So under the proposals in the wapo article it seems like the annuity value of FERS is being reduced and the cost of participating is being increased. A new employee paying ten percent of their gross or so in gets a no-COLA no-supplement annuity that's a percentage of their consecutive-high-five. At that point is it a good price for an annuity given say 20 years averaging 3% raises? Or would that hypothetical employee be better of taking their accumulated contributions and investing at that point? (Sub-queries - do folks choosing return of contributions get a nominal interest rate or anything for such? Again when I was with state gov that's how the pension worked but I don't think it does for Federal service. Also of course if hanging on to a low value annuity gives you access to otherwise extraordinarily costly health insurance once you have your five in to vest you hang on for dear life... but if I understand correctly to retain access to the healthcare requires you to stay until your MRA, right? Does the strange only-at-exactly-55 exit path keep health care access? Do you have to stay in FERS for that?)
The way I'm reading it is that it won't just be new employees, but current employees as well. In the past, they have changed the rules for new hires, but the people who had been in a while stayed on the old plan. It looks like even current, long time feds will not get to keep their existing deal, which would be a pretty crappy thing to pull. But, yes. No COLA (ever, not just until age 62 like it is now), no supplement, based on high five.
As for the sub-query, I'm not awake enough to figure that out yet. You can buy an annuity or keep your money in TSP, or move it out, or a combination. In my case, it's best for me to keep it in TSP so that I can pass the leftover balance to my son when I die. If all goes well (based on firecalc and others), I should have a lot to pass down. The TSP and annuity option are different than the FERS pension.
You can only keep health care if you retire at your MRA, or get an official early out option (like VERA). MRA is based on the year you were born. The earliest is 55 then it goes up a month, kind of, for every year younger you are until you hit a point where the MRA is 57 (there is a chart that's easy to look up, just search FERS MRA chart). I think the "only at exactly 55" thing is "at least exactly 55" because you need to have your MRA to keep health care, and again, for younger people that is over age 55.
"Do you have to stay in FERS"... You have to retire as a FERS employee, at MRA or later, to get the health care. Leaving FERS, to my knowledge, is not really a thing--I mean, you leave it if you change jobs, and lose some benefits if you retire before MRA, defer retirement, etc. I don't believe you have to option to have someone else run the pension, or cash it out*, which is what I'm guessing "staying in FERS" means. You completely have the option to move your TSP money to something else and that would not affect your health benefits.
*you can cash out your contributions to FERS, but since it is only your 1% contribution (first version FERS employees), definitely not worth it. Even if it goes to 5%, I don't see how it would be worth it to cash it out. Unless maybe you're retiring so early that you don't have many years of service, would be penalized until there was nothing left, etc.