Should Federal Retirees Take Medicare Part B?

[evilanne]

Should Federal Retirees Take Medicare Part B?
https://www.myfederalretirement.com/fed ... edicare-b/
How FEHB and Medicare Work Together in Retirement
https://www.myfederalretirement.com/how ... care-work/

It is still a way's off but I don't like the idea of it increasing my fixed medical expenses by $150=$210/month when I do turn 65. I recall someone in one of these forum saying that you don't have to enroll in Part B. I always thought it was automatic for most people but I'm thinking about not enrolling when the time comes.

I know...
--Part A doesn't cost anything if you have paid in for at least 10 years and it covers hospitalization so you should sign up for it when you turn 65.
--There is a penalty of 10% per year if you don't enroll in Part B when 1st eligible if you later chose to enroll
--The amount you pay for Part B is based on your income 2 years prior to turning 65
--Medicare premiums are higher if you make make above a certain amount ($88K Single $176K MFJ)
IRMAA = income-related monthly adjustment amount. Under threshold it is ~$1800 per person annually but can range from ~$2,500 to $6K depending on you modified AGI
--Part B is required for Tricare (So military can't opt out but they can suspend FEHB and come back later)
--Most FEHB work with Medicare and they encourage everyone to enroll. They basically cover the 20% Medicare does not cover. FEHB cover things that Medicare Part B does not like emergency care outside of the United States & acupuncture. Some plans offer rebates to those who sign up for Part B
--Both FEHB & Part B only cover cost considered to be medically necessary.
--FEHB is equivalent to Part A + Part B + Part D (Prescriptions)
--All FEHB plans have annual maximum out of pocket cost (between ~$5 -$7K for yourself)
--Some doctors do not accept any Medicare Patients due to low reimbursement rates and government rules/bureaucracy. Others may have limited availability for Medicare patients.

After looking at all this, it doesn't make sense to sign up for Part B unless your typical annual out of pocket expenses for the services covered are more than the Part B Premium. If you are relatively healthy, and you do end up having medical issues down the road, there is some risk that you may end up paying more in some years under FEHB than you would with Part B but you limited to Maximum Out of Pocket expenses in FEHB but that should be offset by the savings in years of. good health. I don't think I have ever reached the Max, even in one year that I had some major medical issues. I'm thinking about opting out but I have quite a bit of time to think about it.

Has anyone here over 65 (not still working) decided not to get Part B?
Do you know of any retirees with FEHB that have opted out of Part B when eligible?

Reference for FEHB & Medicare Part A & Part B
https://www.opm.gov/healthcare-insuranc ... -final.pdf
https://medicare.com/original-medicare/ ... -a-part-b/
https://eligibility.com/medicare/medica ... -vs-part-b
https://www.medicare.gov/Pubs/pdf/11579 ... -Costs.pdf

[Tomanyiron]

Do you know of any retirees with FEHB that have opted out of Part B when eligible?

Yes, that would be me, (and wife). Retired for 11 years, 73 years old, very few health issues, work every day.
It was automatic and there was some corresponding that I had to do to opt-out. Another problem came when we had our first outpatient medical expenses. It took a while convincing BCBS, that we did not have part B. It is so rare to opt-out that there system did not want to accept it.

I may regret it later, but so far, I have saved a chunk of change to lose in the stock market.

[Snapdragon]

This is good stuff. Hopefully more people chime in

[evilanne]

Thank you Tomany...it is good to know that it is possible & not a totally crazy idea to opt out. if it.is crazy, at least I'm in good company

[md2018]

My wife just hit 65 and she opted out of part B. She is relatively healthy. Hates going to the doctor. She had a broken knee a few years ago and GEHA covered most, but we had to pay about $1500 out of pocket to all of the various doctors and copays, and deductibles. Her first experience with Medicare was to get a flu shot. CVS wouldn’t give it to her since GEHA had automatically signed her up for part B. So I had to call GEHA and convince them she had not signed up for part B. So far she hasn’t gone back to get the flu shot…TBC.
I had an outpatient surgery a year ago which cost around $1000 for my share with GEHA. Other than that I spend a few hundred dollars every year on co-pays and deductibles and prescriptions. Lab work is free anyway with GEHA at their lab.
So I’m thinking of opting out of part b as well. GEHA says if I take part B they wave the co-pays and deductibles. Just not sure the payoff is worth it.

[evilanne]

md2018,
I know GEHA has a HDHP, if that is what you have, contributions to the HSA become an issue with Medicare Parts A or B.

Anyone with an HDHP should see https://money.com/social-security-unple ... igning-up/

It probably does not make sense for someone with a HDHP to sign up for Part A while they are still working.

I'm not sure if there is any benefit to having HDHP in retirement or if there is any option to contribute to your HSA after leaving government service. Not sure how the employer automatic contribution is handled if you have to stop making contributions to HSAs 6 months prior to getting SS.

[md2018]

md2018,
I know GEHA has a HDHP, if that is what you have, contributions to the HSA become an issue with Medicare Parts A or B.

Anyone with an HDHP should see https://money.com/social-security-unple ... igning-up/

It probably does not make sense for someone with a HDHP to sign up for Part A while they are still working.

I'm not sure if there is any benefit to having HDHP in retirement or if there is any option to contribute to your HSA after leaving government service. Not sure how the employer automatic contribution is handled if you have to stop making contributions to HSAs 6 months prior to getting SS.

Standard Option +1 and I am retired but not 65.

[guitarman]

Medicare Part A is free for most people. For Part B, you pay a premium. Blue Cross Basic 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.

[Bonanza176]

I am bumping this thread because I am getting close to signing up to medicare. I'm already retired and just want to hear what others think about this and if you have actually not signed up for B. What are the cost differences of paying medicare b premiums vs BCBS basic premiums?

[bop]

My wife and I signed up for Part A and Part B and elected to keep my FEHB BCBS policy in retirement. I could probably save a few bucks most years if I wanted to drop one or the other, or pick another plan, but one bad health event could eat up several years of those cost savings.

My wife has enough health issues this past year to easily justify our BCBS and Medicare Part B premiums. While I have fewer routine medical expenses, I am beginning to realize those expenses will only increase with age.

Bottom line: I like the peace of mind that comes with coverage at a relatively predictable cost that lets me go to any doctor I choose and pays for everything (except for prescription co-pays.)

Good luck to you, no matter what you choose.

[Scarfinger]

This seems like a good article on health care cost in retirement: https://fedretire.net/geha-standard-to- ... ison-2021/

Seems expensive once you add all the numbers up:

Medicare Part B Premiums add to your monthly healthcare costs which for 2020 was as low as $144.60 to as high as $491.60 due to Medicare’s Part B income adjusted premiums. To qualify for the lowest Part B premium those filing an individual tax return must have a Modified Adjusted Gross Income (MAGI) of $87,000 or less and married couples $174,000 or less. Gross Income (GI) is calculated before MAGI. Gross Income (GI) is total income earned through wages, dividends, interests, royalty and rental, business income, capital gains, and others. MAGI is calculated by adding back certain deductions such as tax-free municipal bond and student loan interest, tuition, rental loss and IRA contributions to name a few.

Total monthly health care premiums for those on Medicare and enrolled in the Self Plus One plans featured in this article are listed below:

BCBS Basic ($409.87) GEHA Standard ($291.22)
FEDVIP – Vision & Dental Coverage (Varies depending on plan)
Medicare Part B ($144.60 per person for those without an income adjustment)
FLTCIP – Long Term Care (Varies considerably depending on plan)
For a Self Plus One enrollment the total cost for coverage would be $409.87 for BCBS, $144.60 times 2 or $289.20 for Medicare, plus the cost of your FEDVIP and FLTCIP. I pay $50 a month for FEDVIP plus $194.80 for FLTCIP for my wife and I. Here is what you would pay monthly using my cost for FEDVIP and FLTCIP assuming both signed up for Medicare B and the couple is earning less than $174,000 a year:

BCBS – ($409.87 + $289 + $50 + $194 = $942.87 monthly, $11,314 / year)
GEHA – ($291.22 + $289 + $50 + $194 = $824.22 monthly, $9,890.64 / year)

If BCBS Basic members apply for and each receive a $800 Medicare Reimbursement for a Self Plus One enrollment, their adjusted monthly costs would be reduced to $809 in the above example.

[md2018]

I guess it might make you feel better to have all that insurance. But with part B you would pay out about $3500 in Premiums for 2 and over 10 years it would be $35,000. Everyone’s health is different, you have to weigh the cost/benefit. I have GEHA BASIC+1 and have had a couple of outpatient surgeries in my 50’s and my out of pocket with deductible was about $1500 for hospital, doctors, etc. I really doubt paying for 2 insurance plans really pays off but if have long term illness you might break even. You also have to consider if you can cover those off years with you TSP savings. Probably makes a difference if you are retiring with $100,000 in TSP or $1 million.

[Bonanza176]

So the consensus appears to lean towards signing up for Part B even though it looks duplicative compared to just having BCBS.

BCBS offers a partial Part B premium reimbursement program. It also appears that not signing up for Medicare, you would be penalized for each year you didn't sign up.

I still haven't seen on this thread a primary clear advantage not to sign up for Part B.

[evilanne]

Although most federal employees automatically sign up, I wouldn't say there is a consensus from a financial perspective. It really boils down to your health, income (Part B rate you will pay base on your retirement income-calculated 2 years prior) & risk tolerance. I switched over to an insurance that covered more alternative therapy (chiropractic, acupuncture etc) before I retired. Last year I did things to improve my general health and I have some doctors that don't take any insurance or provide other services not covered. I am willing to pay more for someone I trust even if it costs me more or is not covered. BCBS Basic only allows you to use in network providers and Medicare may limit your selection of providers further.

I don't know what the future of medicine holds with what is currently happening but I have quite a few years before I need to make this decision. I'm leaning towards not getting it and it is good to hear that you can opt out of getting Part B. You still have the annual maximum out of pocket costs with FEHB that limits your liability. SincePart B is duplicative, it seems like the lowest cost plan (premiums minus any rebates) would be best option with Part B, see Scarfinger's post & https://fedretire.net/geha-standard-to- ... ison-2022/ for GEHA & BCBS comparisons. It really depends on what covered medical services you need and the specifics of each plan for your situation.

[jimcasada]

If you're on Tricare, you have no choice, but to sign up for both A & B.