If you’re a current or retired federal employee, you may have some questions about how healthcare works once you enter your retirement years. Until now, you’ve probably been enrolled in the Federal Employees Health Benefits Program or FEHB. Once you approach retirement age, it’s only natural for you to wonder about other options, such as Medicare coverage. We’ll help you figure out what’s your next step.
What is Medicare?
Medicare is a government-run health insurance program for seniors who are age 65 and older. Certain disabled people or patients with certain health conditions, such as end-stage renal disease, may also be eligible.
Medicare consists of four parts: Part A, Part B, Part C, and Part D. Let’s take a closer look at each one.
Medicare Part A
Part A is an insurance program designed for people who enter the hospital. It offers no-cost hospital coverage for most people 65 and older. People who work ten or more years in an employment covered by Medicare’s rules qualify for Part A at no cost to them. And if you were a federal employee on or after January 1, 1983, you will automatically qualify for Medicare Part A at no cost.
Many federal employees find Part A insurance beneficial because while copayments and coinsurance for hospital visits are usually waived with your FEHB plan, prescription copayments and coinsurance are not. Part A offers no prescription drug coverage. The other important thing to note is that when you reach coverage limits on most Medicare Part A plans, you have to pay the difference between the FEHB allowance for any provider and the amount billed. You also typically have to pay copayment amounts for inpatient hospital stays, dependent on which plan you decide to enroll in.
Medicare Part B
Medicare Part B is a type of medical insurance for people who have Medicare as their primary coverage. This type of insurance helps to pay for doctor visits, home health care, outpatient care, some types of medical equipment, and some preventative services. Some types of Medicare are issued, or run, by private insurance companies. Those companies must follow Medicare rules regarding reimbursement and coverage. Part B premiums are usually withheld from your monthly Social Security disbursement. It’s typically best for you to enroll in Part B the first time you’re eligible.
Otherwise premiums are typically higher, and penalties are charged. However, there are special rules that apply to government employees. You can delay enrolling in Part B without a penalty if you’re retirement age and still work as a federal government employee. If you’re retired and covered through another employer or covered under a working spouse exemption, you can also apply later for part B and not face any penalties. But, if you become self-employed or work for a company that doesn’t offer primary health insurance, you’ll face a penalty if you don’t enroll in Part B by age 65.
Medicare Part C
Part C plans are also called Medicare Advantage plans. When you’re eligible for Medicare, you have a choice in how you receive care. Those health plan choices fall under the umbrella of Medicare Advantage plans that Medicare’s beneficiaries have available to them. If you have FEHB coverage, you can suspend it to enroll in a Part C Medicare Advantage Plan. It would eliminate your FEHB premium. Medicare Advantage health plans are another option in getting Part A and Part B coverage. The plans are usually offered and managed by private Medicare-approved companies that have to follow Medicare rules.
Some Medicare Advantage plans also include prescription coverage, which is also known as Part D. These plans usually have in-network providers participating in the plan to guarantee the lowest cost available. You will usually have an out-of-pocket limit for covered services so that you never have to worry about exceeding a certain level of expenses for your healthcare. While you may be able to get a plan that covers out-of-network providers, it usually comes at a much higher cost.
Medicare Part D
Part D is Medicare’s prescription plan, and enrollees have to pay a premium for coverage. However, if you’re a Federal employee, you will usually not have to enroll in Part D because all FEHP plans have drug coverage that is on par or better to Medicare’s prescription coverage. But, depending on which medications you’re on, it’s best to acquaint yourself with the different coverages offered by various companies. Some companies may have a better plan based on your particular situation. But you can have both.
One of the main things to understand about Medicare and FEHB is that once you’re retired and you sign up for Medicare, Medicare is your primary insurance provider, and FEHB is your supplemental insurance coverage. So, Medicare pays for your healthcare-related costs first, then FEHB pays the difference. But, if you only have a Part A plan, your FEHB coverage remains your primary coverage for doctor visits, but Medicare A will be your primary for in-patient hospital visits. As for your spouse, if they’re under 65, FEHB remains their primary provider until they turn 65.
Should I Enroll in Medicare?
The choice is yours and you should also factor in your health situation and work or retirement situation. The Office of Personnel Management (OPM) encourages anyone who plans to apply for Medicare benefits to do so three months before they turn 65.
You can call the Social Security Information for more information at 1-800-772-1213 or enroll directly through a federal employee Medicare benefits provider like Blue Cross
The FEHB Program can coordinate benefits with Medicare if you have the right plan. You may still be covered by the FEHB Program if you don’t apply for Medicare. The OPM website has more information, but if you’re able to qualify for no-premium coverage under PART A, OPM usually will advise you to do so. There’s a good chance it will reduce out-of-pocket costs and FEHB costs.
Part B charges a premium no matter what, and the Social Security Administration has more information on benefit information and premium amounts. You’ll want to carefully review the information to decide if obtaining Part B coverage is best for you.