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FEHBP and Medicare: Make the BEST Choice

A NARFE Federal Benefits Institute Webinar

Presented by Tammy Flanagan

Sponsored by National Active and Retired Federal Employees Association 2

Medicare

Original Medicare: Part A–Hospitalization

Part B–Doctors services, outpatient care

Part C–Medicare Advantage Plans

Includes Part A and Part B

Part D–Prescription drug coverage

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FEHBP

• Federal Employees Health Benefits Act of 1959

• 90 different plans with 250+ plan options

• OPM authorizes contract and regulates

• Employees & retirees: same plans / same cost

• $50 billion program

• 8.2 million enrollees

• About 85% of federal employees participate

• About 90% of retirees participate

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Test Your Knowledge When did federal employees begin paying into Medicare?

A. 1960 B. 1965 C. 1983 D. 2001

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Test Your Knowledge When did federal employees begin paying into Medicare?

A. 1960 B. 1965 C. 1983 D. 2001

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Did you know?

You are not required to enroll in Medicare at age 65

Your Federal Employee’s Health Benefits Program

plan will continue to provide coverage

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Part A - The Easy Part!

No premium, covered by 1.45% Hospital Insurance Tax

In general, Part A covers:

• Hospital care

• Skilled nursing facility care

• Nursing home care (as long as custodial care isn't the only care you need)

• Hospice

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Part A - Hospital Insurance

Medicare pays FEHBP pays

Days 1 - 60 All but $1,288 deductible $1,288 deductible

Days 61 - 90 All but $322/day of each benefit period

$322 / day

Days 91 and beyond All but $644/day up to 60 days per lifetime

$644 / day

Beyond lifetime reserve days

$0 All Costs

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Excerpt from 2016 OPM Carrier Call Letter

• Limiting cost growth;

• Managing prescription drugs;

• Ensuring access to care;

• Coordinating benefits for the Medicare population;

• Implementing plan performance assessment; and

• Continuing to implement Self Plus One coverage. https://www.opm.gov/healthcare-insurance/healthcare/carriers/2016/2016-03.pdf

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Hold Harmless

No COLA for Social Security benefit

= No increase in Part B Premium

The provision protects only people who have Part B

premiums withheld from their Social Security checks.

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NARFE and others are urging Congress to act quickly to avert Medicare increase:

“Should the Medicare trustees’ assumptions hold, roughly 70

percent of Medicare beneficiaries will be held harmless,

while the remaining 30 percent will shoulder the cost of the

expected premium increase,” the letter said.

New Medicare enrollees; individuals not collecting Social

Security benefits; and beneficiaries already paying higher,

income-related premiums will be most affected.

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History of

Part B Premiums

Year Part B Premium

1966 $3

1976 $7.20

1986 $15.50

1996 $42.50

2006 $88.50

2007 $93.50*

2013

$104.90*

2014

2015

2016 $104.90 or $121.80*

2017 possible 22% increase

to $149*

Yearly cost: $121.80 x 12 months = $1,461.60

$1,461.60 x 2 people = $2,923.20

*Higher premiums for high-income enrollees

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Your Annual Income

Your 2016

Monthly Premium

% of Part B

Premium Individuals Couples

Equal to or

below $85,000

Equal to or

below $170,000

$121.80 25%

$85,001 –$107,000 $170,001 – $214,000 $170.50 35%

$107,001 – $160,000 $214,001 – $320,000 $243.60 50%

$160,001 – $214,000 $320,001 – $428,000 $316.70 65%

Above $214,000 Above $428,000 $389.80 80%

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Test Your Knowledge

Percentage of non-pediatric primary care physicians who accept Medicare in the United

States

A. 50% B. 72% C. 93% D. 35%

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Test Your Knowledge

Percentage of non-pediatric primary care physicians who accept Medicare in the United

States

A. 50% B. 72% C. 93% D. 35%

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Finding Medicare Doctors

Medicare

Physician

Compare

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Enrolling in Medicare

Initial Enrollment: 7 months beginning 3 months before you turn 65

General Enrollment: January 1 - March 31 (coverage begins July 1)

Special Enrollment: 8 months following

end of employment that included group

health insurance coverage

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Enrolling in Medicare

Enrollment is automatic for Medicare Part A and Part B if you are:

• Receiving benefits from Social Security or the Railroad Retirement Board

• Under age 65 and have a disability.

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Enrolling in Medicare

● Apply online www.ssa.gov

● By phone 1-800-772-1213

● In person at any Social Security office

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Primary Payer

When you – or your covered spouse – are age 65+ and you…

Medicare FEHBP

Are working and have your insurance deducted through current employment

The Federal Employees Health Benefits Program and Medicare (RI 75-12)

Special Enrollment: 8 months following end of employment that included

group health insurance coverage

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Primary Payer

When you – or your covered spouse – are age 65+ and you…

Medicare FEHBP

Are retired and have your insurance deducted from your retirement benefit

The Federal Employees Health Benefits Program and Medicare (RI 75-12)

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Advantages of enrolling in Medicare A & B

Caution: Many of the advantages of enrolling in

Medicare A & B are realized after Medicare is primary payer.

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Reasons to Consider Enrollment Medicare A & B

• Avoid late enrollment penalty for Part B

• You may leave a regional plan / HMO

• Better chance of avoiding catastrophic cap

• Begin scheduling social life around doctor appointments

• Move back to U.S. from overseas

• Live another 40+ years after 65

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When Medicare is primary...

• FEHBP plans reap rewards by being secondary payer

• You no longer will need to use FEHBP preferred providers (some plans)

• You no longer need precertification hospital stays

• Use any provider that accepts Medicare

• Providers are required by law to file claims

– This is true whether or not they accept Medicare

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When Medicare is primary...

• Lower out of pocket cost for health care – Some FEHBP plans will waive deductibles,

co-payments and coinsurance – Some FEHBP plans will lower cost of

prescription expenses

• Medicare specializes in the needs of the elderly and disabled – Skilled nursing care – Durable medical equipment – Physical, occupational and speech therapy

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Medicare may be better for:

• Orthopedic and prosthetic devices

• Durable medical equipment

• Home health care

• Limited chiropractic services

• Therapies (physical, occupational, etc.)

• Some medical supplies

(Check your plan brochure for details.)

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Medicare does not cover:

• Long-term care (also called custodial care)

• Most dental care

• Eye examinations related to prescribing glasses

• Dentures

• Cosmetic surgery

• Acupuncture

• Hearing aids and exams for fitting them

• Routine foot care

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Some/all FEHBP plans provide...

• Emergency care (all plans) and non-emergency care (not all) outside the United States

• Dental and Vision care (not all)

• Catastrophic coverage

• Prescription coverage

• Hearing aids (not all)

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What Are the Options?

Change FEHBP plan Less expensive plans available

Delay Part B enrollment

Incur 10% surcharge for every 12 months delay (exception for current employment health coverage)

TRICARE for Life Only available to military retirees and spouses

Medicare Advantage Plans

May incur higher out-of-pocket expenses

Medicaid Must meet the financial requirements

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Cost of FEHB Plans

Self Only Self Plus One

Self Only Self Plus One

APWU High Option

$204.29 $406.75 GEHA Standard $116.70 $250.90

APWU CDHP $133.92 $294.62 GEHA HDHP $122.85 $264.14

BCBS / Standard $229.64 $521.67 MHBP Value Plan

$129.44 $306.69

BCBS / Basic $154.32 $356.72 MHBP Standard

$147.08 $338.56

GEHA High Option

$219.83 $509.36 MHBP HDHP $140.55 $311.03

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Cost of FEHB Plans

Self Only Self Plus One

Self Only

Self Plus One

NALC High $167.70 $381.74 United Healthcare of CA High

$177.77 $321.28

NALC CDHP $116.06 $251.06 United Healthcare of CA Standard

$153.27 $299.35

NALC Value $95.25 $206.03 Kaiser Mid-Atlantic High

$161.41 $419.40

SAMBA High $372.68 $845.67 Kaiser Mid-Atlantic Standard

$121.01 $273.47

SAMBA Standard $158.07 $360.14 Aetna Direct $120.05 $263.29

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How to choose?

• Consider a less expensive FEHBP plan

• Compare cost of prescriptions

• Compare Medicare enrollment incentives

• Is there a health fund or do you have an HSA?

• Do you have any chronic illnesses?

• Do you need additional dental / vision plan?

• Open seasons occur every year / one personal age 65+ event

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Use Tools to

Compare:

Office of Personnel Management

Health & Insurance

COMPARE PLANS

● Find plans by location

● Find plans by name

● Find plans by plan code

Enter up to 4 plans

https://www.opm.gov/healthcare-insurance/healthcare/plan-information/compare-plans/

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Use Tools to

Compare

Office of Personnel Management

Choose a Plan & Enroll

FEHBP Plan Information for 2017

https://www.opm.gov/healthcare-insurance/healthcare/plan-information/plans/

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Use Tools to

Compare

FEHBP Plan Brochures

Medicare info: Section 9

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Age 65 and over without Medicare

• Pay deductibles, co-payments and coinsurance.

• Subject to catastrophic limits of plan.

• FEHBP will limit payments for inpatient hospital care and physician care to payments you would be entitled to if you had Medicare.

• Your physician and hospital cannot bill you for more than they could bill you if you had Medicare.

• Outpatient hospital care and non-physician-based care are not covered by this law; regular Plan benefits apply.

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TRICARE for Life

• Must enroll in Medicare A & B

• May “Suspend” FEHBP

• No need for Medicare Part D

• No need for Medicare Part C

• 1-800-538-9552

• 1-866-363-2883 (TDD/TTY)

• http://www.tricare.mil/LifeEvents/Medicare.aspx

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Low-Income Benefits

• Medicaid

• Medicare Savings Programs (4 kinds of MSP)

– Call your State Medicaid Program

• PACE (community based care)

• Supplemental Security Income

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More Information Available:

• Medicare Interactive Website – https://www.medicareinteractive.org/

• National Association of Area Agencies on Aging

– http://www.n4a.org/

• State Health Insurance Assistance Program (SHIP) – https://www.shiptacenter.org/

• Medicare – www.medicare.gov (Your Medicare Costs tab)

• Social Security Administration – 1-800-772-1213 or https://www.ssa.gov/pubs/EN-05-11011.pdf

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narfe Magazine

October 2016: Pages 52 -56

Stay tuned for more: November and

December

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NARFE New York Federation

http://www.narfeny.net/

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To-Do List

• Consider Self Plus One (for family of two)

• Report Medicare enrollment to FEHBP and doctors

• Compare and consider all available FEHBP plans

• Attend a local health fair if available

• Consider future health care costs

• Spend as much time on choosing health plan as you do planning your next vacation!

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Open Season

November 14-December 12

GF-PPT-1016-001

Find the health plan that fits.

geha.com/switch