Shave — maybe slash — your 2020 health premiums, consider plan B

Even though Federal Employees Health Benefits Program health premiums are likely to go up next year, Uncle Sam will continue to pay the lion’s share of the t...

Whether you are a glass-is-half-full or half-empty type, there is good news coming for older and retired federal and postal workers.

Even though your Federal Employees Health Benefits Program health premiums are likely to go up next year, some big time, Uncle Sam will continue to pay the lion’s share of your total premium — about 72% on average. And even if premiums go up big time you can drastically reduce those premiums by taking Medicare Part B and switching to a Medicare Advantage Plan.

But it is tricky because it involves suspending, not dropping your current FEHBP plan. You’ll have that option during the November-December open enrollment season.

Although thousands of eligible employees have discovered the option many others either don’t know about it, don’t understand it, or haven’t yet turned age 65 or retired. It is complicated but worth checking out, and telling a friend or coworkers. So we asked federal benefits expert John Elliott how it works::

“One of the more frequent questions I get from federal employees and retirees is whether to take Part B at age 65 or retirement. Here’s what I tell them: The hospitalization portion of Medicare, Part A, is free so it is good to apply for that at 65, which means you should have no out-of-pocket hospital expenses except for prescription drugs. You may apply for Part A and B three months before your 65th birthday, the month you are 65, and three months after you turn 65. You can apply online at

“Part B is not free. The current monthly premium will be $135.50 per person in 2019 for a couple making $170,000 per year or less, or $85,000 for a single person. Higher premiums are charged if you exceed those income levels. The decision to take Part B is highly individualized. As to whether to enroll in Part B, I’d look at your current state of health, your health risk factors e.g., do you smoke, your weight, lack of exercise, etc., and your family history. If one of these is in negative territory I would consider taking Part B. A combination of Part B and your FEHBP plan should eliminate out of pocket expenses for doctors fees, outpatient fees, lab costs, etc., and the taking of Part B allows many to choose a cheaper FEHBP plan.

“If all your health signs and lifestyle are positive, however, you may not need Part B, especially if your income puts you in the higher premium category, or if your doctor refuses Medicare assignment. I didn’t take Part B as a federal annuitant because I’m an infrequent consumer of medical services; so paying the Part B premium wasn’t cost effective.

“For each 12 months you delay enrolling for Part B beyond age 65, a 10% late enrollment fee is added to the premium. For example if you retired on or before age 65, and did not enroll for Part B until age 68, you’d pay 30% more than if you had enrolled when you were first eligible at 65. If, however, you are employed and covered under an employer sponsored health plan like FEHBP, or if you are covered under a working spouse’s plan, the first 10% late fee does not kick in until eight months after you or your spouse retires.

“If you choose to enroll in Part B you could enroll in a cheaper FEHBP plan, like Aetna Direct or GEHA Standard. You may change plans at any time beginning on the 30th day before becoming eligible for Medicare. Information about FEHBP plans, what they cost and what they cover is found at . You should not need Part D coverage because your FEHBP plan provides generally better drug coverage.

“If you choose not to enroll in Medicare your FEHBP provider is required by law to limit their payments to those payments you would be entitled to if you had Medicare.

“Walton Francis puts out the ‘Consumer’s Checkbook Guide to Health Plans for Federal Employees’ each year. Walt provides guidance on the Part B issue and which plans work best with Part B, like Aetna Direct. Selecting a plan that fits you best is your responsibility. Walt’s book is invaluable for that task.

“There is also a good discussion of this issue at for NARFE members.”

Nearly Useless Factoid

By Amelia Brust

One of the most successful pirates in history was Ching Shih, a prostitute in 18th-century China. She married Zhèng Yi, commander of the pirate Red Flag Fleet under the condition they have equal partnership and during their marriage the fleet grew from 200 ships to as many as 1,800 ships. After her husband died, Ching Shih took sole command. She instituted strict codes of government and punishment for pirates who broke those codes. She was known as “The Terror of South China,” and was so feared that was eventually offered amnesty and quit pirate life to open a gambling house.


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