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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.

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

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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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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.

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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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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.

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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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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.




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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 on Friday, 4th October 2024 by

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The Federal Reserve lowered its benchmark interest rate September 18th by .5 percent (50 basis points), the first rate cut in four years! This rate cut lowers the Fed’s benchmark short-term rate to 4.75% to 5% from a 23-year high of 5.25% to 5.5%. The cut slightly eased borrowing costs for consumers across the board.

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Even with this rate cut, fixed income continues to hold its attraction for retirees and those who want to earn a fair rate of return on their cash and savings. While the stock market does offer the potential for higher gains, it doesn’t come without risks for those approaching retirement and retirees alike.

Treasury Bill and Note Rates Still Attractive

The national average savings account yield is 0.61 percent APY, according to Bankrate’s survey of institutions as of September 16, 2024. Higher rates are available from many online banks if you look around or negotiate a better rate with your bank. The average savings account yield would earn you a measly $61 per $10,000 of savings for the entire year!

The 26-week Treasury Bills are currently earning 4.25 percent. You can select auto reinvestments for up to two years and they can be canceled at any time if the funds are needed. The rates change for each new issue. However, the shorter-term (4, 8, and 13-week) Treasury Bill yields have averaged just above 5 percent over the past year.

Although the Federal Reserve intends to further reduce rates over the next 18 months, Treasury Bills continue to earn attractive yields. Treasury interest payments aren’t subject to State taxes, another tax savings for all.

Treasury Bill Investment Rates

Treasury Notes are currently offering anywhere from 3.3 to 4.3%. With these notes there is also the potential for capital gains if interest rates continue to decline and you decide to sell them on the secondary market before maturity.

Treasury Note Interest Rates

Purchasing Treasury Bills, Notes, and Bonds

Visit TreasuryDirect.gov to register, explore the options, and start purchasing Treasury bills, notes, and bonds, TIPS, and savings bonds. You are buying direct from the government and eliminating the middle man; there aren’t any fees charged for purchases.

Most brokerage accounts offer clients access to Treasury auctions and will purchase them for your account; they can be sold on the secondary market if needed. Here is more information on the Treasury’s programs:

CDs and Savings Bonds

Many online banks, credit unions, and some regional banks are offering competitive rates for savings accounts and CDs from 3.5 percent and higher in many cases. With rates falling I’m looking for longer term CDs or 2, 3, 5, 7, or 10-year Treasury Notes to lock in higher rates.

I purchased 15-month CDs at two local credit unions last December for 5.75% and my primary credit union matched their offer!

CDs have no market risk if you stay under their insured FDIC limits. I moved some of the funds I was cycling through the Treasury to this attractive yielding investment. In hindsight, I could have moved more.

I-Savings Bond Rates 

I Bonds issued May 1, 2024, to October 31, 2024, are earning 4.28%. This includes a 1.3% fixed rate. Still a great rate for one of the safest investments available. You can’t cash them in for one year. Plus, if you redeem them within the first five years you lose three months’ interest.

If the I Bonds you purchased previously didn’t have a fixed rate, you will only earn the inflation rate when the new rates are announced for the next six months. I Bonds with a high fixed rate are a great buy, some of my early I Bonds have a 3% fixed rate.

If you purchase an I-Bond by no later than October 31, 2024, you’ll receive the 4.28% for six months from the date of purchase. The rate will change after that to the new inflation rate announced this coming October plus any fixed rate your previously purchased bonds may have.

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

Market Observations

The stock market continues to soar and 401K balances have risen dramatically for the most part. Election years are typically a positive indicator for the broader market. Nineteen of the past 23 presidential election years (83%) resulted in positive S&P 500 gains.

This election year one candidate has proposed taxing unrealized gains that could upend the market. Yet, there are so many variables to factor in with both candidates: tariff impacts, raising or lowering corporate taxes and capital gains, the border crisis, law and order issues, numerous overseas conflicts that are overflowing into America, and so much more.

The fact of the matter is that both candidate’s proposals must pass through Congress. Consequently, much of what is proposed will either be modified or go by the wayside as reality sets in. Who knows what will end up driving the market one way or the other after the election.

Neither candidate is addressing the excessive national debt or insisting that any new spending must be offset with cuts elsewhere. The current administration is borrowing a trillion dollars every 3 months! All of these excesses add further instability to our fragile free market system.



Summary

As a retiree, I still prefer to invest in the safety of Treasuries, CDs, and conservative stocks, mutual funds, and market leaders that have been around for many decades, pay dividends, and have sound fundamentals. Many retirees set aside a small portion of their investments for the more aggressive growth stocks, mutual funds and ETFs of the day.

Now that the Federal Reserve is starting to cut rates, it may be time to add longer term CDs and Treasury Notes to your fixed income investment portfolio. CD rates are dropping as the Fed continues to lower rates for the foreseeable future.

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If you can lock up your discretionary savings and investments for 12 months or longer, CDs are a viable option. They can be cashed in before maturity, however the penalties can be significant. Treasury Bill rates are moderating down a bit as noted on the first chart in this article.

Short term T-Bills continue to provide impressive yields considering many banks still low ball their savings rates for established accounts. These banks are betting on the reluctance of many to move funds from their savings and checking accounts elsewhere.

Correction

In my last article titled “2025 Health Care Premiums Announced, Hold on to Your Hat!” I misquoted the BCBS Self-Plus-One (113) plan premium increase incorrectly at 8.7%, it was actually a 12.95% increase. Here is  how the comparison should have been written:

Premiums for the Self-Plus-One BCBS basic (113) plan and Government Employee’s Health Association (GEHA) Standard (316) plan follow: BCBS’s monthly premium increased $76.94 to $593.97, a 12.95% increase, while GEHA’s premium increased $47.39 to $374.18, a 12.7% increase. The annual increases are $923.28 for BCBS Basic and $568.68 for GEHA Standard!

Chris, one of our subscribers brought this to my attention and the input was greatly appreciated. This was corrected on the blog posting. We simultaneously publish the articles we send out to our newsletter subscribers on our blog.

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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 on Friday, 27th September 2024 by

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Federal employees and annuitants enrolled in the Federal Employee Health Benefit’s (FEHB) program will pay 13.5% more, on average, for their health care premiums.

 

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Adding this huge increase to the 7.7% premium rise for 2024, and 2023’s 8.7% increase we are all paying substantially more for our health care insurance. OPM said the increase reflects changes in the market over the last year, and generally aligns with other programs in the commercial market. Over the past three years our average FEHB costs have increased 29.9%!

FEDVIP’s premium increases are quite modest in comparison. Average premiums for dental plans are increasing by 2.97%, and the overall average premium for vision plans will increase by 0.87 percent.

In March, Medicare Trustees forecasted monthly Part B premiums would increase to $185.00 in 2025 from $174.80 this year, a 5.6% increase. The finalized rates will be announced early October.

FEHB Blue Cross Blue Shield (BCBS) to GEHA Plan Cost Comparisons

Premiums for the Self-Plus-One BCBS basic (113) plan and Government Employee’s Health Association (GEHA) Standard (316) plan follow: BCBS’s monthly premium increased $76.94 to $593.97, a 12.95% increase, while GEHA’s premium increased $47.39 to $374.18, a 12.7% increase. The annual increases are $923.28 for BCBS Basic and $568.68 for GEHA Standard!

BCBS Standard Self-Plus-Family option (105) monthly premiums increased $116.93 to $920.07. GEHA’s High Self-Plus-Family option (312) monthly premium increased 151.80 $ to $815.36. The annual increases are $1,403.16 for BCBS Standard and $1,821.60 for GEHA High option! Both High option plans include a partial Part B reimbursement for those enrolled in Medicare.

Check all plan’s 2025 premiums to confirm what you will be paying next year.

Medicare Advantage Plans (Heads Up for the Upcoming Open Season)

Postal Service Health Benefits (PSHB) Plan Cost Comparisons

The monthly 2025 premiums for the Self-Plus-One BCBS basic (33C) plan will be $608.81 next year. Government Employee’s Health Association (GEHA) Standard (37F) plan will cost $346.41. Year-to-year comparisons aren’t available since 2025 is the first year of operation for the PSHB program.

The Standard BCBS Self-Plus-Family option (33E) monthly premium will be $943.43. GEHA’s High Self-Plus-Family option (37C) monthly premium will be $791.31.

Check all plan’s 2025 premiums to confirm what you will be paying next year.

OPM published a resource page for Postal employees, annuitants, and family members to help them transition to their new PSHB health coverage. These resources provide extensive program information and will be updated with additional guidance as Open Season approaches.


Increased Cost Factors

Carriers are providing more options for gender affirming care and services, maternal health, fertility, obesity management, mental health and substance use disorder treatment, and telehealth benefits. They also expect a continued focus on managing pharmacy costs.

These costs are added to the increased general operational costs that all companies are experiencing such as rising salaries, supplies, and contracted services. Another significant cost factor comes into play when OPM waives the neutrality cost clause to cover options listed in the previous paragraph.

Cost Neutrality

According to OPM’s cost neutrality clause, “When proposing an increase in benefits, Carriers must propose corresponding benefit reductions to offset any potential increase in premium, with limited exceptions directed by OPM.”

They provide an example in the clause, “If a Carrier were to propose decreasing a cost sharing in one benefit and this increase in benefits would have an additional cost impact, the Carrier would have to propose benefit decreases in other areas with an equal or greater reduction in cost than the benefit increase in the same plan option”

Carriers can reduce and offset higher costs elsewhere by increasing the catastrophic cap, change prescription drug formulary options, add or increase copays, deductibles or coinsurance; decrease the number of covered visits for therapy, chiropractors, and others. There are ways to creatively reduce costs without sacrificing the excellent health care benefits we receive under the FEHB program.

OPM may issue waivers to the cost neutrality requirement where needed for proposals of coverage enhancements outlined in their current and previous year’s program carrier letters.

Summary

With premiums rising at a feverish pace, this open season is a good time to explore lower cost FEHB plans to offset high costs elsewhere. This is especially true for those with Medicare as their primary provider because FEHB plans will cover your copayments, coinsurance, and deductibles as the secondary provider.

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.

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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 on Friday, 6th September 2024 by

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The 2025 Federal Employee’s Health Benefit (FEHB) Open Season will run from November 11 through December 9, 2024. Open Season starts every year on the Monday of the second full work week in November and ends on the Monday of the second full work week in December.

 

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A FEHB Program Carrier Letter was sent to all FEHB providers earlier this year that outlines the policy goals and initiatives for the 2025 FEHB Program. A follow-up letter provided technical guidance and instructions.

OPM expects Carriers to provide quality care options with a continued focus on managing pharmacy costs.

PSHB Launch

Effective January 1, 2025, OPM is launching the new Postal Service Health Benefit’s (PSHB) Program. It will provide health benefits coverage for Postal Service employees, annuitants, and their family members and cover roughly 20 percent of the total current FEHB population.

Under this plan, postal employees that retire on or after January 1, 2025, and you 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.

Download our FREE Excel 2025 Federal Employee’s Leave Record – Tracks Annual, Sick, Comp, and Credit Hours

FEP Medicare Prescription Drug Program (MPDP)

There are 17 FEHB plans currently offering a Medicare Prescription Drug Program (MPDP) for Federal Employee Program (FEP) members with Medicare. OPM continues to encourage FEHB plans to offer more Part D prescription drug coverage options.

The FEP Medicare Prescription Drug Program (MPDP) is a prescription drug program with a Medicare contract. When you move to the MPDP you will retain the same Federal Employee Plan (FEP) health benefits you always had. There are additional drugs available, often times at lower costs, with a cap on the maximum out-of-pocket expenses that your current plan does not have.

Those with household incomes over a certain limit will pay an Income Required Monthly Adjusted Amount (IRMAA) Part D premium of $12.90 to $81 a month in 2024 for their Part D coverage. If you file jointly, both will have this amount automatically deducted from their Social Security check each month. Review the 2025 Medicare Part B and D premiums when they are released later this year to determine what your additional payment would be.

Blue Cross and Blue Shield automatically enrolls participants eligible for Medicare in their FEP MPDP program. You have to send in a request to cancel it and retain your current FEHB prescription drug plan if you are satisfied with your coverage and subject to an IRMAA.

Premium Impact

The average increase for our FEHB plans in 2024 was 7.3% while Medicare premiums increased 6% after the previous year’s 3% degrease. The Medicare trustees project that the monthly premium for Medicare Part B will increase to $185 in 2025, up from $174.70 in 2024 and $164.90 in 2023. The 2025 Part B premium will be finalized in the fall.

Medicare’s Income Required Monthly Adjusted Amount (IRMAA) charge will be determined in the 4th quarter of 2024. The 2025 IRMAA determination is based on your 2023 Modified Adjusted Gross Income.

The high cost of health care coverage overall will potentially increase premiums across the board.

Evaluating Your Current FEHB Plan

It’s a good time to review your current plan’s coverage and ask yourself if they met your needs and expectations this year. Ask these questions:

  • Did I have coverage issues?
  • What additional coverage will I need next year?
  • Was I able to get the medications / prescriptions needed at a reasonable cost?
  • Did I have to pay high prescription copayments?
  • Where my deductibles, copayments and coinsurance excessive this year?
  • Are the labs, doctor’s offices, hospitals, and outpatient facilities available in my immediate area and covered by my current FEHB plan?
  • Did I have to travel out of my area to see a provider or have procedures performed?
  • Was customer service helpful and easily accessible?
  • Did I encounter unanticipated expenses that I thought were covered in my current plan.
  • Are you signing up for Medicare this or next year? if so, you may want to consider moving to a lower cost FEHB plan.
  • Explore Medicare signup options

Answering these and other questions will help you prepare for the upcoming open season. If you had problems this year, look for plans that will better suit your needs in 2024

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 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.

Conclusion

The vast majority of federal employees remain with the same FEHB plan year after year. There are many plans available during open season to choose from that could save costs and/or improve coverage. This is a good time to evaluate your current plan and determine what is best for you and yours next year.

Many factors contribute to higher health care costs including an aging population that uses more health care services overall. According to Health.gov, People age 65 years and older made-up 17 percent of the population in 2020. By 2040, that number is expected to grow to 22 percent.

The FEHB providers won’t publish the new 2024 premium rates until late September or early October. It seems inevitable that increases are coming our way.

Hopefully, premiums won’t increase as much as I and others anticipate, only time will tell.

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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, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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