- Federal Employee's Retirement Planning Guide - https://fedretire.net -

The FEP Medicare Prescription Drug Program (MPDP)

Posted By Dennis Damp On In BENEFITS / INSURANCE,ESTATE PLANNING,FINANCE / TIP,LIFESTYLE / TRAVEL,RETIREMENT CONCERNS,SOCIAL SECURITY / MEDICARE,SURVIVOR INFORMATION | Comments Disabled
Share [1]

I received a number of 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.

Medicare Part D [2]

The BCBS website is fairly straight forward and addresses many of the concerns you may have about transferring to the new program. However, there are certain situations that you must be aware of 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 [3].  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:

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.




Traveling Overseas

Section 5f [7] 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) [8] 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 [8] 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) [9] 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 [8] 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 [7] and review the MPDP web pages [10] 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 [11] to see if your agency provides free access. The Guide is also available for purchase [12] and Federal Retirement readers can save 20% by entering promo code FEDRETIRE at checkout.

Helpful Retirement Planning Tools

[20]

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