Reg Jones Expert's View

Among the many benefits of being enrolled in the Federal Employees Health Benefits program is the protection it offers when you or family run up expenses which threaten to go through the financial roof. That feature is called catastrophic protection, and it limits your out-of-pocket expenses. However, good as it is, it doesn’t always provide an absolute limit on what you may have to pay.


Because such a high percentage of federal employees and retirees are covered by the Blue Cross and Blue Shield Service benefit plan, I’ll use it as an example.

Here’s the good news: If the total amount of out-of- pocket expenses in a single calendar year for you and your covered family members for coinsurance and copayments exceed $7,000 under the Standard Option or $5,000 under the Basic Option, you won’t have to continue paying them for the remainder of the calendar year.

Here’s the potentially bad news: A number of expenses don’t count toward your catastrophic protection maximum. If you incur such expenses, you’ll have to continue to pay them even if you’ve already exceeded those dollar limits.

According to BCBS, here are the expenses that aren’t included:

* The difference between the plan allowance and the billed amount.

* Expenses for services, drugs, and supplies in excess of the plan’s maximum benefit limitation.

* The $500 penalty for failing to obtain precertification, and any other amounts you pay because the plan reduces benefits for not complying with its cost containment requirements.

* Under Standard Option:

– the calendar year deductible.

– the 35% coinsurance for inpatient care in a non-member hospital.

– the 35% coinsurance for outpatient care by a non-member facility.

– expenses for dental services in excess of the plan’s fee schedule payments.

* Under Basic Option:

– coinsurance you pay for non-preferred brand-name drugs.

– your expenses for care received from participating/non-participating professional providers or member/non-member facilities, except for coinsurance and copayments you pay in those special situations where the plan does pay for care provided by non-preferred providers.

While it’s clear that the catastrophic protection feature goes a long way toward protecting an enrollee under normal circumstances, there will be times when you could be hit with unexpected expenses, especially if you are an employee or retiree who is under age 65. For those above that age and covered by Medicare Parts A and B, some of these expenses may be moderated or even eliminated.

The word to you, the wise user of health benefits, is to carefully read your plan brochure so you aren’t blindsided.