To (medicare) B or not to B?

[retiredunder50]

Although around a decade away, I am running through reasons whether to get Medicare B at 65, later, or never. We have good employer retiree health insurance coverage and good health (for now at least and our parents and close relatives seem to live to ripe old ages with minimal medical issues). In nearly 3 decades, our family of 5 hit the small yearly deductible limit once. I realize this can all change in a heartbeat with increasing probability as we age. My coverage does not require that I pick up B. I have surveyed fellow retirees and not one of them who has taken Medicare B has ever done the math to answer the question -> did it make financial sense to pay the Medicare B premiums in addition to contributions (if any) towards premiums for retiree coverage given your use of medical treatment. The most common answer is: 'Probably not, but it gives us peace of mind'. Perhaps later, the answer might be different if a serious illness requiring very expensive care that when multiplied by a copay percentage is still a big number. There is a reasonable catastrophic out of pocket limit on our policies; at least this provides some level of protection (for covered services). Some haven't added Medicare B coverage and think that they will sign up, and pay the 10%/year penalty, when they 'plan' to have that hip/knee/other operation (and one said he will drop it after that year and sign up again when needed) They realize that accidents, cancers and other illnesses can pop up at any time, but they are willing to roll the dice with their existing coverage and wait for the next annual Medicare B enrollment period. There were only 2 people who said that their existing insurance plan was sufficient and see no need to ever pay the extra B premiums. Aside from physicals, we very rarely see doctors. The current lowest Medicare B premium is $134/month which is $268/month total for self & spouse or $3216 total annual premium for a couple. Invested annually over x years earning y interest and one might have a decent sum to help with a bad year. On the other hand, $3K/year for peace of mind sounds pretty good too! Any thoughts would be appreciated.

 

[Golden sunsets]

Many employer plans will eliminate entirely copays(except prescriptions) and deductibles if you sign up for B and make it your primary coverage. Those savings can be significant and offset to a large degree the medicare premium. The employer has an incentive to offer this sort of a benefit to its retirees, as B becomes primary, and this their costs are less. Have you checked with your HR to see of your plan does this?

 

[Moemg]

I have federal blue cross and blue shield which is excellent insurance so I could probably skip Medicare but I do Health and Early Retirementnot . It is not only the big things that cost a lot . I am just now getting my bills from my four and a half day stay with the flu . The total is over $35,000 and since I am in rehab I expect to top $40,000 or more . I am so glad I have Medicare and Blue Cross as secondary .We are all older and crap can happen at any moment .Isn't a few thousand dollars worth peace of mind .

 

[Sunset]

OP - A good mental exercise, but you are 10 years away from the decision, and a lot of illnesses and accidents can happen in that time to force your decision.

As for your buddies who are willing to wait until the next enrollment period, that only works with planned operations, not a car accident/cancer/heart attack. What is their plan for that ?

 

[Just_Steve]

I would venture a guess that the majority of employer sponsored retire health plans require you to sign up for medicare when you become eligible then they become secondary payee.

 

[ivinsfan]

10 years, that an eon in the health insurance world. If you are looking for something to stew on I'd start worrying about how long that good employer retiree health insurance will last. If I was a gambling woman I'd say less then 10 years....

 

[MichaelB]

Instead of asking which choice is better 10 years from now, it might be a good idea to frame this question differently.

If, 10 years from now, Medicare B + D continue to be the primary insurance for people >65, and MediGap continues to be the primary supplemental insurance, what would an alternative policy look like for it to be preferable in coverage, cost, or both.

To answer this, the specific coverage elements need to be broken down and compared. Once you identify the differences in coverage, you can determine the cost of the differences, and decide if they are worth paying.

By breaking down and comparing the specifics of coverage to understand the differences, it is easier to track both over time and assess how any change impacts your preference.

 

[RAE]

I have federal blue cross and blue shield which is excellent insurance so I could probably skip Medicare but I do Health and Early Retirementnot . It is not only the big things that cost a lot . I am just now getting my bills from my four and a half day stay with the flu . The total is over $35,000 and since I am in rehab I expect to top $40,000 or more . I am so glad I have Medicare and Blue Cross as secondary .We are all older and crap can happen at any moment .Isn't a few thousand dollars worth peace of mind .

I'm not sure I understand what you are saying here. Are you saying that you believe Fed. Blue Cross would NOT have covered all of your recent medical costs? I also have Fed. Blue Cross, and so far I've been quite happy about what it has covered when I have needed it. I'm a couple years away from having to make a decision about whether to buy Medicare Part B (at age 65), but based on what I have read so far, I am inclined to not buy Medicare B, as I don't think I will really need it. But I could be wrong, so I'm trying to gather as much info. as possible before I have to make that decision.

 

[Moemg]

I'm not sure I understand what you are saying here. Are you saying that you believe Fed. Blue Cross would NOT have covered all of your recent medical costs? I also have Fed. Blue Cross, and so far I've been quite happy about what it has covered when I have needed it.

It would not have covered all my costs .I would still have been left with a huge bill. I am so glad I have Medicare as my primary but Federal Blue Cross as my secondary . Several of my friends have the same insurance and have gone through Cancer , joint replacements and other major illnesses and have owed nothing . One of my friends did opt out of Medicare and has been hit with some large bills . It is not worth the risk .

 

[davebarnes]

As an old fart, I advise you to approach this with:
1. Between now and then put as much as you can into an HSA/RSA.
2. At age 64, examine your options.

 

[retiredunder50]

First, I want to thank everybody for their ideas and suggestions; there were a lot of good ones to think about. I guess 10 years may be too early, but I have the time now to track my annual out of pocket expenses to help provide an indicator as to the direction we will take. As the kids drop off coverage, it will be easier to track. As it stands, our biggest bills are glasses/contacts and the occasional dental procedure (braces, wisdom teeth extractions,...) beyond the covered twice annual checkups. From what I hear, Part B doesn't do much of anything in these areas. Our current insurance also covers drugs fairly decently. I was a fed employee and am covered by the FEHB system that has been around since 1960 and covers well over 9 million people today. I have pretty high confidence that it is as safe as any other employer provided health insurance program. There are the occasional rumblings on the Hill about trying to decrease the employer contribution percentage, but the proposals were pretty limited in the decrease amount and they were never approved (yet). There is the basic math of out of pocket costs in terms of deductibles, co-payments, coinsurance,... vs premiums. There is also the peace of mind factor that may cost more from a financial perspective but also allows one to sleep better. If DW & I start visiting doctors' offices more often, start getting medical operations/procedures/treatments, potentially get hit by a nasty lifetime illness,... then absolutely Medicare would make sense. It's quite possible one, some, or all of those things might happen. There is also a possibility that a 'bad' year or 2 of out of pocket expenses are dampened by the premium savings and the catastrophic benefit limits. Jumping onto Medicare after 65, albeit with the penalty, is still a viable option.

 

[meierlde]

First, I want to thank everybody for their ideas and suggestions; there were a lot of good ones to think about. I guess 10 years may be too early, but I have the time now to track my annual out of pocket expenses to help provide an indicator as to the direction we will take. As the kids drop off coverage, it will be easier to track. As it stands, our biggest bills are glasses/contacts and the occasional dental procedure (braces, wisdom teeth extractions,...) beyond the covered twice annual checkups. From what I hear, Part B doesn't do much of anything in these areas. Our current insurance also covers drugs fairly decently. I was a fed employee and am covered by the FEHB system that has been around since 1960 and covers well over 9 million people today. I have pretty high confidence that it is as safe as any other employer provided health insurance program. There are the occasional rumblings on the Hill about trying to decrease the employer contribution percentage, but the proposals were pretty limited in the decrease amount and they were never approved (yet). There is the basic math of out of pocket costs in terms of deductibles, co-payments, coinsurance,... vs premiums. There is also the peace of mind factor that may cost more from a financial perspective but also allows one to sleep better. If DW & I start visiting doctors' offices more often, start getting medical operations/procedures/treatments, potentially get hit by a nasty lifetime illness,... then absolutely Medicare would make sense. It's quite possible one, some, or all of those things might happen. There is also a possibility that a 'bad' year or 2 of out of pocket expenses are dampened by the premium savings and the catastrophic benefit limits. Jumping onto Medicare after 65, albeit with the penalty, is still a viable option.

Assuming you have been paying the fica tax you get the hospital part of medicare for free. (10 years payments). I am surprised that congress has not yet mandated a switch to medicare parts a b &d Or medicare advantage at age 65 as most megacorps do (unless you are not already retired).

 

[Dreamer]

If you do not enroll in the initial enrollment period for Medicare, then you must wait until the general enrollment period, which is Jan-March 31, each year. Your Medicare would not be effective until 07/01 of that year.

I am a retired federal worker also. My DH and I both have Part B. We have FEP Blue Cross/Blue Shield. Count me in the crowd that has Medicare for peace of mind.

 

[Amethyst]

With FEHB, once you reach 65, FEHB will only pay your Dr. or Hospital what Medicare would have paid them. Thus, you must restrict your care providers to those that accept Medicare.

I still haven't figured out how taking Medicare would help, since either way, you are limited to providers that accept Medicare.

 

[ivinsfan]

With FEHB, once you reach 65, FEHB will only pay your Dr. or Hospital what Medicare would have paid them. Thus, you must restrict your care providers to those that accept Medicare.

I still haven't figured out how taking Medicare would help, since either way, you are limited to providers that accept Medicare.

So only what Medicare Part A would pay, if you haven't signed up for B is this what you mean? There is a big difference between what A pays and what B pays.

 

[Moemg]

With FEHB, once you reach 65, FEHB will only pay your Dr. or Hospital what Medicare would have paid them. Thus, you must restrict your care providers to those that accept Medicare.

I still haven't figured out how taking Medicare would help, since either way, you are limited to providers that accept Medicare.

When you have Medicare plus FEHB Medicare becomes primary and FEHB covers all the co-pays and other amounts that Medicare will not cover .This can really add up in a serious illness .IMO if you want to save some money opt for a lower FEHB plan and keep Medicare .

 

[ivinsfan]

With FEHB, once you reach 65, FEHB will only pay your Dr. or Hospital what Medicare would have paid them. Thus, you must restrict your care providers to those that accept Medicare.

I still haven't figured out how taking Medicare would help, since either way, you are limited to providers that accept Medicare.

I don't think this a much of a problem, certainly it's a much wider network then even a generous PPO..

 

[MBSC]

So only what Medicare Part A would pay, if you haven't signed up for B is this what you mean? There is a big difference between what A pays and what B pays.

Here is the link for BCBS Standard and Basic (page 145).

https://www.opm.gov/healthcare-insu...ormation/plan-codes/2018/brochures/71-005.pdf

When you are age 65 or over and do not have Medicare

Under the FEHB law, we must limit our payments for inpatient hospital care and physician care to those payments you would be entitled to if you had Medicare. Your physician and hospital must follow Medicare rules and cannot bill you for more than they could bill you if you had Medicare. Outpatient hospital care and non-physician based care are not covered by this law; regular Plan benefits apply. The following chart has more information about the limits.

If your physician: Does not participate with Medicare and is not in our Preferred network
Then you are responsible for:
Standard Option: your deductibles, coinsurance, copayments, and any balance up to 115% of the Medicare approved amount.
Basic Option: all charges.

If your physician: Opts-out of Medicare
Then you are responsible for: your deductibles, coinsurance, copayments, and any balance your physician charges.

 

[ivinsfan]

Here is the link for BCBS Standard and Basic (page 145).

https://www.opm.gov/healthcare-insu...ormation/plan-codes/2018/brochures/71-005.pdf

When you are age 65 or over and do not have Medicare

Under the FEHB law, we must limit our payments for inpatient hospital care and physician care to those payments you would be entitled to if you had Medicare. Your physician and hospital must follow Medicare rules and cannot bill you for more than they could bill you if you had Medicare. Outpatient hospital care and non-physician based care are not covered by this law; regular Plan benefits apply. The following chart has more information about the limits.

If your physician: Does not participate with Medicare and is not in our Preferred network
Then you are responsible for:
Standard Option: your deductibles, coinsurance, copayments, and any balance up to 115% of the Medicare approved amount.
Basic Option: all charges.

If your physician: Opts-out of Medicare
Then you are responsible for: your deductibles, coinsurance, copayments, and any balance your physician charges.

It's doesn't Medicare Part A or Part B not too clear.

 

[Amethyst]

Somewhere, I read that Medicare Part A (hospitalization) does not apply if you are admitted to the hospital "for observation." I guess, on admittance, you'd better not be too sick to care/ask about the difference.

 

[MBSC]

It's doesn't Medicare Part A or Part B not too clear.

Sorry, I did not quote the entire page and the subject continues on page 146. The section on inpatient hospital care is Part A. The section on physician services would be the FEHB equivalent of Part B.

Somewhere, I read that Medicare Part A (hospitalization) does not apply if you are admitted to the hospital "for observation." I guess, on admittance, you'd better not be too sick to care/ask about the difference.

Observation is an outpatient status so outpt. hospital cost sharing applies.

 

[simple girl]

Outpt PT/OT/Speech is covered under Part B. It can really add up if you have something that requires several months of visits at 2 to 3 times a week.

The older you get, the more likely you will need rehab services. Rotator cuff tears, back pain, knee replacements, etc. Don't underestimate the need.

 

[timo2]

With FEHB, once you reach 65, FEHB will only pay your Dr. or Hospital what Medicare would have paid them. Thus, you must restrict your care providers to those that accept Medicare.

I still haven't figured out how taking Medicare would help, since either way, you are limited to providers that accept Medicare.

1) You are right that the FEHB only pays what medicare would have. (This gripes a lot of people because the premiums are the same as when you were not eligible for medicare. ) Check with your FEHB company to see if the medicare deductible applies if you don't pick up medicare also.

2) Part A of medicare is free when you take it. You paid for it all these years.

3) If you do not sign up for Part B when eligible (and not working) there are penalties for each year you don't pick it up. So if you eventually pick it up, Part B will cost a lot more.

4) Many (not all..check with your FEHB company) pay your medicare deductible if you sign up for part B. So every doctor visit has no cost at all.

5) IMO Dr. Offices like it when you have FEHB as a supplemental policy to Medicare. It ensures that any medicare copays are paid in a regular fashion. I just started on Medicare Part A & B and that is what I have found.

 

[Amethyst]

We have BCBS Basic, which has no deductible, if you use preferred providers. But they will still only pay the Medicare limits on charges, once you turn 65.

Check with your FEHB company to see if the medicare deductible applies if you don't pick up medicare also.

.

 

[grayv]

We have BCBS Basic, which has no deductible, if you use preferred providers. But they will still only pay the Medicare limits on charges, once you turn 65.

with bcbs basic and medicare, don't you have to stay in the bcbs network for bcbs basic to pay anything?