Open Questions About Open Season
Sorting out options for federal health insurance and Medicare can be tricky.
The annual open season for choosing a health, dental, and vision plan under the Federal Employees Health Benefits program, the Federal Employees Dental and Vision Plan, and flexible spending accounts is more than halfway over. That leaves only two weekends left to consider your options for 2023.
For many federal retirees and survivor annuitants, that means understanding the interactions between FEHB and Medicare—specifically, whether they need Medicare Part B and how it differs from Part C.
Original Medicare includes Part A and Part B. Part A helps cover inpatient care in hospitals, skilled nursing facilities, hospice care, and home health care. Part B is medical insurance that helps cover services from doctors, outpatient care, home health care, durable medical equipment and preventive services.
Part C, also known as Medicare Advantage, is provided by private companies and offers an alternative to original Medicare that bundles Parts A and B and usually Part D (prescription drug coverage). These plans may have lower out of pocket costs, but in most cases, you have to use doctors in the plan’s network.
FEHB prescription drug coverage is, on average, expected to pay out as much as the standard Medicare prescription drug coverage. So generally, those covered under FEHB don’t need Part D.
What about Part B? As you weigh whether to sign up for it, consider:
- Your FEHB plan will continue to cover you if you choose not to enroll in Medicare Part B, so it is not required.
- Postal retirees are not yet required to enroll in Medicare. The new Postal Service Health Benefits plan is not scheduled to launch until 2025.
- If you are employed and covered by health insurance through your current employment, you can delay the decision to enroll in Medicare Part B without penalty. You will have a special enrollment period to enroll in Part B within eight months of your retirement.
- If you are covered by your spouse’s health insurance, you can also delay the decision to enroll in Part B without penalty. You will have a special enrollment period when your spouse retires.
There are benefits of enrolling in Medicare Parts A and B when retired. They include:
- Many FEHB plans will waive their cost sharing when Medicare is the primary payer. This means you will no longer have to meet an annual deductible or pay a copayment or coinsurance for inpatient and outpatient care that is covered by Medicare and your FEHB plan. Check Section 9 of your FEHB plan brochure to see if your plan provides this benefit.
- Some FEHB plans will provide a health fund, health reimbursement arrangement or Medicare Part B reimbursement if you are enrolled in Parts A and B. This fund can be used to help cover the extra cost of enrolling in Part B.
For 2023, there are many FEHB plans that offer incentives to enrolling in Medicare A and B, but some provide these benefits only if you join the Medicare Advantage option of the FEHB plan. Unlike the Medicare Advantage plans available commercially, these plans maintain the underlying FEHB coverage, which means you may not need to stay within the plan network, get referrals to see a specialist or pay out of pocket costs for most of your health care.
Enrolling in the FEHB Medicare Advantage option requires a second step after you make your open season election. Details about step can be found on the plan website, or you will receive a mailing once you are enrolled.
If your FEHB premiums are being deducted from your salary or your spouse’s salary because you or your spouse are currently employed, then you may want to delay enrollment in Medicare Part B until FEHB premiums are being deducted from a federal retirement benefit. Until then, Medicare is the secondary payer to FEHB.
According to the Kaiser Family Foundation, more than 28 million people are currently enrolled in Medicare Advantage plans—almost half of the eligible Medicare population. But some lawmakers are concerned that private insurers are making claims in advertising them that are too good to be true.
FEHB enrollees can choose between several Medicare options. And if it turns out you’re not satisfied with yours, remember there’s always another open season next year.