- The Washington Times - Monday, November 30, 2009

The last thing most of us want to do is conjure up the prospect of having a major illness or accident over the next few months. Or ever.

Nor do we want to dwell on how we would pay the medical bills if we were hit with cancer, a stroke or the need for open-heart surgery.

But between now and Dec. 14 (the last day of the current federal health plan open season) you need to think long and hard about what a worst-case-scenario event would do to you and your family next year.

Could you pay major medical bills without spending down your 401(k) plan or being forced to sell your house or pull the children out of college?

There is a solution, and the two magic words are: catastrophic coverage.

That is protection against massive bills that could break your personal bank. Huge and never-ending medical bills are one of the primary reasons people go bankrupt and lose their homes.

All of the above means you need to find a health plan that - after your out-of-pocket bills have hit a certain limit - will take over and pay the rest of your bills for medical treatment. In some cases, they can easily run into six figures.

During the annual federal health insurance open season, many people typically focus on two things: One is how big their premiums are going to be in the upcoming year, and second is specific benefits for their medical situation.

Both are important. Very important. Paying the highest premium doesn’t guarantee the best coverage. However, picking a plan simply because it has the lowest premiums is not the way to get the most comprehensive coverage.

Walton Francis, author of Consumers’ Checkbook’s Guide to Health Plans, agrees that catastrophic coverage is the No. 1 factor. He has written the popular guide for more than 30 years.

Mr. Francis says all of the federal health plans offer catastrophic-coverage ranging from good to excellent. He says it’s important because there is a 5 percent chance that all of you reading this (including me) will have a medical event (illness or accident) next year that will cost more than $25,000. Who pays what and how much is based on your insurance plan.

The older you get, the more likely that you will incur much higher medical costs.

Mr. Francis said people below age 55 will have total costs (premiums and out-of-pocket expenses) of less than $1,700 on average next year if they enroll in health maintenance organizations (HMOs) offered by Kaiser, MD-IPA or CareFirst Blue Cross.

The same people with a fee-for-service plan in 2010 will, on average, shell out more money than with an HMO. Those who pick the Blue Cross basic plan or the Foreign Service or GEHA standard plans will pay out a total of about $1,700 to $1,900 on average.

The total costs for an “average” medical year in 2010 is more than double in many cases for older workers and retirees, even if they have Medicare coverage.

So which plans offer the best catastrophic coverage? Which require you to spend the least amount of your own money before they take over?

Mr. Francis says some of the HMOs offer the best catastrophic coverage ( MD-IPA and CareFirst Blue Cross), taking over after self-only plans’ bills have hit the $3,500 level. At the other end of the scale you could have to pay out as much as $7,000 yourself (Coventry standard option) before the catastrophic coverage would take over.

Among fee-for-service plans, the catastrophic limits are higher, around $5,600 for Blue Cross basic, Foreign Service and the Association plans, with your out-of-pocket limit being $15,000 to $16,000 for the Mail Handlers plan.

So how do you pick the best plan for you and your family? Look at the Checkbook Guide in many bookstores, or order it for $24.95 at www.checkbook.org or by calling 800/213-7283. Or you can go online at www.guidetohealthplans.org.

The National Active and Retired Federal Employees Association’s magazine in its December issue is devoted to health plan shopping for retired feds. In an exclusive offer to readers of The Washington Times, NARFE will send them a free copy of its December Open Season guide. Supplies are limited so call right away. The number is 800/627-3394.

Checklist: So what do you look for in a health plan?

c The catastrophic-coverage limits.

c Participating physicians. (Make sure your favorite doctor will be in the plan’s preferred provider network next year.) Always use the plan’s PPO (preferred provider option) or be prepared to pay an arm and a leg for going outside the network.

Blue Cross-Blue Shield’s standard-option plan is the most popular among government workers and especially retirees.

It’s a great plan, but premiums are going way up next year. You do have alternatives, however, that will cost less and provide good coverage. Getting the best plan for you and your situation should provide a lot of peace of mind. Don’t do what most people do best: nothing. A little homework and cross-checking could take you a long way in the right direction.

c Mike Causey’s Federal Report runs Mondays. Contact him at mcausey@federalnewsradio.com or 202/895-5132.

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