Everything You Need to Know About Medicare Part C - Medicare Advantage
Federal retirees have Medicare Advantage (MA) plans to consider joining. Our analysis shows that some of these offerings are an outstanding value.
Aetna, APWU, Compass Rose, Kaiser, Humana, MHBP, Rural Carrier, and UnitedHealthcare now offer MA plans designed especially for federal retirees that are available for enrollment with most of their FEHB plan offerings. These MA plans pair a Part B premium reimbursement—in some cases the full amount—with greatly reduced or no cost-sharing for healthcare expenses.
Cost-sharing reduction for healthcare expenses
We've found that these new MA plans have better benefits than virtually all existing FEHB and MA plans. For example, the APWU, UnitedHealthcare, Humana, MHBP, Compass Rose, Rural Carrier, and Aetna MA plans charge $0 for any inpatient or outpatient benefit and have no out-of-pocket maximum for healthcare expenses other than prescription drugs. They promise you'll pay nothing (subject, of course, to the usual restrictions on paying only for medically necessary care). Moreover, they also charge nothing for using non-network providers, so long as they participate with Medicare. The Kaiser MA plans do not let you go out-of-network and the cost-sharing benefits are not as generous as you would find with the other MA options. For example, with Kaiser High Medicare Advantage 2 in the D.C. area, you'll pay a $5 copay to see your primary care doctor or $15 to see a specialist.
Part B premium reimbursement
Most of the MA plan options provide some form of reimbursement for the Medicare Part B premium, and some even provide a full reimbursement. UnitedHealthcare Choice plans have an $1800 annual reimbursement and some Kaiser High and Standard plans offer full reimbursement of the Part B premium. The Foreign Service MA plan, NALC-High MA plan, MHBP Standard MA plan, and Rural Carrier MA plan each provide a $900 per person rebate per year, the Humana Value MA plan, Aetna Advantage MA plan provide $1,200 per person per year reimbursement, the APWU High MA plan has a $1250 per year reimbursement, and the Compass Rose MA plan has a $1500 per person reimbursement.
Not all MA plan options provide a Part B reimbursement; Kaiser Prosper, and some Kaiser Standard and High plans, plans have none. For any retirees that are subject to higher Part B premiums, as a result of income above $97,000 for an individual or $194,000 for a couple, some of the Kaiser plans cover a portion of the higher premium, but not all of it. Overall, the MA plan options aren't as good of a deal for retirees that pay the income tested Part B premiums.
How much money can I save?
The Guide provides yearly cost estimates (premium plus expected out-of-pocket expenses for someone like you) for every FEHB plan, taking into consideration the impact of adding Medicare Part B and reviewing any Medicare Advantage options offered by the plans. Our analysis shows that many of the MA plans provide tremendous savings for federal retirees.
Where are these plans available?
The Aetna Advantage, APWU High, and MHBP Standard MA plans are available nationwide to all retirees. Rural Carrier and Compass Rose are also available nationwide but have enrollment restrictions. Kaiser plans are available in the Washington, D.C. area, Atlanta, GA area, Denver, CO area, Northern CA, Southern CA, Fresno, CA area, and in the states of Washington, Hawaii, and parts of Oregon and Idaho. United Choice plans are available in almost half of the U.S. Humana Value Medicare Advantage are available in parts of Florida, Georgia, Arizona, Illinois, Kentucky, Missouri, Ohio, Texas, and Tennessee.
How do I enroll?
Enrollment for the MA plans requires three separate and distinct actions that should be done in the following order:
- Apply for Medicare Part B at Medicare.gov. You'll not be able to join an MA plan without first being enrolled in Part B. The enrollment processing for Part B is the longest step, so it makes sense to start with it first.
- Enroll with OPM in the FEHB plan that corresponds to the MA plan you want to join. Remember, retirement is not a qualifying life event, but you can change your FEHB plan up to 30 days before you turn 65 or during Open Season.
- Once you've enrolled in the FEHB plan with OPM, OPM provides daily member rosters to the insurance carriers. Wait a couple of business days and then you'll need to call the MA carrier to enroll in the MA plan.
For more information about these plan offerings, consult the Guide or contact the carriers.
Aetna - or call 866-241-0262
APWU - or call 855-383-8793
Compass Rose - or call 844-279-9286
Humana - or call 855-235-8579
Kaiser - or call 877-904-0016
MHBP - or call 866-241-0262
UnitedHealthcare - or call 844-481-8821
For retirees subject to higher IRMAA premiums, you'll face both Part B IRMAA and Part D IRMAA with Medicare Advantage plans. The way that the Medicare Advantage plans are structured requires the enrollee to join a Part D prescription drug plan which would trigger the Part D IRMAA increases if you're a high income household. The result is that these plans are of less value than other FEHB options, when you consider the impact of both the higher Part B and Part D premiums. However, for some retirees, IRMAA is a short term problem as their income will fall below the IRMAA threshold in the future. It might make sense to take the short term hit of higher Part B and Part D premiums now compared to the 10% penalty per year of not having Part B and trying to enroll back in Part B in the future.