Posted on Friday, 25th November 2022 by

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Please forward this to all federal employees,
annuitants, and survivors

Each year we publish numerous articles about the current open season’s (FEHBs) available plans, and we send out an updated “Open Season Selection Guide.” We also publish various FEHB plan comparisons, point out coverage concerns, new plan features, and relay the concerns of our readers that had coverage or service problems.

 

Update

Before proceeding with Scott’s concerns, Doug contacted me last week about a calculation error in my last article concerning the BCBS Basic to GEHA Standard Plan Comparison. I used the 2022 BCBS Basic plan’s monthly rate of $424.87 for the total 2023 costs. The 2023 monthly rate is $472.12. Here is the correction:

Combined FEHB and Medicare Premiums

Both Self-Plus-One members enrolled in Medicare A and B have to pay a Medicare premium of at least $164.90 per month for a combined total of $329.80 as noted in the following calculations.

Your monthly health insurance cost would be as follows, assuming both are enrolled in Medicare Parts A & B and the couple is earning $194,000 or less a year:

  • BCBS Basic – $472.12 + $329.80 = $802.01 monthly, $9,624.12/year)
  • GEHA Standard – $320.39 + $329.80 = $650.19 monthly, $7,802.28/year)

Medicare Part B Reimbursement

BCBS Basic members apply for and each receive a $800 Medicare Reimbursement for a Self Plus One enrollment, the adjusted annual costs would be reduced to $8,024.12/year in the above example. That’s $1600 a year for a Self-Plus-One enrollment when both have Medicare A & B. The blog article has been updated.

Scott’s Concerns

Scott, one of our site visitors, recently thanked us for the information we provide. He asked why none of the websites, including the governments, provides definitive answers for those who need to synchronize their FEHB benefits with Medicare?

He further states, “to answer them you would have to download every plan BOOK (over 100 of them) and calculate the answers manually (assuming they actually give this information in their benefits book).” There is a solution to this as noted below.

Observation

Scott has a good point, there are many plans to choose from and the review process can be overwhelming. That is why I focus so much energy during open season writing articles on this subject; provide a clearing house for plan resources, costs, and tools to make an informed decision.

Federal employees and annuitants are fortunate to have abundant plans available from nationwide Fee-For-Service plans, HMOs, High Deductible Health Plans (HDHP), Consumer-Driven Health Plans (CDHP), to FEHB Medicare Advantage (MA) Plans to choose from.

Many in the private sector aren’t so lucky, they often have a handful of plans available; some companies limit theirs to high deductible plans.




Answers Can Be Subjective

I listed his first three questions, there were 6 total; three dealt with FEHB sponsored Medicare Advantage (MA) plans. A MA plan comparison article will be forthcoming.

  • Which FEHB plans provide the highest benefit when combined with Medicare A&B?

What the highest benefit is to one may not be to another. Each plan lists their benefits with limitations in Section 5 of the plan brochure. Once you identify a cost-effective plan, review the benefits side by side to other plans of interest to ensure they cover your unique needs. Section 9, Coordinating Benefits with Medicare, outlines what costs are waived for those enrolled in Medicare.

I wear hearing aids; my plan pays $2,500 every three years for replacements while others have minimal coverage or only authorize replacement every 5 years. I can use any provider that accepts Medicare while others only offer service within their provider network.

  • Which FEHB plans provide the lowest cost when combined with Medicare A&B?

This depends on several factors including a person’s income, and other out-of-pocket average medical costs. Even with Medicare Part B partial reimbursement, other FEHB plans can be less expensive. Many select a lower cost FEHB plan when they sign up for Medicare because most FEHB plans waive the coinsurance, copayments, and deductibles for those enrolled in Medicare A and B.

Medicare premiums are income adjusted from a low of $164.90 to as high as $560.50 monthly depending on your Modified Adjusted Gross Income (MAGI). You may have to pay significantly higher Part B premiums when you add your retirement income to any capital gains, interest income, withdraw funds from a retirement account, or take Required Minimum Distributions from your TSP and IRA Accounts.

Another consideration for higher earning participants enrolled in a MA Plan, you may have to pay Part D premiums.

  • Which FEHB plans allow you to use any provider that accepts Medicare reimbursement?

Providers offer plans that cover in and out-of-network coverage. I recently published an article titled, Blue Cross Blue Shield Basic (BCBS) to GEHA Standard Plan Comparison – 2023.” BCBS is the largest carrier and GEHA’s standard plan offers one of the lowest cost plans for those on Medicare.

The BCBS Basic plan only covers in-network providers; you are responsible for all costs if an out-of-network provided is used. BCBS does cover out-of-network providers if you enroll in their higher cost standard plan. GEHA covers any provider that accepts Medicare.

Both of the comparison tools listed in this article provide this information for any of the plans.

The Solution

The Consumers’ Checkbook 2022 Guide to Health Plans is what Scott and many others are looking for; it does all of the complex costing calculations and provides side-by-side evaluations with ratings for each plan.

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 determine 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.

  • Importantly, the Checkbook’s Guide reviews FEHB Medicare Advantage plan options which can be less expensive for many retirees.

Federal Retirement site visitors and newsletter subscribers can order the Consumers’ Checkbook Guide and save 20% by entering promo code FEDRETIRE at checkout. Online access is $13.95, the hard copy version is $16.95, or pay only $20.95 for both online and hard copy, less 20% with promo code.

You can also use OPM’s Plan Comparison Tool. It isn’t as comprehensive as the checkbook guide but it does compare up to three plans at a time.

Summary

There is much to consider each open season as things change in our lives and providers revise and update their coverage. It takes quality time to seek out what is best for you and yours.

Use the articles I published on this subject, review our online Open Season and recently updated Medicare information, and take advantage of the comparison tools that can help you nail down a plan that best suits your needs.

The comparison tools will help you narrow down your search. You will still need to review the plans of interest benefits section and drug formulary list to ensure the health provider you select covers what your family requires.

Here are six articles I’ve written about this year’s open season:

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, 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 advice and strategies contained herein may not be suitable for your situation and 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.

Last 5 posts by Dennis Damp

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