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Advice on how to prepare for life after government.

What Really Happens When You Change Health Plans

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If you changed health plans during the 2014 open season, you might find yourself in uncharted waters this year.

I’ve been talking lately to some of my retiree friends who heard (from me) about the new Aetna Direct plan that was designed especially for retirees who have Medicare Parts A and B. They thought it seemed like a good idea to have a health plan tailor-made for their situation. So they did the unthinkable: They changed plans.

My friends, Ellie, Edie, Sharon, Wanda and Cliff (who range in age from just-turned-65 to more than 90), had been covered under the Blue Cross Blue Shield standard option for more than 30 years. So this was a big change. I don’t sell insurance, but since I was the one who introduced them to the idea of switching, I’m now the go-to person for questions about the change.

The emails, phone calls and visits started in December. Here’s a recap of how the conversion has gone so far.

Signing Up

After I told my friends about the new plan, they all were interested. “Could you help us sign up?” they asked. “Sure,” I said. “I can show you how to do this online. It’s easy.”

Wanda, Cliff, Ellie and I met one afternoon and were able to successfully enroll all three of them in the new health plan. It took a little longer than expected, because none had ever used the Office of Personnel Management’s online annuitant services. We had to set up user names and passwords, and locate my friends’ civil service annuitant numbers.

Edie couldn’t make it, so I met with her separately and we went through the same process of locating all the necessary information. Sharon took care of her enrollment herself. She had made changes before and was the most recent retiree of the group.

Prescription Drugs

Before enrolling, the main concern I pointed out to each of them was that there would be a significant change in prescription drug benefits. All but one of my friends would be considered in excellent health. So we contacted Aetna regarding the one who fills the most prescriptions. Since he uses mostly generics, this didn’t seem like it would be an issue.

For those who have more complicated prescription drug needs, switching plans could present problems. To find out exactly what they might be, you need to know if the drugs you take are generic, brand name, or specialty. You also need to know if they are formulary or non-formulary. There is also a difference if you purchase your drugs at the local pharmacy or through a mail-order program. It would also be helpful to know if your drug is tier one, tier two, tier three or tier four. (In the case of Blue Cross Blue Shield, there’s also a tier five.) Each tier has a different out-of-pocket cost.

Copayments for drugs range from $5 or $10 for a generic to as much as $30 to $50 per drug (up to a $1,200 maximum) for Aetna Direct. Blue Cross Blue Shield’s copayment for mail order drugs is $10 - $105 when Medicare Part B is primary payer -- with a waiver of the copayment altogether for some generic prescriptions. Clearly, Blue Cross Blue Shield has a superior drug benefit. This was going to be the big unknown that would only be revealed in 2015 when prescriptions would need to be refilled.

ID Cards

After all my friends were enrolled, I got a call from one of them the next week asking about new identification cards. This was early in December and the new coverage would not take effect until Jan. 1, but I got the sense she was anxious to take advantage of her new plan.

It turned out new identification cards aren’t sent until after Jan. 1 and can take up to 30 days to be received in the mail. If you need to use your insurance prior to receiving your card, you can call member services. You also can use the confirmation letter that you received after enrollment.

Cliff received his card early, but his wife didn’t. This turned out to be an issue when his wife scheduled a doctor’s appointment for early January. She was notified by the doctor’s office that she did not have insurance. I volunteered to help by calling OPM with Cliff. Here’s how that went:

  • Call One: Friday around 2:30 pm. After more than 45 minutes on hold, we were given a different number to call.
  • Call Two: After another wait of more than 45 minutes, the person who answered told us to hold while she located the correct person to assist. The call was dropped and we had to begin again.
  • Call Three: By the time the call was answered it was past 4:45 pm and I knew that quitting time was 5:00, so we were getting in under the wire. Then the line went dead at 4:50.
  • Call Four: Monday, 7:00 am. A recorded message said the phones aren’t answered until 7:40 am.
  • Call Five: Started calling at 7:40, but got the same recording. I kept hitting redial.
  • Call Six: Finally got through, and the hold time was brief. Cliff and I believed we had reached the correct person. He told us that Cliff’s wife was in fact enrolled in the self and family option under Cliff’s new health coverage, and said that sometimes this information isn’t properly communicated to the new health plan. This would be an easy fix, but the person who handles such changes had not come in yet. He said he would have her handle the change as soon as she got to work. By 1:00 pm, Cliff had still not received confirmation.
  • Call Seven: We weren’t able to find the nice person we had spoken with earlier, but someone else said they would try to help, and would get back to us a little later.
  • Call Eight: We waited, and then went higher up the chain of command. The issue was finally resolved. But even my almost limitless patience and understanding was put to the test. There has to be a better way to respond to concerns that annuitants have about their retirement benefits.

What We Learned

First of all, there are pros and cons to every health insurance decision. It’s important to understand the specific differences between the plans you’re considering to make an informed choice.

Remember that open season for the Federal Employees Health Benefits Program occurs every year. If you aren’t satisfied with the choice you’ve made, give it a year to evaluate the pros and cons and next open season you can change.

Switching health plans is not always as smooth of a process as it should be, especially for retirees who may not have made changes to their benefits in many years. This can be frightening and confusing. And while OPM receives millions of phone calls, it’s clear that its response system could be streamlined and improved.

All in all, I’m very glad to have helped my friends make a change during this past open season. Helping them has helped me learn more about the realities of why most people don’t change plans. I hope that switching plans will result in overall savings for these retirees, but only time will tell.

(Image via kurhan/Shutterstock.com)

Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at tammyflanagan.com and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on NITPInc.com.

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