Maturity and Youth

By Tammy Flanagan

December 4, 2009

At the risk of inducing a state of panic in some readers, I'll start this week's column by noting there are only 10 days left to evaluate your health care choices for the 2010 open season. Here are the top two questions I've been getting during this open season:

Let's look at each of these issues. Medicare

FEHBP plans cannot require you to enroll in Medicare. So, in many cases, they will offer incentives, such as waivers of deductibles and co-insurance, to encourage Medicare enrollment. If you are retired, over 65 and don't have a lot of medical expenses, I suggest you consider one of the less expensive federal plans along with Medicare A and B coverage. If your coverage turns out to be inadequate, then you can switch to a different plan in a later open season.

The main difference in FEHBP health plans after Medicare becomes primary payer is coverage for prescription drugs. You'll want a plan that offers the best choice of providers that are part of the plan's network. Here is the range, from lowest to highest, of nonpostal premium rates for fee-for-service plans in FEHBP:

Biweekly
Self-Only

Monthly
Self-Only
Biweekly
Self-and-Family
Monthly
Self-and-Family
$27.56 - $108.76 $59.71 - $235.64 $65.70 - $274.81 $142.36 - $595.43

The difference between the high end and low end of this spectrum can more than make up for the monthly cost of enrolling in Medicare Part B -- which, for most people, will be $96.40 per month in 2010. All FEHBP plans have catastrophic coverage and some level of prescription benefits. Many of them also waive deductibles, co-payments and coinsurance when Medicare is primary. If you do not fill many expensive prescriptions, most plans will provide adequate coverage for your major medical expenses. The Office of Personnel Management offers a comparison tool showing exactly how the plans differ.

For retirees with Medicare coverage, one very important consideration is out-of-pocket expenses for prescription drugs. Medicare Parts A and B do not cover outpatient prescription drugs, so your FEHBP plan will be the only coverage you have for prescriptions unless you enroll in Medicare Part D. Some FEHBP plans charge a flat amount or co-payment for drugs (such as $30 for a 90-day supply), while others use a co-insurance model based on a percentage of the drugs' actual cost (such as 15 percent of $3,000). Differences in prescription coverage can lead to major variations in the cost of health plans.

Covering Children

What about those of you who aren't old enough for Medicare, but have children who are reaching adulthood? Regardless of whether your child is still a full-time student, he or she will lose coverage under a self-and-family FEHBP enrollment at 22. You have four basic options for dealing with this situation:

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.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on federalnewsradio.com or on WFED AM 1500 in the Washington metro area.


By Tammy Flanagan

December 4, 2009

http://www.govexec.com/pay-benefits/retirement-planning/2009/12/maturity-and-youth/30464/