All posts by : Shamima A

One of the questions I am asked most often is, “Why do I need Medicare if I already have lifetime health insurance coverage under the Federal Employees Health Benefits program?” For some retirees, the answer is, “It’s required.”  This includes:

• Military retirees must enroll in Medicare Parts A and B to be eligible for Tricare for Life (TFL). TFL is “Medicare-wraparound” coverage. There are no enrollment fees, but you must pay Medicare Part A and Medicare Part B monthly premiums. Federal retirees may suspend FEHB coverage and premium payments at any time. Visit www.opm.gov/forms  to get a Health Benefits Cancellation/Suspension Confirmation form (RI 79-9). You can learn more about TFL here: https://www.tricare.mil/Publications/Handbooks/tricare_for_life 
• Postal retirees who retire after Jan. 1, 2025, and are younger than age 64 on that date, are required to enroll in Medicare Part B when they become eligible to keep their health insurance coverage under the new Postal Service Health Benefits Program. These employees’ family members are also required to enroll in Medicare Part B when they become eligible for Medicare. You can learn more about the new PSHB program here: https://www.opm.gov/healthcare-insurance/pshb/ 

For other federal employees, the decision to enroll in Medicare is optional. To test your understanding of the coordination of Medicare and FEHB, here are 10 True or False questions. You will find the answers at the end.

1. True/False Some FEHB plans will give money back to enrollees for paying the Medicare Part B premium.
2. True/False All FEHB plans waive their cost-sharing (deductible, copayments, and coinsurance) when Medicare is the primary payer.
3. True/False Medicare Part B will cover drugs that are administered by a health care provider, or through medical equipment at home such as drugs that are injected or infused.
4. True/False Many FEHB plans offer a Medicare Advantage option to plan enrollees.  You’ll continue to pay your Part B premium with the Medicare Advantage plan. It provides the same coverage as Original Medicare but with additional benefits you wouldn’t get, such as $0 deductible and excellent prescription benefits. Plus, many of these plans will reduce your Medicare Part B premium by $100 or more per month. You may also get access to programs that may help you reach your health potential, such as SilverSneakers® fitness membership and more.
5. True/False Federal retirees who cancel their FEHB coverage to enroll in Medicare Parts A and B can later reenroll.
6. True/False Another name for Medicare Advantage Plans is Medicare Part C.
7. True/False Retirees who choose not to enroll in Medicare Part B at age 65 or at retirement (if later), can enroll at a later age without incurring a late enrollment penalty.
8. True/False Employees who retire after age 65 may delay Medicare Part B enrollment without incurring a late enrollment penalty during a Special Enrollment Period that lasts eight months after retirement.
9. True/False To find the best FEHB plan to enroll in when Medicare is the primary payer, you should choose one with the most expensive premiums.
10. True/False Starting in 2024, some FEHB plans have enrolled retirees who have Medicare Part A and/or Part B in a Part D, Medicare Prescription Drug Program (MPDP).

Answer Key:

1. True. As an incentive to enroll in Medicare Part B, some FEHB plans offer a partial rebate for Part B premiums or a health fund to use to pay some of the premium.  These rebates vary from plan to plan but are often between $800 – $1,000 / year per individual enrolled in Part B.  
2. False. Check Section 9 of your FEHB plan brochure or your FEHB plan website to learn which of the provider’s plans coordinate best with Medicare Part A & Part B.
3. True. The key difference between drugs covered under Medicare Part B and Part D is that Part B generally covers drugs that require administration by a healthcare provider, like injections given in a doctor’s office, while Part D covers most prescription drugs that can be self-administered at home, like pills or inhalers you take yourself; essentially, Part B covers drugs usually administered during a medical service, while Part D covers most standard prescription drugs you buy at a pharmacy.
4. True. Many FEHB carriers have introduced a Group Medicare Advantage Plan for their members.  This provides a choice and value to members through new plan options. Once enrolled in the Medicare Advantage option, there will be the benefits of your original Medicare plan (Parts A and B), with prescription drug coverage (Part D) and additional benefits and features for no additional premium.
5. False. If you are a federal retiree who continued your FEHB coverage and you decide to cancel your FEHB enrollment, you should be aware of the consequences.  You CANNOT re-enroll in the FEHB Program; it is a one-way ticket out of the program.  The only exception is if you are canceling your enrollment be covered under your spouse’s FEHB enrollment. You and your enrolled family members will not be eligible to enroll in temporary continuation of coverage or convert to a nongroup contract; in addition, the 31-day extension of coverage does not apply to cancelled enrollments.
6. True. “Medicare Part C” and “Medicare Advantage” are the same thing; they both refer to a type of health plan offered by private companies that provides coverage like Original Medicare (Parts A and B) and they often include additional benefits like prescription drug coverage (Part D) and sometimes dental or vision care. You may suspend your FEHB coverage to enroll in a Medicare Advantage plan using the medicare.gov plan finder or you can remain enrolled in your FEHB plan while enrolled in a Medicare Advantage Plan.  Some FEHB plans offer this coverage as an enhanced benefit of the FEHB plan, or you may enroll in a “commercial” Medicare Advantage Plan through https://www.medicare.gov/plan-compare/#/?year=2024&lang=en 
7. False. If you did not enroll for Part B during your initial enrollment period (IEP) which began three months before you reached age 65, the month of your birthday, and three months after your birthday, you may qualify for a Special Enrollment Period (SEP) to sign up for Part B anytime as long as you or your spouse is working and you’re covered by a group health plan through that employment.
8. True. For federal employees who are covered by FEHB through their current employment (or their spouse’s current employment), there is an 8-month SEP which starts the month after your employment ends. If you sign up during an SEP, the late enrollment penalty will not apply.  Other than your IEP or SEP, you can only sign up for Part B during the General Enrollment Period (GEP), which runs from January 1 to March 31 each year. Your coverage will begin the first of the month following the month you enrolled during the GEP. You will pay a permanent penalty equal to 10 percent of the standard Part B premium for every 12-month period that you could have been enrolled in Part B but weren’t.
9. False. The premium cost of the FEHB plan is not the only factor that determines the quality of the plan as some of the best plans that coordinate benefits with Medicare are among the least expensive.  While it is true that some of the least expensive plans provide more “basic” coverage with higher cost sharing, many plans that work very well with Medicare are low-cost plans such as the following plan options as well as many HMOs that are specific to your area (premiums listed below are 2024 rates; 2025 rates will be available closer to open season): 
   1. BC/BS Basic, $ (Plan Code) $207.44 (111), $568.96 (112), $517.03 (113)
   2. APWU High Option, $ (Plan Code) $269.79 (472), $658.77 (472), and $530.73 (473)
   3. Aetna Direct, $ (Plan Code) $160.80 (N61), $405.51 (N62), $352.64 (N63)
   4. Aetna Medicare Advantage, $ (Plan Code) $125.00 (Z24), $331.25 (Z25), $275.00 (Z26)
   5. GEHA Standard Option $ (Plan Code) $151.99 (314), $403.76 (315), $326.79 (316)
   6. GEHA High Option, $ (Plan Code) $235.41 (311), $663.56 (312), $540.95 (313)
   7. MHBP Standard Option, $ (Plan Code) $174.65 (454), $405.88 (455), $402.01 (456)
   8. Foreign Service Benefit Plan, $ (Plan Code) $179.01 (401), $442.83 (402), $457.82 (403)
   9. Compass Rose Standard Option, $ (Plan Code) $114.55 (424), $274.92 (425), $252.00 (426)
   10. NALC High, $ (Plan Code) $237.05 (321), $480.54 (322), $554.36 (323)
   11. SAMBA Standard $(Plan Code) $185.03 (444), $422.13 (445), $398.24 (446)

True. The Inflation Reduction Act of 2022 (Public Law 117-169) made some significant improvements in the cost of prescription drugs under Medicare Part D. As a result of these improvements, the Office of Personnel Management encouraged FEHB carriers to offer Medicare Part D benefits either through Medicare Advantage Group Waiver Plans (MA-PD EGWP) or Prescription Drug Plan (PDP) EGWPs through traditional FEHB plans.  For the 2024 plan year, 39 FEHB plans offered this prescription drug benefit.

With a Friday deadline looming before the Senate to help ensure that the benefit payments of 7 million veterans will go out on time, lawmakers sought to understand how the Veterans Affairs Department ended up with a $3 billion budget shortfall with less than a month left in the fiscal year.

The short answer, it seems, is the department’s success in enrolling veterans eligible for new benefits from the Honoring Our Promise to Address Comprehensive Toxics (PACT) Act alongside other benefits, VA officials told the Senate Veterans’ Affairs Committee during a hearing Wednesday.

“The reason we find ourselves in this situation is, frankly, our workforce has over-delivered on what were already aggressive projections,” said Josh Jacobs, VA undersecretary for benefits, at the hearing. “For the last year, we delivered more benefits to more veterans at any other time in our history.” 

Jacobs went on to say that the VA has granted 1.1 million benefits this fiscal year alone, half of which are from the PACT Act, with the department granting benefits to 65% of overall claims and 75% of PACT Act claims.

That is coupled with an expansive outreach campaign conducted by the department to inform veterans of what benefits they may be eligible for. 

Much of that surge was anticipated, as the VA expanded benefits eligibility for veterans with 23 respiratory illnesses related to burn pits used by the military. It also began ramping up hiring efforts, including 61,000 new hires at the VHA in fiscal 2023, to be able to manage a growing influx of patients and beneficiaries.

Jacobs said that benefits growth remained in line with the department’s projections through the spring. However, at the end of June, as part of its midsession review, the VA found there was potential for it to deliver 2.5 million claims decisions, well above its projections of 2.2 million decisions. 

“As we updated those projections, we then had to work to verify and validate that the assumptions that we were making were in fact possible,” he said. “As soon as we did that, we communicated the risk and the potential need to Congress.”

But that communication — which also included a projected $11.97 billion shortfall in fiscal 2025 due to rising hiring and pharmaceutical costs within the Veterans Health Administration — came after the Senate appropriations subcommittee marked up its fiscal 2025 funding bill for the VA, leaving some senators baffled as to why there they weren’t warned by the VA or the Office of Management and Budget sooner.

“My complaint today is really with the level of trust and respect that I would hope we have from the Department of Veterans Affairs,” said ranking member Jerry Moran, R-Kansas. “You all do a really good job communicating with me on an ongoing basis, but if you do that on things unlike this significant shortfall, I’m troubled. Why wouldn’t you call and inform us?”

Jacobs later apologized to Moran for not directly notifying him of the potential for the shortfall, adding that the VA has updated its out-year fiscal 2025 and 2026 projections and will increase the frequency of reports to Congress to provide monthly comparisons.

“One of my lessons here, and one of our lessons, is that we will provide earlier communications. I will also say we didn’t have a high level of confidence. We were working to get independent verification that the estimate was, in fact, real and that the needs were verified,” he said. 

The House passed a supplemental funding bill Tuesday to provide the VA $2.89 billion to cover benefits costs through the end of fiscal 2024. If the Senate doesn’t pass that legislation before Friday, Jacobs said it’s possible that 140,000 veterans and survivors would experience delays of up to two weeks to receive their benefits.