💡 FEHB Plan Shopping 101: Reduce Premiums Without Gutting Coverage

Every Open Season, federal employees face the same question:

Should I switch health plans or stay put and hope for the best?

The easy answer is to look at the premium and pick whatever’s cheapest.

The right answer is to look deeper at what you’ll actually spend once you start using the plan.

Step 1: Look at the total cost, not just the premium

Premiums tell only half the story. To find your real cost, add up:

• Your annual premium (employee share)

• Expected copays and prescriptions for a “normal” year

• One “what-if” event — an ER visit, imaging, or outpatient procedure

• And finally, your catastrophic maximum (your worst-case annual exposure)

If two plans are close, the one with the lower catastrophic max usually wins. It protects your wallet when it matters most.

Step 2: Know which plan type fits your life

Here’s the simple way to decide:

• HMO: Great if your main doctors and hospital are already in-network. You’ll get predictable copays, but limited flexibility and you may need referrals.

• PPO: Best for travelers, snowbirds, or anyone who wants easy out-of-state or specialist access. It costs more, but buys convenience and freedom.

If you rarely leave your region, an HMO’s lower and steadier costs often make sense.

But if you’re on the road — or just want the comfort of options — a PPO might save you headaches later.

Step 3: Check your real-world costs—your prescriptions

One drug can completely change which plan is cheapest.

Take five minutes to:

• Look up each medication by name in the plan’s formulary

• Note its tier and any prior authorization or quantity limits

• Compare mail-order vs. retail copays (90-day supply discounts add up fast)

If you use even one specialty medication, favor plans with a lower specialty coinsurance cap — even if the premium’s a little higher.

Step 4: Verify your network before you switch

Never assume a “brand-name” hospital or provider is automatically covered.

Search your primary care doctor, top specialists, and preferred hospital by name not just the system.

Also, check the plan’s telehealth options and copays. For routine care, those visits are often faster and cheaper.

Step 5: Avoid brochure traps that quietly raise costs

Plan brochures are full of small print that can sting later. Watch for:

• “Up to” visit limits on PT or chiropractic care

• Separate in- and out-of-network deductibles

• High coinsurance rates for imaging or outpatient procedures

• Vague lines like “member pays billed charges” — a sign the plan can charge full price out-of-network

A little due diligence here can save hundreds later.

Step 6: Employees, retirees, and Medicare—different math

Active employees pay premiums pre-tax, which lowers taxable income.

Retirees, on the other hand, pay post-tax from their annuity, so the real cost may be higher.

If you’re on Medicare Part B, look for FEHB plans that coordinate benefits well or even reimburse part of your Part B premium.

And postal retirees under the new PSHB program should confirm how their coverage integrates with Medicare before making any changes.

Bottom line

Picking the right FEHB plan isn’t about chasing the lowest premium. It’s about minimizing total risk.

The best plan is the one that:

• Covers your doctors and medications

• Keeps your worst-case costs predictable

• And doesn’t make you overpay for flexibility you don’t use

Spend an hour now comparing total cost, not just price.

That single decision can free up thousands of dollars over your retirement.

Best,
—FWR