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, Kaiser, 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 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 UnitedHealthcare 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 UnitedHealthcare and Aetna. For example, with Kaiser High MA 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 rebate 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 and some Kaiser High and Standard plans offer full reimbursement of the Part B premium. The Aetna Advantage plan provides a $900 per person rebate, and the United Advantage plan provides a $600 per person rebate.
Not all MA plan options provide a Part B reimbursement; Kaiser Basic, some Kaiser Standard plans, and Kaiser Prosper plans have none. For any retirees that are subject to higher Part B premiums, as a result of income above $88,000 for an individual or $176,000 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 and United Advantage plans are available nationwide. 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.
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
Kaiser - or call 877-904-0016
UnitedHealthcare - or call 844-481-8821
Should I suspend FEHB coverage and just have Medicare Advantage?
If you join an MA plan, you can temporarily suspend your FEHB enrollment and stop paying two sets of premiums. Under the suspend option, you pay the Part B premium and sometimes an extra premium from the Medicare Advantage plan (usually only a few hundred dollars per year and often nothing at all). You can later switch out of Medicare Advantage during any future Open Season and rejoin the FEHB program as if you had never left.
Suspending your FEHB enrollment generates substantial savings because you'll pay one premium instead of two. How much you'll save depends on the precise benefits the MA plan offers to Medicare enrollees and whether it charges an extra premium.
Most MA plans are comparable to FEHB plans in hospital and medical benefits, but the prescription drug benefits will not be as good as in the FEHB program because the plans have a coverage gap where you are responsible for all or most drug costs until you reach a catastrophic limit. Additionally, FEHB plans have better catastrophic cost protection than MA plans. MA plans have separate catastrophic protection limits for medical and drug costs that taken together are in almost all cases several thousand dollars a year more than the protection limits in FEHB plans.