The most-asked question at most federal benefits and pre-retirement seminars is a variation of the “To B or not to B” dilemma. As in:
When I retire, should I take Medicare Part B (doctors and medical costs) coverage, or rely on my federal health plan?
Part A (hospitals) is free. But Part B costs just over $100 a month. More for some high-income people.
We’ve answered this question scores of times, but it keeps coming back. That’s because different people, in different financial and health situations, keep asking it. For belt-and-suspenders types, who want virtually total coverage, the answer is simple. Pay the money. Take Part B.
But if you are very healthy, happy with your current health plan and could use an extra $1,200 per year to spend, it is a closer call.
Last week we heard from Donna, a retired fed now working as a contractor:
My husband (Ted) and I are covered under the FEHBP Blue Cross-Blue Shield plan. He’s turning 65 this year. It is my understanding that he should take Medicare Part B , which will become his primary insurance and BC-BS his supplementary insurance. This will cost him an extra $100-plus per month. If he doesn’t have Part B, then BC-BS would be responsible for things Medicare would have paid for and he would have higher out-of-pocket expenses. Can you clear it up?
Short answer: No! I wouldn’t touch a question like that with an 11-foot pole. But I know somebody who is qualified and not afraid to tackle the 2B Or Not 2B Medicare question. David Snell, director of retirement services for NARFE. Here’s what he said:
Mike, as you and I have discussed, benefit coverage under Medicare Part B duplicates the benefit coverage under any plan in the FEHBP, with the exception of prescription drug coverage which Part B does not cover. We do not know if Ted is retired but if he is and he enrolls in Part B, Medicare as primary will cover a large portion of his medical bills with his FEHBP plan covering the rest if the services are covered services by BC/BS. Ted will be shelling out another $1,200 bucks a year for this duplicate coverage.
If Ted is currently using his coverage under Donna’s enrollment a lot, because he has ongoing medical conditions that require frequent trips to the doctor or hospital, signing up for Part B may save him more in out of pocket expenses than the additional monthly Part B premium is costing him. But if that is not the case, if Ted is only going to the doctor for a routine exam or test, paying the additional premium would not seem to be cost efficient. Donna’s FEHBP BC/BS benefits will continue to cover Ted as they have been even if he does not enroll in Part B.
Here is what the Blue Cross Blue Shield FEHBP brochure says: “When you are age 65 or over and do not have Medicare.Under the FEHB law, we must limit our payments for inpatient hospital care and physician care to those payments you would be entitled to if you had Medicare. Your physician and hospital must follow Medicare rules and cannot bill you for more than they could bill you if you had Medicare. You and the FEHB benefit from these payment limits.”
This doesn’t mean that BC/BS won’t pay benefits, it means they must use Medicare’s approved amounts instead of their own allowance to base their payments on. Generally, if Medicare doesn’t cover an item, neither does BC/BS, with the exception of prescription drugs.
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