Your Final Decision on Medicare Part B and the FEHB Program

Throughout our advice we have highlighted specific advantages and disadvantages of enrolling in Medicare Part B in addition to your FEHB enrollment. On the minus side there is one large factor—paying two costly sets of premiums instead of one. For those who pay the higher part B "income-tested" premiums, this is a very considerable cost, between about $2,2500 and $5,140 extra to join Part B, depending on exact income level. On the plus side there are several factors, including avoiding network restrictions, better coverage for a few services, and having the option to join Medicare Advantage plans and paying only one premium without losing FEHB eligibility.

By now, you should realize that you have many options, each with advantages and disadvantages. Considering dollar costs only, there are four good sets of options. One of these is to enroll in one of the better Medicare Advantage plans and suspend FEHB enrollment. A second option is to enroll in the Aetna Direct CDHP plan or the Blue Cross Basic plan. Your special account will pay towards the Part B premium (or in the Aetna Direct plan for drug or dental costs not otherwise covered), and you also get a Medicare wraparound. We note that several Kaiser plans around the nation (but not Kaiser DC) will pay almost the entire Part B premium. These plans provide only a partial wraparound, however. A third cost-saving choice is to enroll in an FEHB plan with rich benefits such as APWU, NALC, Kaiser, or many other HMOs, and drop Medicare Part B. As a fourth choice, you can enroll in a low-premium national plan like GEHA Standard option along with Medicare Part B and get a Medicare wraparound benefit or join a low-premium HMO and use Part B to fill holes and get services outside the plan's network. Two of these good options involve keeping Part B and FEHB coverage, but two let you pay only one premium. All of them vary in detail that you can only assess after studying the brochure of one or two plans. All of them can provide most retirees substantial annual savings.

What you should generally not do is stay in a high premium FEHB plan to get the Part B wraparound benefit when you can join a less costly FEHB plan with an equally good wraparound benefit. Of course, there are always cases where even the most expensive combination provides a benefit essential to you. And differences in prescription drug formularies or cost sharing can make a seemingly more expensive option a less expensive option. So, there is no simple "once size fits all" answer. What you should do, regardless, is at least be aware of the dollar costs or gains of whatever decision you reach.