Medicare Disadvantage

Why coverage under the Federal Employee Health Benefits Program is better for most federal retirees than Medicare parts C and D.

A couple of weeks ago, I wrote about whether federal employees and retirees should consider enrolling in Medicare parts A and B (covering inpatient and outpatient care) when they reach age 65.

You may wonder if you should also enroll in Medicare Part C (known as Medicare Advantage) and Part D (prescription drug coverage). The general answer is no, you will not need Medicare Part C or D coverage as long as you are enrolled in a Federal Employees Health Benefits Program plan or have TRICARE for Life coverage based on military service. Let’s explore in a little more detail why that’s the case.

You can find information about Medicare Advantage plans by entering your zip code in the Medicare Plan Finder. You will need to answer a few questions about your current health coverage. Also, you can enter your prescriptions, so that their cost will be included in the total cost of enrolling in the plan. I entered my zip code and picked the option that I was new to Medicare (even though I won’t be eligible for about another five years). I also entered in a couple of prescriptions.

When I compared using Medicare Advantage to an FEHBP plan in combination with Medicare A and B, I found I would have much greater choice of providers both in and out of network under FEHBP. I went to several Medicare Advantage plan websites to search for a primary care doctor in my area and the closest was more than eight miles from my house. In some cases there were no network providers in my area. Many of the plans operate as HMOs and require enrollees to stay within the plan network.

Many FEHBP plans, on the other hand, do not require that you use in-network providers in order to waive your deductible, copayment and coinsurance, as long as Medicare is the primary payer. In fact, I could choose any provider who sees Medicare patients. In my zip code, there are 224 doctors who practice internal medicine within 15 miles and 27 providers within five miles who accept Medicare A and B.

Many FEHBP plans will waive out of pocket expenses for both inpatient as well as outpatient care. And many of the FEHBP plans provide significantly better coverage for prescriptions than what is available with Medicare Part C plans as well as the stand-alone Part D prescription plans. Some FEHBP plans cover generic prescription drugs for free or at very low cost.

I checked the Medicare Plan Finder for prescription drug coverage for my two generic prescriptions and I found Part D plans that ranged from $17 per month to more than $170. Using the three lowest-cost Part D plans, I would pay from $74.30 to $175.50 for the last four months of 2018 for my two generic prescriptions. I just filled my prescriptions using my FEHBP plan benefits (without Medicare), and paid $6 for a three-month supply.

Check your FEHBP plan website or brochure to find out more about your current plan as well as other FEHBP plan options and benefits. To see how TRICARE for Life works with Medicare, visit the TFL website.

According to the Office of Personnel Management, there are currently 2.6 million annuitants on the federal retirement rolls, and 1.8 million of them are enrolled in an FEHBP plan. About 145,000 annuitants have suspended FEHBP coverage. More than 96,000 of them have done so in favor of TRICARE. OPM does not track annuitants who have suspended FEHBP coverage in favor of a Medicare Advantage plan.

This year the annual FEHBP open season runs from Nov. 12 to Dec. 10. By the end of September, the 2019 FEHBP rates and plan information should start to be revealed.