What Federal Annuitants Need to Know About the FEHB Program and Medicare
We provide rating comparisons for self-only, self plus one, and families for annuitants. Comparisons include:
- Annuitants without Medicare.
- Annuitants with Medicare Parts A and B who pay regular premium rates, which include not only the FEHB premium, but also the Part B Medicare premium.
- Annuitants with Medicare Parts A and B who will pay higher "income-tested" rates, which include not only the FEHB premium, but also a higher Part B Medicare premium.
- Annuitants who have only Part A of Medicare, the hospital benefit. You can compare these to see how much you gain, or in most cases lose, by paying the Part B premium.
There are many comparisons, but only one cost comparison applies to your current situation. Of course, your situation may change if your family changes or if you change your Medicare decisions—and you can use our Guide to see those differences. For example, if you are trying to decide whether to enroll in Medicare Part B or not, you can compare plans with or without this option—but be careful to read our advice on this decision, since there are important advantages to Part B enrollment that for most retirees outweigh its premium costs.
Very importantly, our comparisons consider that a few plans provide both a Medicare “wraparound” and a fund that will pay part of the Medicare Part B premium. The three national plans that provide a complete wraparound for hospital and doctor costs also fund Part B costs are Aetna Direct, Blue Cross Basic, and GEHA High. Most Kaiser plans offer even greater premium rebates if you join their Medicare Advantage plans, as do most of the UnitedHealthcare around the country.
By using the Guide, you can find how you will come out under each plan if your expenses range from none to the maximum you could pay in a year. Very importantly for those with Medicare Part B, the “Published premium” column, as well as following columns, includes both FEHB and Part B premiums. These columns also credit you with the savings you gain from a Health Savings Account (HSA) or personal health care account or Health Reimbursement Arrangement (HRA) in plans that give you these benefits (annuitants get the HSA amount as an HRA contribution, as explained in "Types of FEHB Plans"). Personal care accounts and HRAs are the equivalent of a reduction in premium. If you don’t spend that account at the end of the year you will have a bank balance in that amount that carries over to the next year. Therefore, the "No costs" column includes your yearly premium adjusted, as pertinent, for the Medicare Part B Premium, HRA account, and any membership dues. These will be your only out-of-pocket costs if you have no medical bills. We rank the plans in order of average cost to emphasize the importance of each plan's treatment of "average" expenses for a family of a particular size and type.