SLEDGE: I have multiple insurance plans; how should I proceed?

Q: I read your article about Medicare and secondary insurance. Both my wife and I are covered by Medicare and her free state retirement health insurance plan. I also have a Blue Cross and Blue Shield federal health plan ($86 per month) which I carried into retirement. I am thinking about dropping the BC/BS plan. I am only keeping it because if my wife dies and I am still living, I would lose her insurance coverage. My wife is 69 and I am 66. What do you suggest. — Shirley I.
A: I sent your question on to Kathy Bass, the senior account manager for the Anthem Blue Cross Blue Shield federal employee program in Richmond, for a response. She feels that since she works exclusively with federal contracts, her counterpart for your wife’s state plan would be better able to advise you. But after rereading your question, I’m not sure that your question involves a comparison between the state and federal plans, or even touches on how they interact with one another. In fact, it really isn’t so much about health insurance at all as it is about life expectancy. From the facts we have, if you knew for sure that you were going to outlive your wife, you would definitely keep your BC/BS plan, since not to do so would leave you with only Medicare: you said that if she dies first, your coverage under her plan ends; and Kathy said that if you terminate your federal BC/BS coverage, you can never get it back.
In my speeches about Social Security, I often advise men who are considering starting their Social Security retirement benefits before their full retirement age to be aware that the reduction in benefits that follows from early entitlement will apply to their wives’ widows benefits should the husband die first. And I’ve always felt that I needed to underscore this point because in our culture, men are usually a little older than their wives, and usually die two or three years earlier. I can tell you from long experience in my earlier job with Social Security Administration that we take a great many more claims from widows than we do from widowers.
So I suppose we could say that, statistically, most men in your position could cancel their BC/BS with relative confidence, since the odds are that they would not outlive their wives and therefore needn’t worry about the consequences that would follow if they did. But you’re a different matter. Being three years younger than your wife, and both of you over 65, means that you have a fair chance of outliving her. (Men who have lived to 65 have an average life span of 83 years, women of 85 years.) And in that case, if you had dropped your BC/BS plan, you’d have neither that nor coverage under her plan, and would be left with only Medicare. Mind you, Medicare is good insurance; but it doesn’t cover everything.
So I’ll just go back to the basic advice that Kathy gave in my column: generally speaking, federal retirees should probably keep their federal coverage. As Kathy said, she’s yet to hear of anyone regretting the decision to do so.