Reasons Why You Should Enroll in Medicare Part B
The most common question we receive every Open Season from retirees and soon-to-be retirees is whether to take Part B and pay the extra premium. Given that there is a penalty if you delay Part B enrollment when you first become eligible to join, its important to make that decision before you retire.
About 70% of federal retirees enroll in Part B, which means paying two premiums and in essence two duplicative insurance programs. A portion of the retirees that join Part B might do so as a hedge against the elimination of FEHB retiree benefits. It's possible a future Congress might consider doing so as a cost cutting measure, however unlikely that may be. But there are other more relevant reasons to join Part B such as FEHB plan options that are less expensive to join with Part B then without Part B. Here's what you need to know if you're going to enroll in Part B to maximize your coverage and save the most money.
- Plan Choice—Almost all national plans waive their hospital and medical deductibles, copays, and coinsurance for members enrolled in both Medicare Parts A and B. In effect, they wrap around Medicare. With Medicare Parts A and B and most national FEHB plans, you will have close to 100% coverage of almost all medical expenses, with the big exception of prescription drugs and a few other services like chiropractor or acupuncture visits. If you decide to enroll in Part B, make sure you find a plan that has wrap around benefits, which reduces cost-sharing for medical services and helps offset the expense of the second premium. The Guide will show you how the plans rank based on estimated yearly cost when you have just Part A or when you have Parts A and B. Soon-to-be retired employees can see the Medicare comparisons by choosing Retiree as your employment status and by selecting an age of 65 or older. In the Washington, D.C. area, a retired couple enrolled as self-plus-one with income below $176,000 would see a range of adding Part B as low as -$230 and as high as $3,620, almost the entire amount of both Part B premiums. Make sure you understand how Part B will help reduce (or increase) your out-of-pocket medical expenses with your existing FEHB plan before you decide on your plan choice in retirement.
- Part B Reimbursement—A few FEHB plans now offer partial Part B premium reimbursement, including two national plans: Blue Cross Basic and GEHA High. Of course, if you're enrolled in a CDHP/HDHP plan, you can also use the HRA plan contribution to help pay for your Part B premiums as well.
- More Access to Providers—If you join Part B, you can use the Part B benefit to go outside the FEHB plans doctor network and pay only 20% of the Medicare allowed charge. For any BCBS members, this added out-of-network flexibility strengthens the case of considering Blue Cross Basic compared to Blue Cross Standard. One of the biggest differences between BCBS Standard and Basic is the out-of-network benefit available in the Standard plan. Without Part B, you receive no insurance benefit from going out-of-network if you're enrolled in BCBS Basic. With Part B, you can. Overall, we see far less expense for retirees in BCBS Basic compared to BCBS Standard, and with Basic there is an additional benefit of a partial Part B premium reimbursement.
- Medicare Advantage Eligibility—By joining Part B, federal retirees gain access to Medicare Advantage (MA) plans offered by a few FEHB carriers. Aetna, UnitedHealthcare, and Kaiser offer special Medicare Advantage plans for federal retirees. Some of these MA plans waive all out-of-pocket medical expenses, except for prescription drugs, and some have a lower yearly estimated cost paying the Part B premium than not taking Part B.