November 11, 2024, marks the start of open enrollment for 2025 benefits, providing an opportunity for federal employees, retirees, and military retirees to review and adjust their Federal Employees Health Benefits (FEHB), and dental and vision plans. As expected, 2025 brings new rates and benefit adjustments that could affect your healthcare costs and coverage.

What’s new for 2025? You guessed it—benefit and rate changes.

Depending on the plan, your coverage selections (self or family), you may see your plan costs go down, remain the same, or increase. Because FEHB plans span the country, there are some states where self-only enrollees will see significant premium decreases. For example, FEHB plan participants covered by Presbyterian Health Plan Standard (PS) in New Mexico will see their premium costs decrease. However, not all plans will see a decrease. Plans with the highest increase will see premiums for self-only coverage increase by 66% in 2025.  This means it pays to review your options and your current plan coverage.

Do you use the benefits of the plan you are currently enrolled in?

Many plans are set to have significant premium cost increases. If you are not using all the benefits of your plan, this may be the year to consider switching to a plan that more closely matches your needs.  For example, of the nearly 9 million federal employees, retirees, and their family members, more than 2/3 are covered by Blue Cross Blue Shield plans. These plans are set for a historic increase in premium costs for 2025. The Blue Cross Blue Shield Basic plan for Self, Self & Family, and Self+1 all have the highest average premium increases.  However, some plans will actually see their premiums go down. For example, participants covered by self-only coverage through Presbyterian Health Plan Standard in New Mexico will see premiums decrease by 23% for 2025. Comparing plan options for 2025 could help you keep more of your hard-earned money.

6 Key Factors for Choosing Your 2025 Health Plan

With changing rates and benefits, it’s essential to evaluate your options thoroughly. Here are six important factors to consider:

1. HMO vs. PPO: Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) differ in network flexibility and cost. HMOs often have lower monthly premiums but restrict providers to a specific network, while PPOs allow greater provider choice, often at a higher premium cost.

2. Medicare Considerations: If you’re turning 65 in 2025, you’ll need to consider Medicare enrollment. For example, members of the Blue Cross Blue Shield Federal Employee Program (FEP) Basic Plan may receive up to $800 in reimbursement for Part B premiums. Understanding how FEHB plans integrate with Medicare can help optimize your healthcare spending.

3. Insurance Terms Matter: Premiums, in-network and out-of-network costs, copays, co-insurance, deductibles, and out-of-pocket maximums are crucial factors to understand. Knowing these terms can simplify plan comparisons and help you make informed decisions. A firm grasp of the terms can help you make an apples-to-apples comparison.

4. Check Coverage for Essential Medications and Services: If you depend on specific prescriptions or services, confirm that they’re covered under any new plan you’re considering. Most plans use a tiered formulary system, meaning that higher-tier drugs may come with higher out-of-pocket costs. Some plans provide coverage for various types of therapy or wellness services, while others do not. Start with your needs and then look for a plan that meets those needs.

5. Family Plans for Dual Earners: Comparing coverages can get complicated when both earners in a household have employer-sponsored plans. Reviewing both options carefully and anticipating potential healthcare costs—like braces for a teenager—can make it easier to determine which plan offers the best coverage and savings for your specific needs.

6. Seek Help When Needed: This year’s cost changes may make choosing a plan more challenging. Your financial advisor can help compare different health plan costs and coverage options. You may also want to consult your healthcare provider about your prescriptions. Your provider will be able to tell you if a generic substitute will deliver the same benefits as the name brand version of the drug. If you are turning 65 in 2025, you may contact your State Health Insurance Assistance Program (SHIP) for unbiased Medicare counseling.

This Year is Different

In years past, if you were satisfied with your plan, you could often renew without a second thought. However, with 2025’s premium and coverage adjustments, overlooking open enrollment could cost you hundreds of dollars. The key is understanding how premiums, copays, co-insurance, and out-of-pocket maximums compare. You will also want to consider whether you’re comfortable with limited network options or need more flexibility in choosing providers.

Clear Insight Wealth Management is Here to Help

At Clear Insight Wealth Management, we’re dedicated to helping military and federal families make the best choices for a secure and fulfilling life. This includes helping our clients make the most out of their earned benefits. Our mission is to empower you to live your dream life, and we’re here to turn financial challenges into success stories.

To schedule a “Get to Know You” meeting, call (509) 904-4956, email adrienne@myciwm.com, or schedule online.