Medicare and Health Care

The most common question we receive every Open Season from retirees and soon-to-be retirees is whether to take Part B and pay the extra premium. Given that there is a penalty if you delay Part B enrollment when you first become eligible to join, its important to make that decision before you retire.

About 70% of federal retirees enroll in Part B, which means paying two premiums and in essence two duplicative insurance programs. A portion of the retirees that join Part B might do so as a hedge against the elimination of FEHB retiree benefits. It's possible a future Congress might consider doing so as a cost cutting measure, however unlikely that may be. But there are other more relevant reasons to join Part B such as FEHB plan options that are less expensive to join with Part B then without Part B. Here's what you need to know if you're going to enroll in Part B to maximize your coverage and save the most money.

Plan Choice—Almost all national plans waive their hospital and medical deductibles, copays, and coinsurance for members enrolled in both Medicare Parts A and B. In effect, they wrap around Medicare. With Medicare Parts A and B and most national FEHB plans, you will have close to 100% coverage of almost all medical expenses, with the big exception of prescription drugs and a few other services like chiropractor or acupuncture visits. If you decide to enroll in Part B, make sure you find a plan that has wrap around benefits, which reduces cost-sharing for medical services and helps offset the expense of the second premium. The Guide will show you how the plans rank based on estimated yearly cost when you have just Part A or when you have Parts A and B. Soon-to-be retired employees can see the Medicare comparisons by choosing Retiree as your employment status and by selecting an age of 65 or older. In the Washington, D.C. area, a retired couple enrolled as self-plus-one with income below $182,000 would see a range of adding Part B as low as $0 and as high as $3,800, the entire amount of both Part B premiums. Make sure you understand how Part B will help reduce (or increase) your out-of-pocket medical expenses with your existing FEHB plan before you decide on your plan choice in retirement.
Part B Reimbursement—A few FEHB plans now offer partial Part B premium reimbursement, including two national plans: Blue Cross Basic and GEHA High. Of course, if you're enrolled in a CDHP/HDHP plan, you can also use the HRA plan contribution to help pay for your Part B premiums as well.
More Access to Providers—If you join Part B, you can use the Part B benefit to go outside the FEHB plans doctor network and pay only 20% of the Medicare allowed charge. For any BCBS members, this added out-of-network flexibility strengthens the case of considering Blue Cross Basic compared to Blue Cross Standard. One of the biggest differences between BCBS Standard and Basic is the out-of-network benefit available in the Standard plan. Without Part B, you receive no insurance benefit from going out-of-network if you're enrolled in BCBS Basic. With Part B, you can. Overall, we see far less expense for retirees in BCBS Basic compared to BCBS Standard, and with Basic there is an additional benefit of a partial Part B premium reimbursement.
Medicare Advantage Eligibility—By joining Part B, federal retirees gain access to Medicare Advantage (MA) plans offered by a few FEHB carriers. Aetna, UnitedHealthcare, Humana, and Kaiser offer special Medicare Advantage plans for federal retirees. Some of these MA plans waive all out-of-pocket medical expenses for approved medical services, except for prescription drugs.

Can you please cite a source for this information? -- "As a Federal annuitant, maintaining membership in FEHB provided insurance, there is no penalty for not taking Part B when first eligible." All of the articles for federal retirees that I have read on this topic mention the penalty. I will be applying for Social Security benefits not long from now and I want to make sure I have all the information I need, and this option would be fantastic. Thanks.

My Dad is on Medicare. I know you have to be working to defer Medicare Part B. Then once you retire, if you don't have much income, Medicare Part B is a great deal. If you have much income though, the Medicare premiums go crazy high. I told him it doesn't make sense to pay the high Medicare premiums and then pay for a FEHB plan also. Just paying for a better FEHB plan is a lot more economical even after considering all the copays and deductibles. He can also stay on Medicare Part A (which is the hospital insurance) for free and drop the rest of Medicare. You have to look at your income and see what the Medicare premiums will be. The people who write the advice articles assume that most government employees don't have much income in retirement, but a lot of retirees do when their retirement plan distributions start.

if I read it correctly current USPS retirees are not required to enroll in part B but are getting the special enrollment period. I believe the requirement starts in 2025. I would envsioin similar for non-USPS annuitants if there was a change.

https://apwu.org/postal-service-reform-act-2022

no, your plan covers what it covers. now, that may change over time but it's not based on being covered by medicare or not. you have the same coverage as a non-retiree unless the plan is geared specifically towards medicare enrollees like Aetna medicare or whatever it's called.

what he's trying to say is FEHB coverage may change in the future (well, duh) and it's nice to have a back-up. he does it very poorly.

Edited by user Wednesday, May 18, 2022 7:31:32 AM(UTC)  | Reason: Not specified

I do see what you are saying. I am back to confused, and this guy wants $395 for a 30-minute phone call. I still have 1.5 years left, and I need to keep in mind I see an out-of-network Chiropractor 80 times a year, and would like to continue his services in retirement

True, but who doesn't opt in for that free Part A? While I am thinking of switching to BCBS Basic from Standard, I would lose that Chiropractic coverage, and the right to visit any provider, whether in or out of network. I live in an area that is medically underserved and need to keep all options open.

If it only costs about $1200 extra a year to remain on the Standard plan, yet my cost to this non network provider is about $10,0000 (mostly paid by insurance), what would Checkbook or any of you do?

Edited by user Wednesday, May 18, 2022 12:57:10 PM(UTC)  | Reason: Not specified

Very true too, and I believe we had discussed this before as you take a drug in a different tier. All I know, and my Doctor even mentioned this, is I wind up paying a 30 day co-pay for a 90-day supply at the retail store. Plus I live near Death Valley, everything melts in the mail!

Hey guys! It really depends on your income, so it's a different answer for different people. Like I told my Dad, if your income is high, Medicare Part B and D is too expensive ... unless you're chronically ill! And Medicare Part A is free for most people! All the experts can do is scare you with some theory that the FEHB or Medicare rules might be changed later!

GSBS, so if you subscribe to Checkbook's open season Guide and pay the few dollars for on line access, you can input different scenarios, for example, fast forward 2 years and say you are age 66 assuming average (or low or high health expenses), having Part A only (or both A and B, your choice) with zip code for Death Valley, and up pops a nice list of fehb plans sorted by estimated out of pocket costs for you to review.

Then press the Medicare button to refocus the list to include whether the estimates reflect you would be paying more for Part B premiums than you would be saving from waived out of pocket copays for each of the plans listed. The column with those figures is labelled 'extra cost of Part B' or something like that, if memory serves.

Now remember, that number is based on Checkbook's expertise in health care statistics for someone in your age group who has one of the various fehb plans available to you in your zip code (with Part A and/or B as you have specified), but it is not a perfect forecast, so be sure to read their discussion explaining how they make their estimates. It is not perfect but I believe a very good way for selecting an fehb plan as well as gaining insight into what you can expect with fehb and Medicare (about as good a source as you can find on this subject).

I think those estimates assume you would be using in network providers for the fehb plans as well as Medicare providers, so you will still be left hoping your dr continues to accept Medicare assignment or that you can select a good plan that lets you go out of network if necessary.

Also, be sure you understand how the Medicare rate will apply to all your providers (in network and out) once you turn 65. It's discussed in your fehb brochure under the heading over age 65 without Medicare, or some such wording, and is really important to be clear on once you reach the age. Checkbook also has a good discussion of it.

Edited by user Thursday, May 19, 2022 9:57:41 AM(UTC)  | Reason: Not specified