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, at least $700 a year extra, and for some almost $6,000 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. Taking into account dollar costs only, there are five good sets of options.
- The first option is to enroll in a Medicare Advantage plan and suspend FEHB enrollment. This is the lowest-cost option for many. Many MA plans have benefits as good as many FEHB plans and charge nothing beyond the regular Part B premium. They do, however, usually have separate medical and drug limits on what you may have to spend out-of-pocket; limits that together are usually a few thousand dollars higher than those in FEHB plans.
- A second option is to enroll in one of the few low-premium plans that contributes a substantial amount toward your Medicare premium, such as Aetna Direct CDHP or Blue Cross Basic. In both CDHP and HDHP plans 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. Several HDHP plans give you an equivalent value through their Health Reimbursement Account. We rate MHBP HDHP and CareFirst HDHP as particularly good buys.
- A third option is to enroll simultaneously in a UnitedHealthcare or Kaiser FEHB plan and these carriers’ “Senior Advantage” or “Retiree Advantage” option that pays most or all of the Part B premium while dramatically lowering or even eliminating your cost-sharing for medical expenses, while providing low-cost prescription drug benefits as well.
- As a fourth choice, you can enroll in a relatively low-premium plan like Aetna Direct, Blue Cross FEP Blue Focus, Blue Cross Basic, CareFirst Blue Value Plus, GEHA Elevate Plus, or either CareFirst or MHBP HDHP, along with Part B, and get a rich Medicare wraparound benefit or simply the ability to use Medicare to go outside the plan’s network should you choose to do so.
- A final cost-saving choice is to bypass Medicare Part B enrollment, and simply enroll in a FEHB plan with good benefits and low premiums such as Aetna Direct, Blue Cross FEP Blue Focus, GEHA Elevate, Kaiser Basic, or most HDHP and CDHP plans and some other HMOs. This is the simplest option and second only to the new Kaiser and United Medicare Advantage plans with full premium rebates as the least expensive choice for most.
All of these options and the plans that save the most money within each option vary in details that you can only assess after studying the brochure of several plans. All of them can provide most annuitants 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. If your medical costs are close to zero in a number of plans, in or out of network, why pay a higher rather than lower premium? 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 actually a less expensive option. So, there is no simple “one 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.
We show the extra cost of enrolling in both an FEHB plan and Medicare Part B and show which plans are likely to cost you the least or save you the most by enrolling in Part B. We present the plans in national and local groups, and within each list the plans in order of the lowest cost for self only enrollment in both FEHB and Part B. Some plans cost very little extra for Part B, taking into account both premium and enhanced benefits. These are sometimes the plans that offer the best premium reimbursements, and sometimes not.