates — all whom are covered by the FEHBP — will offer it up as a model for a universal health plan.

Mistakes people make

Federal benefits authority John Elliott says the typical federal worker makes at least three big mistakes in planning for his or her career and retirement. Mr. Elliott does preretirement seminars for the National Institute of Transition Planning, and he says these are the big three mistakes:

• Failure to take advantage of the Flexible Spending Account program available to feds. It allows them to set up pretax accounts to purchase items or services not covered by their health care plan.

• Failure to take advantage of free in-house agency computer programs that let workers calculate their likely retirement benefits based on current and future salary and time in government.

• Failure to purchase Long Term Care insurance (either through the government or from a reputable outside firm) to cover what can otherwise be crippling costs associated with long-term care.

Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or mcausey@ federalnewsradio.com

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