Did you know that neither Medicare nor the Federal Employees Health Benefits (FEHB) Program cover any long-term care services? That is, until now.
Although that’s still the case for the FEHB Program, the Center for Medicare and Medicaid Services (CMS) has made strides to change that in 2019, starting with the Medicare Advantage program.
Traditional long-term care (LTC) services have never been covered under original Medicare (Part A and Part B). However, beginning in 2019, Medicare Advantage insurance companies will now be allowed to offer some long-term care services as an added benefit for the first time.
Because having LTC coverage during your golden years is important to many baby boomers, this new opportunity that Medicare Advantage plans propose could be worth looking into. However, Medicare Advantage plans are not the only option for LTC coverage for FEHB eligible retirees.
People who are eligible for the FEHB Program are also eligible to apply for the Federal Long Term Care Insurance Program (FLTCIP). So which should they consider, a Medicare Advantage plan with LTC benefits or the FLTCIP?
According to the FLTCIP’s cost of care tool, LTC services could cost you thousands upon thousands of dollars each year. We searched results for the Dallas-Fort Worth, Texas area and quickly realized LTC coverage is a must.
The average annual cost for home health care with six-hour visits, five days a week came to $31,200! That’s more than most people’s annual Social Security income. The average annual cost for assisted living came in even higher at $53,748. Then we looked at nursing home care. A whopping $61,320 was calculated as the average annual cost for possibly one of the most common forms of LTC.
With these average costs in play, yes, federal employees should consider all their options when it comes to acquiring LTC coverage.
Consider Medicare Advantage plans
Medicare Advantage plans are similar to the types of plans the FEHB Program offers. They have pre-set copays, deductibles, and coinsurances and usually have networks too. When you enroll in a Medicare Advantage plan, the carrier takes over your Part A and Part B coverage. Because the carrier is now responsible for your inpatient and outpatient services, CMS requires them to cover at least the same amount of benefits and costs that original Medicare does.
However, Medicare Advantage plans usually offer extra benefits that original Medicare does not such as, dental, vision and hearing. Until recently, carriers were not allowed to add benefits to their Medicare Advantage plans that had the primary purpose of daily maintenance, such as long-term care services.
According to CMS, Medicare Advantage plans are now allowed to add supplemental benefits as long as “they are used to diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization.”
Put simply, Medicare Advantage plans are now allowed to add LTC services as a supplemental benefit. These benefits may include, but are not limited to, in-home custodial care, home modifications and adult day-care services.
Each insurance company gets to decide whether they will incorporate some of these supplemental home health benefits into their plans. Since these benefits are new, it may also take a year or two before we begin to see to what extent carriers offer these benefits.
The pros of Medicare Advantage plans
The fact that Medicare Advantage plans offer extra benefits that are not covered under original Medicare is one of the main reasons some people choose Medicare Advantage over other types of Medicare coverage.
However, another popular reason beneficiaries enroll in Medicare Advantage plans is because of their historically low monthly premiums. In fact, there are even plans with a zero-dollar monthly premium. According to CMS, 46 percent of Medicare Advantage enrollees will have a zero premium in 2019. These plans are paid by Medicare to manage your benefits, so they often offer very low premiums to make them attractive to consumers like you.
These reasons make Medicare Advantage plans something FEHB members should at least consider.
Consider the FLTCIP
The Federal Long-Term Care Insurance Program is LTC coverage that is offered to FEHB eligible people. The FLTCIP helps cover costs for enrollees who need help with activities of daily living (ADL).
You do not have to be enrolled in an FEHB plan, you just must be eligible for one. To be approved for the FLTCIP, you must answer some health questions, and certain conditions could prevent you from being approved.
This is one big difference between the FLTCIP and Medicare Advantage plans; Medicare Advantage plans only have one health question related to End-Stage Renal Failure, that fortunately most people can answer no to.
Another significant difference between this program and Medicare Advantage plans is the premiums. Like we mentioned earlier, Medicare Advantage plans are known for their low monthly premiums.
The FLTCIP bases its plan’s premium on the age of the enrollee when they apply. According to the FLTCIP’s premium calculator, a Plan A for a 65-year-old enrollee would be nearly $200/month. As you can see, this premium is significantly more than Medicare Advantage plans, but that doesn’t mean you shouldn’t look into it a bit more.
Consider, however, that the FLTCIP would offer far more comprehensive coverage than the Medicare Advantage plans in your area for LTC services, because the primary objective of Medicare Advantage is covering healthcare services. The potential new long-term care benefits are simply one of many benefits that Medicare Advantage plans can begin to incorporate.
Compare your plan options
People who are both eligible for Medicare and the FEHB Program have multiple options for health coverage. Below is a list of ways dual-eligible people could get health coverage that may include LTC benefits.
FEHB health plan + FLTCIP
Medicare Advantage plan
Original Medicare + FLTCIP
Out of the above options, the Medicare Advantage plan by itself would be the least expensive option. However, you should also take into consideration your FEHB plan’s coverage. If you can find a Medicare Advantage plan that is equal or better coverage than your FEHB plan, then you can consider if that’s a move you’d like to make.
Before you make your final decision, you should consider each plan’s coverage details, LTC benefits, drug coverage, premiums, your budget, and the plan’s networks. After you know these details, you will be ready to decide which coverage is right for you.
Danielle Roberts is co-founder at Boomer Benefits, where she and her team help baby boomers set up Medicare supplemental insurance to help cover the costs of healthcare in retirement.