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A 2024 Retiree’s Reflections, Thoughts, and Comments

Posted on Friday, 13th December 2024 by

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I close out each year with a few last-minute updates and observations. My next article won’t be published until early January. It’s time to celebrate the holidays and just sit back and relax.

At the age of 75, soon to be 76, I realize just how fortunate we are, and much of that is thanks to my federal service, from active duty through retirement. I received my draft notice in 1968, 5 months after graduating high school; life has flown by at warp speed these last 55 years.

My 2024 New Year’s resolution was to slow down and take life easy for a change. I’m not sure I achieved that goal; just too much to do and too little time to do it. Yet, I have hopes for this coming year, and changes are on the horizon.

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Open Season Follow-up

Yes, open season is over but not out for the upcoming year. Those who signed up for Medicare FEHB/PSHB sponsored Medicare Advantage (MA) or Medicare Prescription Drug Plans (MPDPs) can revert to their FEHB/PSHB plans anytime. You don’t have to experience a Life Event or wait for the next Open Season.

Many find the MA and MPDP options worthwhile and desirable, while others have problems with approvals and available providers in their areas. It’s all about what works for you and the state of your health.

The Sunsetting of the Civil Service Retirement System (CSRS) – The End Game

I entered the federal civil service in 1973 after being discharged from active duty. At that time, all federal employees were under the CSRS system; now, less than 32,000 remain! Anyone hired into federal civil service starting January 1, 1987, was automatically enrolled in the Federal Employees Retirement System (FERS).

Many FERS employees lament this change and don’t realize their system can be more beneficial overall. Concurrent with this change, the Thrift Savings Plan was established, and the government provided a 5% contribution match for FERS employees.

CSRS employees didn’t receive the match and are limited to contributing 5% of their basic pay annually, whereas FERS employees can contribute up to the statutory limit each year. This is why many tenured FERS employees retire as millionaires or close to it.

The amount that FERS employees can contribute changes annually. You may elect to contribute any dollar amount or percentage of basic pay if it doesn’t exceed the IRS limit of $23,500 for 2025.

The TSP is governed by Internal Revenue Code (IRC) § 401(a), which is similar to a 401(k) with some restrictions.

CSRS Verses FERS Annuity Determination

Under the CSRS system, the annuity is calculated at 1.5 percent of your “high-3” average pay times years of service up to 5 years, 1.75% of your “high-3” pay times years of service over 5 and up to 10, and 2 percent of your “high-3” pay times years of service over 10. Many assumed the CSRS annuity was a flat 2 percent of your high-three average pay; it isn’t.

The regular FERS retirement annuity is calculated at 1% of your high-3 average pay times years of creditable service. If you retire at age 62 or later with at least 20 years of service, a factor of 1.1% is applied.

If FER employees meet certain requirements and retire before age 62, they receive a Special Retirement Supplement; this is in addition to their regular annuity and is paid until they reach age 62. This supplement is similar to their Social Security benefit. CSRS annuitants aren’t eligible for this supplement. The supplement ends at 62, even if you wait to apply for Social Security benefits.

Trade-Offs

Under CSRS, employees didn’t pay into Social Security. They contributed close to the same amount towards their CSRS retirement. Therefore, many long-term CSRS annuitants aren’t eligible for Social Security, or their monthly check is small compared to the average Social Security check others receive.

To be eligible to collect Social Security, you have to work at least 10 years, 40 quarters, paying into the Social Security system. To avoid the Windfall Elimination Provision (WEP), you had to work 30 substantial earning years under Social Security to collect a full Social Security benefit.

CSRS employees with 30-plus years typically worked only a few years part-time in school and possibly some military service. Those individuals must either work part-time while employed with the government, start a small business like I did 40 years ago, or work in the private sector after retirement to accumulate 40 quarters to collect a Social Security check.

FERS annuitants receive a lower COLA if the CPI increase is more than 2 percent but no more than 3 percent; their Cost-of-Living Adjustment is limited to 2 percent. If the CPI increase is more than 3 percent, the adjustment is 1 percent less than the CPI increase.  This is often referred to as the diet COLA.

 

Federal employees and recent retirees with security clearances can
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Six One Way, Half A Dozen the Other

Both systems are generous, with the differences highlighted above. Federal employees are fortunate to have a cost-of-living adjusted annuity to rely on with our other savings and investments. I retired 20 years ago this month, and thanks to our COLAs, my annuity is now close to what I was earning annually in 2004. FERS annuitants would have to work considerably longer to achieve the same results.

Our annuities provide a cushion that few in the private sector have. Even though CSRS offers a more generous annuity, FERS employees collect full Social Security benefits that often make up the difference. They potentially have significant TSP savings to fall back on when needed, and their TSP contributions over the years were tax-deferred.

Any way you slice it, both systems have served us all well.

Wrap Up

Another year has passed, and I had hoped to slow down. Instead, I wrote more articles than any year prior and am looking forward to this winter’s break. I’m another year older and feel my age, not my shoe size!

This year’s Open Season attributed to most of my articles these past two months due to the many changes and general confusion around our health care options. From MPDPs to MA plans and everything in between, it’s still confusing, and many just want to throw their hands up and surrender or stay the course. I hope my articles shed light on this subject; my intent was to clarify the issues for everyone.

I revised and sent out our updated 2025 Federal Employees Leave and Schedule spreadsheet for those still working and planning their exit. Please forward this spreadsheet to others in your organization. It tracks all leave balances, and you can use it to annotate your work schedule. This spreadsheet allows current employees to set realistic target retirement dates and will help them increase their annuity through prudent leave management.

I wish all my newsletter subscribers and site visitors a joyous holiday and a happy, healthy, and prosperous NEW YEAR!  My best to you and yours always.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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2025 Open Season Round Up – What You Need to Know!

Posted on Friday, 29th November 2024 by

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More FEHB and PSHB plans are offering Medicare Prescription Drug Plans (MPDPs) this open season. I reviewed several plan brochures, and you must opt-out if you have Original Medicare and want to remain in your provider’s prescription drug plan. Blue Cross and Blue Shield started offering MPDPs last year.

Once enrolled in an MPDP, you must pay a Part D Income Required Monthly Adjustment Amount (IRMAA) if your income is above a specific limit.

The following is excerpted from the GEHA brochure. They are one of the providers incorporating this next year for those enrolled in Medicare Part A and B. It’s not an option; you will automatically be enrolled in their MPDP unless you request to opt-out.

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GEHA MPDP

According to GEHA, “The Plan will add coverage for a Medicare Prescription Drug plan (PDP) – Employer Group Waiver Plan (EGWP), sponsored by SilverScript, to eligible annuitants and family members enrolled in the High or Standard Option. This Medicare Part D plan is equivalent to, or better than, the GEHA FEHB prescription drug benefits.” They go on to say:

“Eligible members will be automatically enrolled in the GEHA SilverScript PDP effective January 1, 2025. Enrollees will have the ability to opt-out of this coverage by following instructions mailed to them. Declining coverage or “opting out” will allow the enrollee to revert back to their standard FEHB prescription drug benefits. For more specifics regarding this coverage, see Section 9, Medicare Prescription Drug Plan Employer Group Waiver Plan (PDP EGWP).”

Note: GEHA customer service advised me that opt-out instructions must be requested. I asked them to send me a copy on November 19th. To avoid automatic enrollment, you will have 21 days from receiving the letter to contact SilverScript at the toll-free number (833-250-3241) to decline Part D coverage.

What to Expect

If you pay a Part B IRMAA and don’t wish to pay an additional Part D IRMAA, request the opt-out letter from your provider. My wife’s and my prescriptions are reasonable under GEHA’s standard prescription drug plan; we intend to stay with GEHA’s standard plan in 2025 and will opt-out of their MPDP.

There are benefits to MPDP offerings, especially for those not subject to an IRMAA. They include:

  • No deductible
  • Catastrophic Protection Out-of-Pocket Maximum of $2,000 per person annually
  • The plan’s integrated medical and prescription drug overall out-of-pocket maximums apply. Check Section 9 of your provider’s brochure for limits.

Medicare Advantage (MA) Plans

While researching MA plans this year, I discovered several issues with the plans I reviewed. I was comparing GEHA’s standard plan to their new MA plan offering.

One of the benefits of the FEHB plans for those with Original Medicare A & B is that you aren’t limited to the plan’s provider list. You can use any provider or medical facility that accepts Medicare; your plan will cover the deductibles, copayments, and coinsurance.

With Medicare Advantage Part C plans, you must use their provider networks. Most of our doctors weren’t on the list. When I called United Healthcare, the company that manages GEHA’s MA plan, they said to provide a list of the doctors not on the list, and they would confirm if they were part of a Plan Provider Organization (PPO) that would accept payment.

Higher-income retirees will also be subject to Part B and D IRMAAs if they enroll in an MA plan. This is often a tie-breaker for many considering this option.

Another concern is what I mentioned in our Medicare Advantage Plan Primer. “Increasingly frustrated health systems are opting out of contracts with different Medicare Advantage insurers. Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers.”

Who Pays What & When

MA plan network providers bill United Healthcare. However, if a PPO doesn’t accept payment, United Healthcare can contact your doctor to explain how the plan works.

If a doctor or hospital refuses to bill UnitedHealthcare directly, they may ask that you pay the full allowable amount. In that case, you can pay the doctor and then submit your claim to UnitedHealthcare. You will be reimbursed for the cost of the claim less your copay.

The following disclaimer is posted on their website: “Out-of-network/non-contracted providers are under no obligation to treat UnitedHealthcare members, except in emergency situations. Please call our customer service number or see your Evidence of Coverage for more information, including the cost-sharing that applies to out-of-network services.”




 

GEHA Plan Comparisons

GEHA publishes a plan comparison chart outlining the benefits of the GEHA Standard and GEHA Standard Medicare Advantage plans. It also provides a side-by-side chart of how their new GEHA Standard EGWP Prescription Drug plan compares to the other two options. A similar comparison chart is available for their High Option.

There isn’t an additional cost to join an MA plan; however, higher-income enrollees may pay a Part D IRMMA that they wouldn’t be responsible for if they remain in the FEHB’s prescription drug plan.

Visit the GEHA site for additional details and explore their plans and the MA option.

Summary

Many plans include an MPDP, and if you don’t review your plan brochure this open season, you may be unaware of this and other new features that may affect you and yours.

Your FEHB / PSHB plan provider networks differ from the Medicare Advantage plans they offer. Confirm the doctors and facilities you currently use are on the MA provider list before signing up. Also, check each plan’s formulary list to confirm the drugs you use are available and at a cost you can afford.

Before signing up for an MA plan, review our Medicare Advantage Plan Primer – What You Need to Know guide. It will help you decide what is right for you.

One of the advantages of the MA and MPDP plans offered by our FEHB/PSHB providers is that you can opt-out at any time and return to your original FEHB/PSHB plan. Several subscribers reported that after requesting to return to their Original Medicare plan, it took many calls and months to effect the change. It wasn’t a smooth transition.

Even if you don’t intend to change plans, it’s advisable to request a print copy of your 2025 plan or go online to review Section 2 (Changes for 2025). You still have until December 9 to review your current plan and explore others of interest.

Open Season Article List

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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FEHB / PSHB Open Season Online – Access & What it Offers

Posted on Friday, 22nd November 2024 by

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The healthcare open season can be overwhelming. There are many choices to consider, and you must use Login.gov to sign in to OPM’s Open Season Online. Once you enter the site, retirees and survivors can change plans, print out a copy of your Open Season Health Care Guide, or request hard copies of plan brochures of interest.

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Signing up for FEHB and PSHB Open Season Online is worth the time and effort. Each year, I order print copies of the plan I’m currently enrolled in and copies of a few of the other plans I intend to explore this Open Season. Plus, it’s easy to change plans on the site.

Before logging into the site, have your annuity claim number handy. They ask for it when you first sign in. Open Season Online doesn’t save your personal information from year to year. The first time you access Open Season Online each year, you must enter your annuity claim number and the last 4 digits of your social security number to gain access to your account.

Login.Gov

Access to Open Season Online requires enrolling in Login.gov, the Government’s secure login tool. Once you register with Login.gov, you will use your Login.gov credentials to sign in to Open Season Online. Many federal government websites, including OPM Services Online use Login.gov to enhance security.

When you go to FEHB Open Season Online, there is a “Login.Gov Sign-in Button” (see below) halfway down the page you must click on to start the process. This same process is used for the Postal Service Health Benefits (PSHB) Open Season Online.

Clicking on the banner will take you to the initial Login.gov Sign-in page, as shown below. With your Login.gov account, you can securely connect to multiple government accounts online; keep your login credentials handy to access other sites.

You can use your existing Login.gov email and password or click “Create an Account” to set up a new account if this is your first time using this system.

Caution: If you receive an email message saying the email address is already associated with an account, this means you previously registered for a Login.gov account using that email address. Follow the instructions in the email to reset your password or register using a different email address.

Setting Up a New Account

After clicking “Create an account,” enter an email address, select a language, and then press “Submit.” You will be directed to go to the email you entered and check for an email from no-reply@login.gov with the subject line Confirm Your Email. If you don’t see it, check your spam folder.  Click the banner in this email titled “Confirm email address.”

Next, establish a password for your new account and select an authentication method. I use the text message option; you can choose what is best for you. They will ask for your phone if you select text message, and they will send you an initial one-time code that you will enter into the next screen. Then you will be asked to agree to use this information for FEHB Open Season Online. After clicking on Agree, you will be redirected to the site.

After registering, you must only use your new Login ID email and password to enter the site.




Site Options

The first thing I do is print out the “Open Season Health Benefits Guide.” Select the state you reside in, and you will receive a printout listing all health plans available in your State, including their enrollment codes, premiums you would have paid in 2024, and the new 2025 premiums for all plans. This document guides recipients on changing plans and lists a dozen FAQs about Open Season.

OPM stopped sending these out via regular mail several years ago; now, we only receive an email titled “Important Federal Benefits Open Season Information (RI 74-4).” I received mine on October 29. The email provides links to plan brochures, including the FEDVIP program.

After signing in to Open Season Online, you can select any of the following:

  • Make an enrollment change or reenroll
  • Review and update dependent Information
  • Review health plan brochures
  • Review information on canceling/suspending your enrollment
  • Review information on paying your health benefit premiums directly to OPM
  • Perform an address change
  • Provide or update your email address
  • View frequently asked questions
  • Review an Open Season Health Benefits Guide
  • Review the Health Benefits Election Form
  • View transaction history
  • Go to OPM’s Comparison Tool
  • Log off

Open Season Article List

Summary

If you haven’t registered with login.gov it’s a good time to start. Most federal sites are adding this extra layer of security, including Social Security.

This site allows you to view updated dependent information, change plans, update your address, request hard copies of plan brochures or links to the online versions, and much more. Plus, it links to OPM’s FEHB Plan Comparison Tool.

The PSHB Open Season site should offer similar selections. I wasn’t able to login to their service because I didn’t retire from the Postal Service.

If you experience difficulties using Open Season Online, call the FEHB Open Season Express at their toll-free number, 1-800-332-9798, to complete your transaction. To make changes by phone for the PSHB, call the PSHB Helpline at 844-451-1261.

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

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IRMAAs and the Open Season Connection – Proceed with Caution

Posted on Friday, 15th November 2024 by

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If your income has or will increase due to Required Minimum Distributions (RMDs) or accrued interest, dividends, and capital gains from your cash and investments, review the Part B and D IRMAA premiums listed below.

Income Required Monthly Adjustment Amounts (IRMAAs) make Medicare Advantage Plans less attractive despite providing Part B subsidies.

The Centers for Medicare & Medicaid Services (CMS) released the 2024 premiums on November 8, 2024, for the Medicare Part A and Part B programs and the 2024 Medicare Part D income-related monthly adjustment amounts.

The 2025 Part B standard premium and deductible increase is mainly due to projected price changes and assumed utilization increases consistent with historical experience.

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Part B Premiums

Each year, the Medicare Part B premium, deductible, and coinsurance rates are determined according to provisions of the Social Security Act. The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. As noted below, you will pay more if your income exceeds certain levels.

The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.

The following charts show the Income Required Monthly Adjustment Amount (IRMAA) that will be deducted from your Social Security Check or billed quarterly for those not collecting Social Security. You will also be billed quarterly if your Social Security monthly benefit is insufficient to pay these premiums.

CAUTION: Your Medicare Part B and D premiums may vary year-to-year based on IRMAA and how they are calculated. When your income increases due to capital gains distributions, interest, and dividend income, you may end up in a higher bracket.




Part B & D IRMAAs

A beneficiary’s Part B and D monthly premium is based on their income. IRMAAs affect roughly 8 percent of people with Medicare Part B and D. These individuals will pay the income-related monthly adjustment amount and their Part B & D premiums.

 

Medicare Part B Income-Related Monthly Adjustment Amounts

There are separate Part B income-adjusted rates for:

  • high-income beneficiaries who only have immunosuppressive drug coverage
  • Premiums for high-income beneficiaries with full Part B coverage who are married and lived with their spouse at any time during the taxable year but file a separate return, and for
  • Premiums for high-income beneficiaries with immunosuppressive drug-only Part B coverage who are married and lived with their spouse at any time during the taxable year but file a separate return.

Medicare Part D

A beneficiary’s Part D monthly premium is also based on their income. Part D premiums vary by plan, and regardless of how a beneficiary pays their Part D premium, the Part D income-related monthly adjustment amounts are deducted from Social Security benefit checks or paid directly to Medicare.

Medicare Part D Income-Related Monthly Adjustment Amounts
There are separate Part D income-adjusted rates for Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year but file a separate return.

Federal employees who are retiring soon and recent retirees with security clearances
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Summary

Your 2023 earnings determine next year’s IRMAA. Medicare uses your Modified Adjusted Gross Income (MAGI) from two years back to determine where you fall in the above tables.  For 2025, they will use your 2023 MAGI as determined by your tax return for that year.

MAGI is your AGI with some deductions, such as interest earned on Municipal Bonds, savings bond interest, and other exempt income added back in.

When you add up all the premiums we pay for healthcare, they can be excessive, especially considering IRMAAs. It’s wise to explore lower-cost FEHB / PSHB healthcare plans to reduce costs as long as your services aren’t compromised. Explore all available options this open season.

Medicare Advantage Plans often offer lower costs and include Part B subsidies. Their comparable vision and dental care may allow federal employees and annuitants to drop their Federal Employee’s Dental and Vision Plan (FEDVIP) insurance.

Suppose you are considering a Medicare Advantage Plan with Part D or a Medicare Prescription Drug Plan (MPDP) option offered by your FEHB/PSHB providers. In both cases, you will be subject to IRMAAs on Parts B and D if your income exceeds the limits listed in the charts above.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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2025 FEHB & PSHB Healthcare Plan Selection Guide

Posted on Friday, 8th November 2024 by

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Please forward this article to others who can use this “Open Season” information.

Open season starts on the 11th of November, this coming Monday. Tools are available to evaluate provider options, select your 2025 plan, and submit changes to OPM. Use this guide to walk you through the process and follow the links for additional clarifications and guidance.

Many plans now offer Medicare Advantage Plans or Medicare Prescription Drug Plans (MPDP). Review our Medicare Advantage Plan Primer to better understand this option and learn about potential coverage concerns.

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Postal Service Health Benefits (PSHB) Automatic Enrollment

Postal employees and annuitants will receive a letter before the 2024 Open Season that provides information on the PSHB plan they’ll be automatically enrolled in. You can change that plan enrollment or select a different plan during the Transitional PSHB Open Season, which runs simultaneously with the 2024 Federal Benefits Open Season.

For example, if enrolled in the FEHB Blue Cross and Blue Shield (BCBS) Basic Self Plus One Plan (113), you will automatically be enrolled in the new PSHB 33C BCBS Self Plus One Plan.

Those currently enrolled in any FEHB plan not listed in the cross-reference chart will be automatically enrolled in the PSHB nationwide plan option. For the 2025 PSHB benefit year, this plan is the Blue Cross Blue Shield Service Benefit Plan FEP Blue Focus (35A/35B/35C).

Obtain Copies of Plan FEHB & PSHB Guides

   Active Employees

  • Request hard copies of desired plan brochures through your benefits coordinator. If you don’t know who that is, ask your supervisor.
  • Download plan brochures from the OPM website.
  • Request copies directly from plan providers. I typically request and receive brochures directly from GEHA and Blue Cross Blue Shield weeks before they are available on the OPM site.

   Annuitants (FEHB Retirees)

  • Sign up for FEHB Open Season Online – This site is devoted to federal annuitants. Request plan brochures to be mailed to your home address, or you can download brochures to your computer. You must register to use this site, and annuitants can change enrollments online.
  • Download plan brochures from the OPM website.
  • Request copies directly from plan providers.

  PSHB (Employees & Annuitants)

  • Follow the guidance in the Open Season letter OPM sends out.
  • Visit the PSHB Open Season
  • Request brochures from providers of interest.

Determine Plan Costs – 2025 FEHB & PSHB Plan Rates (All rates are posted online).




Comparing Plans

Use OPM’s Health Care Comparison Tool and Consumers’ Checkbook 2025 Guide to FEHB Health Plans to find the best plan for your needs.

Checkbook’s Guide helps active and retired federal employees find a FEHB plan that meets their needs at a cost they can afford. Answering a few questions provides a personalized cost estimate for each plan, including the premium plus expected out-of-pocket costs.

For retirees, this guide provides a yearly cost estimate for every plan with Medicare Part A only and a separate estimate with Medicare Parts A, and B. Users can see how each plan coordinates with Medicare, the cost reduction of adding Medicare Part B, and whether the plan offers Medicare Part B premium rebates. They also reviewed FEHB Medicare Advantage plan options, which can be less expensive for many retirees.

Pre-order Checkbook’s 2025 Guide to Healthcare Plans for Federal Employees and save 20% by entering promo code FEDRETIRE at checkout. Their Guide and OPM’s comparison tool will be available on the first day of the open season. Before you order, check here to see if your agency provides free access.

The Postal Service is providing Consumers’ Checkbook Comparison Tools at no cost for the new PSHB offerings:

  • Active USPS employees should go to usps.govto find the comparison tool.
  • Retired USPS employees can use KeepingPosted to find the comparison tool.

Use these excellent tools to drill down to and find the plan best suited for your situation. Review individual FEHB & PSHB brochures; they provide the plan’s official benefits statement.

Changing Enrollment 

Annuitants (Retirees)

  • FEHB annuitants can change plans online at FEHB Open Season Online. The online service is easy to use, and you can track your submissions for changes.
  • PSHB annuitants can change plans online at the PSHB Open Season Online site.
  • Call Open Season Express at 1-800-332-9798.
  • Send FEHB changes through regular mail (Postmarked no later than the final date of Open Season) to:

Office of Personnel Management
Open Season Processing Center
P.O. Box 5000
Lawrence, KS 66046-0500

When sending requests by mail, clearly state your Open Season request. If you are making an enrollment change, tell OPM the plan you want, the type of coverage (Self Only, Self Plus One, or Family), and the enrollment code. You must include your annuity claim number and social security number on your request. If you choose Self Plus One or Family coverage, OPM will need your dependent and other insurance information.

Federal Employees

Postal employees

Sign in to your online account at the Lite Blue USPS employee portal to manage your benefits.

Federal employees retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

Federal Employees Dental and Vision Insurance Program (FEDVIP)

Dental and vision benefits are available to eligible Federal and Postal employees, retirees, and their eligible family members on an enrollee-pay-all basis. Enrollment occurs during the annual Federal Benefits Open Season in November and December. New and newly eligible employees can enroll within 60 days after they become eligible.

Please register online at www.BENEFEDS.com to review and download plan brochures, use their plan comparison tool, and initiate a change or cancel enrollment. If you aren’t a registered user, sign up now. You can review your Dental, Vision, Long Term Care, and Flexible Spending accounts. Enrollees can initiate changes during the open season, when a life event changes, or cancel coverage at any time.

For enrollment/premium questions regarding dental and vision insurance, contact BENEFEDS at 1(877) 888-3337.

Medicare Impact on FEHB Plans

Review the following articles that describe the impact Medicare has on your FEHB provider payments.

Summary

With the costs of most things, from my perspective, rising considerably faster than inflation, it’s imperative to seek ways to save in this economy. Fortunately, there are lower-cost FEHB and PSHB options to consider that offer excellent coverage.

The task can be daunting for most because of the mountain of information that must be evaluated to make that decision. Thankfully, there are exceptional comparison tools to help us through the process.

This open season is different from previous years due to the establishment of the PSHB program for postal service workers and annuitants. This guide incorporated this new program with links to supporting articles that explain the plan.

Today, there are many choices to consider for everything today. Recently, during a trip to Walmart, I was looking for shampoo; many brands are vying for our attention, offering shampoo with or without conditioner, for thin, dry, or damaged hair, numerous scents – too many to mention, and with thickening or moisturizing effects. What do you choose?

These options drive me and my wife crazy, scrutinizing everything available! In my youth, my mother would buy Prell shampoo without all the fluff they offer today.

Even though we have many options for our healthcare needs, we must take the time this open season to select the best healthcare plan for our family, including prescription drug coverage.

Helpful Retirement Planning Tools

 

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

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Medicare Advantage Plan Primer – What You Need to Know

Posted on Saturday, 2nd November 2024 by

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I receive many questions about MA options; few know what to expect or who pays for what. Hopefully, this article will answer many of your questions and provide insight into coverage issues that may arise in certain areas. Follow the links to learn more about subjects of interest.

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This article attempts to cover both the Federal Employee’s Health Benefit (FEHB) and the new Postal Service Health Benefit (PSHB) plans, interspersed with discussions about non-Federal Employee Plan (FEP) providers.

The Centers for Medicare & Medicaid Services (CMS) announced that “average premiums, benefits, and plan choices for Medicare Advantage (MA) and the Medicare Part D prescription drug program will remain stable in 2025.”

Next year’s plans are reducing prescription drug costs and delivering additional benefits, including an annual $2,000 cap on out-of-pocket drug costs.

Getting Started

Medicare Advantage (MA) Plans, also known as Medicare Part C, can provide significant savings. They may include Part B subsidies that increase monthly Social Security checks, offer lower prescription costs, gym memberships, and dental and vision care.

To join an MA plan, you must be enrolled in Medicare Parts A and B and pay the monthly Part B premium. About 51% of Medicare beneficiaries are enrolled in MA plans nationwide.

Note: Part B subsidies are frequently offered by MA plans. A $100 monthly subsidy increases your Social Security check by that amount for both you and your spouse if enrolled in a Family or Self Plus One plan.

When Federal Employees Health Benefits (FEHB) plan members are enrolled in Original Medicare, and the plan offers Part B reimbursements, you and your spouse must submit receipts showing you paid Part B premiums.

The insurer will send you a check for the reimbursement amount upon receipt of the proper documentation. This should also extend to those enrolled in one of the Postal Service Health Benefit (PSHB) plans. Check with your provider for the proper forms and procedures.

Who Pays for What?

Medicare Advantage (Part C) plans are available from insurance companies and funded by monthly premiums, beneficiary copayments, and the Centers for Medicare & Medicaid Services (CMS). Last year CMS spent approximately $454 billion on Medicare Advantage plans, over half of Medicare’s total spending.

Medicare pays more than $1,000 monthly to insurers for each Medicare Advantage enrollment, plus any bonus payments earned. Bonuses are rated from 1 to 5 stars, 5 stars being the highest that evaluates a plan’s chronic condition management, patient care, and member satisfaction. Bonuses of 5% for rankings of 4 to 5 stars allow those plans to offer additional benefits, including higher Part B subsidies.

MA (Part C) and Original (Part A & B) Medicare Defined

Part C plans offer comparable coverage to original Medicare (Part A and B). Extra perks such as dental and vision care and partial to full Part B base premium subsidies for some plans are included. These plans become your primary healthcare provider, and many refer to them as all-in-one plans.

When federal employees transfer to an MA plan, they must keep their FEHB/PSHB plan active and pay the monthly FEP premium as before. No additional premium is required for the Medicare Advantage plan.

CMS reports, “The average monthly plan premium for all Medicare Advantage (MA) plans, which includes MA plans with prescription drug coverage, is expected to decrease by $1.23 from $18.23 a month in 2024 to $17.00 in 2025. Approximately 60% of Medicare Advantage enrollees in their current plan will have a zero-dollar premium in 2025.

Caution: If you join an MA plan not associated with a Federal Employee Plan (FEP), suspend and don’t cancel your FEP plan. This way, you can return to the FEP plan of your choice next open season if the new private sector MA plan doesn’t work out well for you. Once canceled, you aren’t allowed to return to the FEP program.




Original Medicare

If you elect to stay with Original Medicare (Parts A & B), Medicare is the primary healthcare provider. Our FEP plans provide secondary healthcare coverage.

Medicare pays first, and our secondary plan picks up much of what Medicare doesn’t pay. This is why many suggest changing to a lower-cost FEHB or PSHB plan when enrolled in Original Medicare. Especially when you can use any provider or medical facility that accepts Medicare, regardless of whether or not they are in your FEP provider network.

PSHB Change: Certain Medicare-eligible Postal Service annuitants and their Medicare-eligible family members must enroll in Medicare Part B to keep PSHB coverage.

The requirement to sign up for Medicare Part B is limited to postal employees who retire on or after January 1, 2025, and if you are under 64, Certain exceptions apply.

There is currently no Medicare Part B enrollment requirement for those with FEHB coverage. An FEHB retiree with only Medicare Part A hospital coverage would remain covered by their FEHB plan for physician and outpatient care within their provider network and subject to the plan’s deductibles, copayments, and coinsurance for those services.

MA Plan Features and Comparisons

Medicare Advantage provides an alternative to Original Medicare for your health and prescription drug coverage. These “bundled” plans include Part A, B, and usually Part D. They provide the same level of services with expanded benefits by reducing costs, improving operating efficiency, and reviewing the medical necessity of tests and procedures ordered by your physician.

In most cases, you must use doctors and facilities within the plan’s network, and pre-approval may be required before the plan will cover certain medical procedures.

If you earn over a set amount, your Part B and D premiums will be increased by the Income Required Monthly Adjusted Amount (IRMAA). In 2024 Part B premiums range from $174.70 per month to a high of $594! Part D IRMAA premiums range from $0 dollars below a certain limit to a high of $81 per month. These premiums are deducted from your Social Security check if you are enrolled, or they bill you quarterly.

Note: Enrollees in MA plans offered by the Federal Employee Programs (FEPs) have the ability to cancel and revert back to Original Medicare at any time; they don’t have to wait until the next open season as long as they continue paying their monthly premiums.

I confirmed this with GEHA and Aetna. The FEP MA plans are “rolling enrollments.” If you cancel before the first of the upcoming month, the change back to Original Medicare will take place, in most cases, by the first of the next month.

Clarification: This rollback may not apply to MA plans offered by the private sector. One of our subscribers suggested I mention that her sister had a difficult time canceling her Advantage Plan after signing up.

She was assured that nothing would change when moving to their Advantage program. However, her medications and co-pays changed dramatically. She helped her sister file the proper paperwork to return her to the coverage she had previously within the very limited time the company allowed to effect the change.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs

Original Medicare

Those who retain Original Medicare don’t generally require preapproval to see specialists or have tests and procedures completed. Our FEHB and PSHB plans pick up most copayments, coinsurance, and deductibles. You can also see any doctor or specialist that accepts Medicare.

Original Medicare members who retain their FEHB and PSHB prescription drug coverage aren’t enrolled in Part D and, therefore, not subject to a Part D (IRMAA). Many Federal Employee Programs (FEPs) now offer Medicare Prescription Drug Plan (MPDP) Part D options.

If you decide to stay with your FEP plan’s standard prescription drug plan, you must opt out of the MPDP option when first offered. If you accept the MPDP option, you won’t be charged a late Part D enrollment penalty; however, you must pay an IRMAA if your income warrants it.

According to several of our subscribers, the MPDP opt-out process is daunting and lacks clarity.

John, a blog visitor, suggested that FEP plans need to improve the opt-out form. The letter he sent his provider outlined his many issues with their current form and the general lack of detailed instructions and guidance. He had to make numerous calls to customer support to opt out of their MPDP plan.

Comparing 2024 and the Upcoming 2025 Plans

Explore each plan carefully to ensure they cover what you need at a cost you can afford. Use OPM’s Online Comparison Tool and Checkbook’s Guide to Healthcare Plans to identify the best plan for you and yours.

Pre-order Checkbook’s 2025 Guide to Healthcare Plans for Federal Employees and save 20% by entering promo code FEDRETIRE at checkout. Their Guide and OPM’s comparison tool will be available on the first day of the open season; before ordering, check here to see if your agency provides free access.

The Postal Service is providing Consumers’ Checkbook Comparison Tools at no cost this year for the new PSHB offerings:

  • Active USPS employees should go to Liteblue.usps.gov to use the comparison tool.
  • Retired USPS employees can find Checkbook’s Comparison Tool on their KeepingPosted website.

For retirees, Checkbook’s Guide provides a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate with Medicare Parts A and B.

This allows users to see how each plan coordinates with Medicare, the cost reduction of adding Medicare Part B, and whether the plan offers Medicare Part B premium rebates. They also review FEHB Medicare Advantage plan options which can be less expensive for many retirees.

Things to Consider

One of the major differences between Original Medicare and MA Part C plans is who manages them; MA plans are operated by companies like Aetna and GEHA, while CMS manages Original Medicare plans.

MA plans offer generous incentives to entice individuals to move to their plans, including Part B incentives, low to zero additional cost over what you pay for Medicare Part B, some vision and dental care, and other benefits. Doing your due diligence before changing to any of the MA plans is highly recommended.

Once enrolled in an MA plan, your carrier will send you a new medical identification card. Don’t discard your red, white, and blue Medicare Card. You will need it if you decide to return to Original Medicare at a later date. Keep it in a safe place.

Statistics

Hospitals and practitioners are opting out of MA plans nationwide in certain areas. The Center for Medicare Advocacy reported that 19% of health systems discontinued accepting MA plans, and others are considering doing the same.

The Kiplinger Retirement Report states, “Increasingly frustrated health systems are opting out of contracts with different Medicare Advantage insurers.”  They go on to state, “Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers.”

Some MA plans deny care approval at more than twice the rate of others, causing health systems to cancel their MA contracts. These plans often negotiate lower reimbursement rates than CMS has for Original Medicare.

These plans also add additional administrative paperwork for providers, a perceived pressure to avoid costly treatments, and there may be an insufficient number of patients in the area to make it economically feasible for providers to participate.

There are potential shortcomings, especially for those with health issues that may require pre-approvals for tests and medical procedures.

Caution

Before moving to an MA Part C plan, review all of the literature provided and check with your providers and medical facilities to confirm they are in their network. Review each plan’s prescription drug tiers and confirm your most used drugs are included at a price you can afford.

Note: Don’t risk losing your right to return to your FEHB/PSHB coverage if you sign up for a private Medicare Supplement Plan or an MA plan not affiliated with the FEHB/PSHB program.

Yes, there is much to consider this open season. Section 9 of the FEHB/PSHB benefit guides includes comprehensive guidance on how your plan works with Medicare.

Please take your time to access each plan of interest to ensure they will be a good fit for you and yours.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

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Consider Lower Cost FEHB Plans When Signing up for Medicare

Posted on Friday, 25th October 2024 by

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It makes sense to look for a lower-cost Federal Employee Health Benefit (FEHB) plan, especially when signing up for Medicare. This is particularly true if you pay Part B premiums and possibly an Income Required Monthly Adjusted Amount (IRMAA).

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When you are eligible for Medicare, you have the option to change your health benefits enrollment to a less expensive plan. You may make this change 30 days before you are 65 or at any time thereafter.

Today there are more low-cost FEHB Medicare Advantage plans, often with some Part B reimbursements, or plans are including a Federal Employee Plan (FEP) Medicare Prescription Drug Program (MPDP). The MPDP is also subject to Part D IRMAA premiums, another aspect to weigh carefully when deciding what plan is best for you and yours.

Advantages

After traditional Medicare (Parts A & B) becomes your primary payer FEHB plans generally waive the deductible, coinsurance, and copayments and you can use any provider that accepts Medicare. In other words, using preferred providers of your FEHB plan will be irrelevant since plans like BCBS and GEHA waive the coinsurance regardless of whether or not the provider is in their network or not. It is still going to provide 100% coverage if Medicare pays first.

Your prescription drug coverage will remain with the FEHB plan enrolled in unless they offer a MPDP option.

Explore all plans to find lower prescription drug costs, Medicare B reimbursements, and possibly expanded or improved benefits above what you are currently receiving. You won’t know until you research what plans are offered in your area.

Making the Change

Bill Morelli, a retired Navy Engineer, cautions federal employees and annuitants to “be very careful during open season choosing any healthcare insurance company. Carefully look at not just premiums, but check the copays, deductibles, coinsurance, Medicare Part B reimbursements, pharmacy Prescription copays, what they will pay for and not pay for, and most importantly if your providers such as hospitals, doctors, and other medical facilities in your local town will accept your carrier.”

Bill also suggests, “Most people look at only the premium costs which in my opinion is a huge mistake.” I wholeheartedly agree, there is a lot more to consider over and above premiums.

Before changing plans evaluate your current costs, call other FEHB providers for clarifications after reviewing their brochures, and make the decision based on the facts and your family’s needs.  Section 9 of all plan brochures covers the effect it has on subscribers.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

Observations

Many retirees subscribe to Blue Cross and Blue Shield (BSBC) plans because they have preferred providers in most locations and their coverage is international. They offer a Standard and Basic Plan and have a Federal Employee Plan (FEP) (MPDP), a Part D component that often times provides lower prescription drug costs.

The lower cost Self + One Basic 2024 monthly premium is $517.03 and it acts more like an HMO and your out-of-pocket expenses are minimal. Their Standard Self + One premium is $729.82.

I and my wife switched from BCBS Basic to the GEHA Standard Option after signing up with Medicare. The lower cost Self + One Standard 2024 monthly premium is $326.79, and their High Option Self + One premium is $540.95. We haven’t paid any out-of-pocket expenses to date, even after several major surgeries, except for prescription drugs. A considerable savings over the past 10 years.

Many FEHB plans including GEHA now offer Medicare Advantage (MA) plans that may provide even lower costs. The issue I’ve had with them in the past is the need for referrals and only being able to use their preferred network providers. That may change this open season, you never know until the new 2025 pamphlets are available for review.

Medicare Advantage Plans

Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. Medicare pays these companies to cover your Medicare benefits. Most importantly, MA plans provide catastrophic expense protection, unlike traditional Medicare and some offer partial Part B reimbursements. They at first glance appear to provide extensive coverage at considerable savings.

In return for their additional benefits, most of these plans require referrals and you must use their preferred provider networks.

To convert to one of the MA plans offered within the FEHB program you must be enrolled in Medicare Part A and B and a FEHB Plan that offers a Medicare Advantage option. There is no additional fee for the MA option.

Keep your original Medicare card handy encase you switch back to Traditional Medicare at an upcoming open season or if you trigger a Qualifying Life Event that warrants a plan change. During open season you can move back to a FEHB plan or possibly elect to enroll in another more cost effective FEHB sponsored MA plan.




Comparing Plans Made Simple

Explore each plan carefully to ensure they cover what you need at a cost you can afford. Use OPM’s Online Comparison Tool and Checkbook’s Guide to Healthcare Plans offers a comprehensive online comparison tool and/or a paperback book version.

Pre-Order Checkbook’s 2025 Guide to Healthcare Plans for Federal Employees and save 20% by entering promo code FEDRETIRE at checkout. When you pre-order you will immediately have access to their current 2024 Checkbook Healthcare Guide, the new 2025 Guide and OPM’s comparison tool will be available the first day of open season.

For retirees, Checkbook’s Guide provides a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate with Medicare parts A and B. This allows users to see which plans coordinate best with Medicare, the cost reduction of adding Medicare Part B, and whether the FEHB plan offers Medicare Part B premium rebates. They also review FEHB Medicare Advantage plan options which can be less expensive for many retirees.

Caution

I mentioned this in one of the articles I wrote last year and it is worth repeating here. “Don’t confuse the new FEHB MA options with private sector Medicare Supplement and MA plans being sold on TV ads and through the mail. If you decide to enroll in a private sector MA plan, one outside of our FEHB program, you should suspend your FEHB plan. If you cancel your FEHB plan, you can’t return to the FEHB program.

With the FEHB MA offerings you MUST KEEP your FEHB plan; during the next open season, you can change to any of the FEHB plans available in your area if desired. If you sign up for a private sector Medicare Supplement plan you can’t suspend your FEHB plan, you can only cancel your coverage! Read the following article on this subject if you are considering a Medicare Supplement plan:

Summary

There are savings to be had within the traditional FEHB providers including expanded MA and the Medicare Prescription Drug Program (MPDP) offerings.

The new FEHB MA plans seem to offer a lot for the price with increased benefits and more. There are pitfalls you need to be aware of.  Here is a link to an article that included feedback from federal annuitants and employes enrolled in FEHB MA plans:

Tammy Flanagan, a former federal employee and federal benefits specialist, suggests that, “too many folks don’t pay attention to their options during open season and many people pay too much for their health insurance by staying with the same plan year after year.”  

Before making a major change proceed with caution and get the answers you need from the prospective plan brochures and customer service representatives.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

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2025 COLAs and the Medicare & You Handbook

Posted on Friday, 11th October 2024 by

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More than 71 million Americans will see a Cost-of-Living Adjustment (COLA) of 2.5% in their Social Security benefits and Supplemental Security Income (SSI) payments in 2025. Social Security retirement benefits will increase on average $49 per month starting in January.

Federal retiree annuities under the Civil Service Retirement System (CSRS) receive the full 2.5% increase while those under the Federal Employees Retirement System (FERS) receive 2.0%, often referred to as the diet COLA.

The 2025 COLA doesn’t account for the 13.5% rise in the Federal Employee’s Health Benefit (FEHB) premiums next year. The health care premium increases will impact next year’s COLA, not the current COLA determination.

Federal retiree annuities and Social Security benefits increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W).

View the table for all COLAs from 1999 to the present to see how it has changed over the years.

Medicare & You Handbook

Medicare’s 2025 guide is worth the time and effort to review and learn about your exceptional Medicare benefits. It provides sign up guidance, Medicare coverage, the various plan options and how to get help paying your health care drug costs, and finally your rights and protections.

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Every year Medicare sends out their “Medicare & You” pamphlet to anyone on Medicare or approaching age 65. However, many simply throw out the previous year’s edition and replace it with the new one. Actually, there is much to discover with each edition, especially as we age and require more services.

This booklet is tailored to your state or territory, in my case Pennsylvania. Coverage changes and enhancements are covered on page 2 with a Table of Contents on page 3 followed by an extensive Index of Topics on pages 4 through 8.

2025 Changes

Part D prescription drug plans cap yearly out-of-pocket costs at $2,000. Once this limit is reached, Medicare pays all drug copayments and coinsurance for the remainder of the year. Additionally, enrollees will be allowed to spread their drug costs across monthly payments throughout the year if needed.

Expanded mental health care including outpatient services from professional therapists, and more resources for caregivers will be available.  Caregivers are now eligible for additional training that includes how to give medications, personalized care and more as part of a tailored treatment plan.

Stating next year, telehealth visits must be in an office or medical facility located in a rural area for most telehealth services. There are exceptions for mental and behavioral health.

Postal Service employees, retirees and their families will be covered by the new PSHB program. Twenty percent of the current FEHB enrollees will transition to this new system this open season. Postal employees that retire on or after January 1, 2025, and are under 64, will be required to enroll in Medicare Part B when they become entitled to Medicare Part A (typically at age 65) to remain enrolled in a PSHB plan.

The Long & Short of It

This guide is a wealth of information, easy to read, and follow, something government isn’t exactly well known for. Prior to signing up for Medicare, most don’t know the difference between Original Medicare, Medicare Advantage (MA), and Medicare Supplement Insurance (Medigap).

It isn’t only for those just signing up for coverage, many change from Original Medicare to Medicare Advantage plans to reduce costs and/or improve coverage. Others, after making a change, end up moving back to Original Medicare if the coverage and cost savings they thought they were getting don’t materialize. It’s a two-way street fraught with anxiety if not prepared.

The “At a Glance” section starting on page 11 compares Original Medicare (Parts A & B) to Medicare Advantage (Part C) side-by-side. It’s to the point and highlights the significant differences between the two. If you’re considering moving to a MA plan this is definitely a must read. Medicare Supplement plans are covered in Section 5.

Section 11 compares non-FEHB health and drug plans in your area, it starts on page 119 and includes over 50 pages and this doesn’t include Medigap offerings in your state! They remind everyone at the beginning of this section that you can’t buy a Medigap policy while you’re in a MA plan.

Federal employees and annuitants desiring to stay in the FEHB or PSHB program must review the FEHB or PSHB plan brochures for available MA and MPDP plans associated with the carriers.


Twists and Turns

There are differences for those enrolled in one of the Federal Employee’s Health Benefits (FEHB) plans. For example, Section 6 in the guide covers Medicare drug coverage (Part D) and states “you’ll likely pay a late enrollment penalty for Part D coverage if you join a plan later.”

This penalty is waived for MA plans offered by your FEHB carrier; this also applies when you opt for a Medicare Prescription Drug Plan (MPDP) option. Furthermore, you will be required to pay a Part D premium if your income exceeds a certain amount as determined by the Income Required Monthly Adjusted Amount (IRMAA). Equally important, this also impacts Part B premiums; they too are income adjusted.

Look at drug plans that include your prescription drugs on their formulary (a list of prescription drugs covered by a drug plan). Then, compare costs.

Signing up for MA Plans

When you sign up for a FEHB MA plan you MUST stay enrolled in your FEHB plan. Most if not all of the FEHB MA plans have a zero premium, you are only responsible for the FEHB plan premium. These plans often offer a partial Part B premium reimbursement for you and your spouse.  Compare FEHB plans to their partnered MA options to better understand these differences.

If you select a non-FEHB MA plan you can suspend your FEHB coverage to retain the option to return during the next open season. If you don’t suspend your coverage when moving to a private sector MA option, you can’t go back.

Caution

Don’t risk losing your FEHB coverage. If you are considering a Medicare Supplement plan you can’t suspend your FEHB coverage, and you won’t be able to return to the FEHB program next open season. Medicare Supplement plans (Medigap) are only offered by private insurance companies.




Helpful Retirement Planning Tools

 

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

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