Tom Werner/Getty

A Retirement Journey: Health Insurance Issues

The last in a three-part series on one employee’s retirement experience. 

Over the past two weeks, we’ve focused on the story of Bob, a recent retiree. We’ve gone over his pre-retirement experience and his journey through the processing of his retirement application. This week, we’ll look at his health insurance choices.

Bob has an ongoing dilemma when it comes to health insurance. He arguably doesn’t really need Federal Employees Health Benefits coverage or Medicare, because he is a veteran with a service-connected disability. That means all of his medical needs (service-connected and otherwise) are provided by the Veterans Health Administration, at no charge. VHA does bill private insurers (including those in FEHB) for the non-service connected care it provides.

Nevertheless, Bob enrolled in FEHB during his civilian service at the Federal Aviation Administration for a couple of reasons: in case he should need it for a future spouse, should he remarry, and in order to meet the requirement of being enrolled for the five years prior to retiring. Now that he’s retired, if he cancels his FEHB coverage, it’s a one-way ticket out. Bob isn’t eligible to suspend his FEHB, since having VA health benefits is not one of the reasons an enrollee can take this action. And he isn’t eligible for TRICARE because he isn’t retired from military service. 

Since Bob is over 65, he is enrolled in Medicare Part A. But he chose not to enroll in Part B (coverage for doctors and outpatient services). This won’t put him at great risk, because FEHB doesn’t require Medicare enrollment to maintain coverage. Bob has considered dropping FEHB, but he believes it’s possible Congress may not provide enough funding in future years for the VA to care for all veterans. Veterans who are in one of the lower priority groups could conceivably lose health care benefits in the future.

Bob could enroll in Part B later in a future general enrollment period. These are held each year from Jan. 1 to March 31, with coverage effective July 1. But he might be subject to  a late enrollment penalty for every 12-month period in which he could have been enrolled but chose not to. Currently, Bob has the opportunity to participate in a Part B special enrollment period,during which he can enroll without penalty. It will end eight months after his retirement last December. 

Here’s Bob on his insurance decisions: 

I enrolled in FEHB with the GEHA Standard Option FEHB plan when I onboarded in 2012, but switched to the GEHA High Deductible Health Plan about four years ago. My current premium is $136.95 per month. The HDHP includes a Health Reimbursement Arrangement, since I am not eligible to have a Health Savings Account. Having other health insurance, such as Medicare, disqualifies members from using the HSA, so GEHA establishes an HRA that does not earn interest and is not portable if I switch to another plan. But it does provide $900 annually to spend on co-pays for qualified medical expenses, as defined by the IRS.

The way I see it, having this extra $900 a year benefit effectively reduces my monthly premium. The way it works is when the VA sends the bill for my care to GEHA, GEHA pays the amount that would be covered by the plan. The remainder is covered by the VA, leaving me with $0 out of pocket expense for my care. I don’t have to worry about meeting the deductible or paying copayments since the VA covers my medical expenses.

Upon reaching my 65th birthday, I enrolled in Medicare Part A, since there is no premium for this coverage that helps cover the cost of in-patient hospitalization. Post-retirement, I am continuing my FEHB plan with GEHA but not Medicare Part B. Still, I question whether I really need it, when all of my medical care is free at the VHA. Veterans make up 30 percent of the federal workforce. And some of those veterans, like me, have service-connected disabilities and access to free medical care through the VHA. I also know retired veterans who thought that TRICARE for Life was free, until I told them that they had to enroll in Medicare Part B as well. With very few exceptions, all of my VHA visits are non-service-connected.

Bob’s Bottom Line

Bob’s top piece of retirement planning advice is not to be afraid to ask questions. He told me the people he spoke with at various federal agencies actually seemed to enjoy helping with whatever questions he had. Keep in mind that Bob communicates very clearly and takes his time. Customer service is a two-way street.

Of course, when it comes to retirement preparation, everyone needs to run the numbers. Make some rough financial projections, so you have a general idea of your income and expenses in retirement.

Bob has about half of his retirement income coming from his Social Security benefit, a little less than 20% from his federal retirement benefit, about 30% from a private sector pension that does not receive a cost of living adjustment, and roughly 3% coming from the VA. He doesn’t need to withdraw from his investments yet.

Overall, Bob is in very solid financial shape, due to his foresight, patience and planning.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.