More on Medicare

By Tammy Flanagan

April 28, 2006

In last week's column, we looked at the basics of Medicare A, B and C. This week, we'll address the military health benefit known as TRICARE for Life, which coordinates with Medicare A and B. And we'll finish up by looking at the new Medicare Part D program, covering prescription drug benefits.

TRICARE for Life

TRICARE for Life works a lot like the Federal Employees Health Benefits Program and Medicare. Uniformed military service retirees and their dependents who are eligible for Medicare can enroll in TRICARE for Life (with no premiums) along with Medicare Parts A and B. The premium for Medicare Part B is $88.50 per month in 2006, and you must be paying it to enroll in TFL.

Most out-of-pocket expenses are covered. Here are a few exceptions:

Retired FEHBP enrollees may suspend FEHBP coverage to use TRICARE for Life.

Medicare Part D

Beginning this year, all people covered by Medicare are able to enroll in plans that cover prescription drugs. A retiree's FEHBP coverage does not change as a result of this new program, known as Part D. Plans vary, but in general, this is how they work:

A retiree who is covered by an FEHBP standard option fee-for-service plan that has a drug deductible of more than $250 and/or a co-pay of more than 25 percent may benefit from the new Medicare drug benefit. Such plans include the Mail Handlers and GEHA standard option plans.

Some Medicare prescription plans that have premiums as low as $8 per month. A retiree who has Medicare A and B as primary insurance and who uses the GEHA or Mail Handlers standard option FEHBP plans should look at a Medicare Part D plan that serves their area. If your drug expenses are high, Medicare Part D might provide some relief.

On the other hand, many FEHBP prescription programs exceed the benefits offered by Part D. In the Blue Cross/Blue Shield standard option plan, if you use a brand-name drug that costs $200 per month, you would only pay $50 if you purchase the medication at a local pharmacy and only $35 if you purchase the drug by mail order -- and you can order a 90-day supply. There is no deductible for drugs with this plan. So there would be no additional benefit to be enrolled in a Medicare Part D plan. Under Part D, people with incomes below a certain limit don't have to pay premiums or deductibles for prescription drugs. To qualify for such help, your available resources generally must be less than $11,500 (or $23,000 if you are married and living with your spouse). Most people who qualify for the extra help will pay no premiums, no deductibles and no more than $5 for each prescription. If you qualify to be covered under this provision but do not enroll in a Medicare drug plan, Medicare will enroll you in one automatically to make sure you get this important coverage. For more information, contact the Social Security Administration at www.socialsecurity.gov or 800-772-1213.

You may sign up for Part D coverage until May 15. Because all FEHBP plans have as good or better coverage than Medicare, they are considered "creditable coverage." So, if you decide not to join a Medicare drug plan now but change your mind later, you can sign up without paying a late enrollment penalty. (This could turn out to be an important feature if the federal government reduces or eliminates drug coverage to Medicare-eligible federal retirees under FEHBP.) The next opportunity to enroll will be from Nov. 15 to Dec. 31. However, if you lose FEHBP coverage, you must join a Medicare prescription drug plan within 63 days or you will pay the monthly premium plus the late enrollment penalty.

Resources

To Do Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

By Tammy Flanagan

April 28, 2006

http://www.govexec.com/pay-benefits/retirement-planning/2006/04/more-on-medicare/21693/