Federal retirees with FEHB have the option to enroll in Part B or not when they are first eligible for Medicare. Like others newly eligible for Medicare, they have to weigh their options based on their particular situation, including their health and financial needs.
Most enroll in Part A, since they paid for it while still working. In most cases, Part A (covers hospital services) will pay first, FEHB will pay second.
This decision needs careful review. Let’s look at your options.
- Reasons to enroll in Part B: There are a number of reasons to enroll. First, some FEHB plans will cover copays, coinsurance, and deductibles if you enroll in Part B, so it might be in your financial favor to enroll. Also, you get a one-time chance to change FEHB plans up to 30 days before your Medicare begins. So, you could enroll in a FEHB plan with a lower monthly premium and lower copays. If you do not enroll in Part B when you are first eligible, you could have a penalty later if you decide to enroll. And, you have to wait for Medicare general open enrollment period (January 1- March 31) with coverage not starting on July 1 of that year. Lastly, you may find better coverage under Part B than FEHB for certain services, such as durable medical equipment and rehabilitation services.
- Reasons to not enroll in Part B: FEHB coverage is known to be very good coverage, and unless Congress changes it, many federal retirees find they do not need both FEHB and Part B. Also, many federal retirees find that they can save money by not having to pay two monthly premiums: one for their Part B ($104.90, for most, in 2013) and for their FEHB plan (amount varies by plans available). And, Medicare beneficiaries with higher incomes ($85,000 single, $170,000 married) have to pay higher Part B premiums (ranging from $146.90 – $335.70 in 2013).
So, it is worth your time to review the financial considerations of paying both premiums and potentially getting your deductibles and copayments waived by your FEHB plan versus paying all cost-sharing for the FEHB plan and paying a late-enrollment penalty should you decide to enroll in Part B at a later time.