Posted on Thursday, 2nd November 2023 by

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I received several emails from Blue Cross and Blue Shield (BCBS) plan members about this new offering. Federal employees and annuitants enrolled in Medicare and one of the BCBS plans will automatically be enrolled in the new MPDP plan unless they opt out.

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The BCBS website is fairly straightforward and addresses many of the concerns you may have about transferring to the new program. However, you must be aware of certain situations before making the move.

A second article will be published next week that provides more information on the 17 plans now offering the Part D prescription drug program. I’ll be working with Kevin Moss, the senior editor with Consumers’ Checkbook on the upcoming article.

Before proceeding, I’m preparing an article about the expanded FEHB Medicare Advantage plans that are now offered. If anyone has experienced problems with the MA plan they signed up for last year, please email with the issues you ran into. I would also like to hear from those who are satisfied with their FEHB MA plan and why. Your input will help me relay this information to all of our subscribers and blog readers. Send your input to ddamp@aol.com.  Thanks in advance.

Overview

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 as per their 2024 Plan Guide. 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.

Members with the MPDP option will have an annual pharmacy out-of-pocket maximum, a cap (or maximum) on the amount you’ll pay in copays and coinsurance. It’s a cap on the amount you’ll pay on prescription drugs for the year. Once you reach the maximum for the year, you pay nothing for your prescriptions for the rest of the year.

The cap for their FEP Blue Focus and Basic option is $3,500 per year while the Standard options is capped at $2,000.

Eligibility

Federal employee Plan (FEP) members, enrolled in Medicare Part A and/or Part B primary and are a resident of the U.S. or a U.S. territory are eligible for MPDP.

Prescriptions & Their Cost

You can order prescriptions and refills at one of their 65,000+ in-network retail pharmacies or through the FEP Mail Service Pharmacy (Basic and Standard Option only).

The MPDP has four drug tiers:

  • Tier 1: Generics
  • Tier 2: Preferred brand name
  • Tier 3: Non-preferred brand name
  • Tier 4: Specialty drugs

Explore the available drugs and their costs for each of their three major programs:

Specialty drugs are considered tier 4 drugs with MPDP. Depending on how the drug is dispensed, you can buy specialty drugs by going to a retail pharmacy or by mail.

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Traveling Overseas

Section 5f of the BCBS 2024 guide lists Important things you should keep in mind about the FEP Federal Prescription Drug Program (FEDP). You should read this section carefully. When you go to this section cursor down the pages until you come to the section titled, FEP MEDICARE PRESCRIPTION DRUG PROGRAM. The online guide doesn’t list page numbers.

If you travel overseas and opt-out of the MPDP option, according to the plan brochure, “Your pharmacy coverage works outside the U.S. Since there are no Preferred retail pharmacies overseas, you need to pay for your prescriptions out-of-pocket and then submit your receipts and a completed claim form to get reimbursed. Overseas prescription drug claims must be submitted within one year of the purchase date.”

The 8th bullet on this list states, “Members enrolled in the FEP Medicare Prescription Drug program have no coverage for drugs obtained and/or purchased overseas.”

If you travel overseas frequently or go for extended stays this would be something for you to consider and you may wish to opt-out of the program using the form BCBS provides.

Income Adjusted Part B and D Premiums

Higher income plan participants may have to pay an additional Part D Income Related Monthly Adjustment Amount (IRMMA) over and above your plan premium. I called customer service to ask about this issue and they stated, “there’s no separate premium for prescription drug coverage.” I was advised to contact Medicare.

Only 7 percent of all who pay Part B and D premiums are subject to an IRMMA. What most don’t realize is that your Required Minimum Distributions (RMDs), dividends, capital gains, and higher interest we are earning can increase your Modified Adjusted Gross Income (MAGI) sufficiently to where you too will have to pay this in any given year. Medicare premiums for 2024 are determined by what your MAGI was in 2022.

Those with household incomes over a certain limit will pay anywhere from an additional $12.90 to $81 a month 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 2024 Medicare Part B and D premiums to determine what your additional payment would be.

The extra amount you have to pay isn’t part of your plan premium. You don’t pay the extra amount to your plan. If Social Security notifies you about paying a higher amount for your Part D coverage, you’re required by law to pay the Part D-Income Related Monthly Adjustment Amount (Part D IRMAA).  You’ll lose your Part D coverage If you don’t pay the Part D IRMAA.

Summary




If you don’t travel overseas or aren’t subject to an IRMMA, the new MPDP Part D plan seems to make sense and will save you money. The nice thing about this plan is that you still have your full FEHB plan options and you aren’t moving to a Medicare Advantage Part C plan that may have certain limitations such as available medical facilities in your area or a limited provider network.

Medicare will still be your Primary provider for Parts A and B, and BCBS pays what Medicare doesn’t including most copayments, coinsurance, and deductibles. BCBS will also provide this expanded Part D prescription drug coverage, under a contract with Medicare, if you don’t opt-out of the MPDP program.

Another consideration is that the BCBS Basic plan offers a Medicare Part B reimbursement that will offset any potential Part D premiums you may be subject to as explained above. Basic Option members who have Medicare Part A and Part B can get up to $800 with a Medicare Reimbursement Account.

All you have to do is provide proof that you pay Medicare Part B premiums. Each eligible active or retired member on a contract with Medicare Part A and Part B, including covered spouses, can get their own $800 reimbursement.

Medicare Advantage (MA) plans that pay a Medicare premium subsidy work differently. Your Social Security check increases by the amount of the monthly subsidy. In other words, you pay less for your Part B premiums.

Explore the plan thoroughly to confirm it meets you and your family’s needs, check on the availability of the prescriptions you use. Review section 5f and 9 of their brochure and review the MPDP web pages before deciding.

If you decide to opt-out of the MPDP call BCBS at 888-338-7737 between 8 am and 5 pm Eastern time to process your opt-out form over the phone. You can also send in the form they sent you with the initial letter.

Acording to the letter that BCBS sent out, “If you enroll in the MPDP and decide later that you want to go back to the traditional FEP pharmacy benefit, you can mail them at the address on the letter you received or call 1-800-MEDICARE to disenroll.”

Checkbook’s 2024 Guide to Health Plans for Federal Employees will be available on the first day of Open Season, November 13th. Check here to see if your agency provides free access. The Guide is also available for purchase and Federal Retirement readers can save 20% by entering promo code FEDRETIRE at checkout.

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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.

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Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION | Comments (11)


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11 Responses to “The FEP Medicare Prescription Drug Program (MPDP)”

  1. Bob Richardson Says:
    November 3rd, 2023 at 11:10 pm

    Your article saud “The FEP Medicare Prescription Drug Program (MPDP) is a prescription drug program with a Medicare contract. Medicare pays BCBS to manage their member’s prescription drug program. They receive the Part D premiums that the government typically pays to provide this service.”

    I can only make sense of this issue if it says “BCBS pays Medicare to manage and provide their member’s prescription drug program. BCBS uses part of their member’s premiums to pay the Medicare Part D fee at the standard tier. Part D IRMAA fees are not included and must be paid in addition to your BCBS premiums if you optin.”

  2. Dennis Damp Says:
    November 4th, 2023 at 7:48 am

    I understand the confusion, approximately 73% of the $105.8 billion in Medicare D spending is derived from general revenue. An additional 15% is generated by beneficiary premiums, while another 11% in funding comes from payments from the state for dual eligible beneficiaries who qualify for both Medicare and Medicaid because of having a low income. The bottom line is that it is a Medicare Part D option with a Medicare contract. I somehow got off track and was thinking of the MA plans and how they are funded, not Part D when I wrote this. The second sentence should have been left out. Thanks for bringing this to my attention.

  3. Dennis Damp Says:
    November 4th, 2023 at 7:52 am

    I made the correction and removed the second sentence.Thanks again for your input. It was very helpful.

  4. Angelita Lozano Says:
    November 6th, 2023 at 10:01 am

    I am still totally confused. What will our cost be. I presently do not have Medicare Plan D. So if I do not opt out, what will my additional cost be.

  5. Dennis Damp Says:
    November 6th, 2023 at 11:36 am

    If you file an individual tax return and earn less than or equal to $103,000 or file a joint return and earn less than or equal to $206,000, all you pay it the plan premium. If you earn over the amounts specified, you would pay an additional $19 to as high as $81 dollars depending on your income. Here is a link to the income adjusted part D premiums: https://www.federalretirement.net/medicare.htm#Medicare_Part_D_2024_Coverage_

  6. Carol Donovan Says:
    November 6th, 2023 at 7:57 pm

    1. Do they have insurance brokers within the federal government that you can consult with?
    2. From my understanding Basic BC/BS does not have skilled Nursing Home coverage even with Medicare A. For this reason, I’m looking into other insurances.
    3. Still undecided whether to enroll in Medicare B.

  7. Dennis Damp Says:
    November 8th, 2023 at 12:00 pm

    Unlike the private sector’s numerous celebraties that promote and sell Medicare Advantage plans, you must review the FEHB’s plan borcures and use the comparison tools available to select the best plan for you and yours. Checkbook’s 2024 Guide to Health Plans for Federal Employees will be available on the first day of Open Season, November 13th. The Guide is also available for purchase and Federal Retirement readers can save 20% by entering promo code FEDRETIRE at checkout. OPM offers a free online comparison tool you can use as well. Electing Part B can save you considerably on deductibles, copays and coinsurance. Part B coverage is extensive and if you dealy applying you will pay a 10% pernaly for each year you delay. You need to know what to cosndier before signing up for Part B. Plus you may want to consider moving to a lower cost FEHB plan if you elect A and B.

  8. Dennis Damp Says:
    November 8th, 2023 at 12:08 pm

    All you will pay if you don’t opt out is the FEHB plan premium and any income adjusted amuount if you file an individual tax return and earn $103,000 or over a year, joint filler must earn $206,000 or more a year. Depending on your income you would pay an additional IRRMA of as little as $12.90 per month to a high of $81.00 for those earning $750,000 or more per year. Click here to review the Part B premiums and income threasholds.

  9. A John Gironda III Says:
    November 9th, 2023 at 9:15 am

    Are there any circumstances where staying with the existing FEP drug program would be better than accepting enrollment in the new MPDP?

  10. A John Gironda III Says:
    November 9th, 2023 at 9:18 am

    P.S. Thank you for your article on this subject.

  11. Dennis Damp Says:
    November 9th, 2023 at 11:58 am

    Yes, our article coming out next Saturday will highlight when it is better to stay with your FEHB plan prescription drug coverage. Basically, if you travel overseas the new MPDP will not cover prescriptions written in foreigh countries and if you are subject to an income adjusted Part B Medicre premium you will also pay an income adjusted Part D premium that you don’t have to pay with the FEHB PDP. More to come.