Is FEHB Still The "Best?"

[zl55lz]

I'm not sure about anyone else, but I heard many times in the past in so many words that FEHB is the gold standard of health insurance, as good as it gets.

Is that still true? Now with Part D since around 2006 and a huge variety of Medicare Advantage Plans, I have taken another look. Including Medigap Plans.

As a retiree on FEHB, I see many FEHB plans in my location which, combined with Part B, cost around $650-$1000 total per month for a Self and One situation.

I see Medigap plans in the $140 per month range and add another $10 Part D plan, and it is a total with Part B of approx $630/mo ($150+$150+$330), with many plans having zero out of pocket and better skilled nursing (SNF) days. However, I do know that apparently one cannot suspend their FEHB to go on Medigap, and I certainly would NOT cancel it.

With Medicare Advantage Plans (MA)offered to the general public, I see many options with built in Rx and zero premium, so just the Part B premiums, i.e., approx $330 total per month for a couple. They also tend to have better SNF days and lower out of pocket max than many FEHB plans. I do realize there would be additional oop costs, some years more or less, whereas with FEHB and Part B there is many times zero oop.

For example, here in my location there is a MA plan, HMO, which has our entire medical group and our hospitals in it, a $3500 oop max, better SNF days and better Rx coverage (in our situation) than one of the most popular FEHB plans which costs over $450 per month and has zero SNF days. The copays are very similar to the FEHB plan. The premium? Zero.

Of course, there are FEHB plans which give Medicare reimbursement or HRA fund, and that does defray the cost somewhat.

What else am I not seeing other than the often heard complaint of MA plans not approving some things?

 

[donheff]

I do not want an HMO so I chose GEHA, which is the same plan I had the last fifteen years working. I skipped Part B which would bury us in payments. I pay about $380/mth for two of us. With large pension income and large RMDs our situation may be significantly different than many. Most Feds do take Part B.

 

[Paulz]

I'm coming up to my retirement so this decision is still a few years out for me, but I can't wrap my head around how complicated this decision is. Like donheff, the projected IRMAA costs associated with RMDs will bury us.

 

[zl55lz]

For those who don't know, FEHB is the Federal Employees Health Benefits program for employees and annuitants.

I can see where IRMAA would change the decision.

Perhaps we were so used to paying the premiums before attaining Medicare eligibility that we forget we are still paying the same--sometimes large--premium after getting on Part B too.

However, we are still paying that full premium when the Plan is only picking up about 20% after Medicare. I think FEHB should have greatly reduced plan premiums for those on Medicare.

Sure, one can choose a lower priced FEHB plan, but often those don't cover SNF days very well or at all, or don't work well for Medicare wraparound.

Some do offer Medicare reimbursement or HRA, but one is still sometimes paying (self+one) premiums of approx $4200 to approx $6000 per year to get an approx $1800-$2400 per year reimbursement when the plan is only paying that approx 20%.

They are now offering Medicare Advantage FEHB plans which have some nice perks--but still are the full original premium (although with the reimbursement helping somewhat). I think those eligible for Medicare are being nudged in that direction? I do hope that the FEHB MA plans, for those comparatively higher premiums, are really better than public MA plans which have zero premium.

Supposedly about 70% take Part B with FEHB. My guess is that if there was not the late penalty concern of 10% per year, then I think this number might be closer to 5%, if the person knew they could get on Part B at any time (and I personally think that is how it should be).

 

[zl55lz]

I'm coming up to my retirement so this decision is still a few years out for me, but I can't wrap my head around how complicated this decision is. Like donheff, the projected IRMAA costs associated with RMDs will bury us.

IRMAA definitely puts another factor in the scenario. I looked at this and decided if I had high enough MAGI to where IRMAA went to even the second tier of $230.80 each for Part B for a couple ($461.60 total in 2023), that would be $5539.20 per year in Part B premiums, so I probably would have taken NALC High (with no Part B) for FEHB since it has at present only a max out of pocket for a couple of $5000 per year. Wouldn't make sense to me to pay more for Part B than the oop, although I suppose there could be reasons for some people.

Of course, if the IRMAA is not for long that could change the decision due to the 10% per year penalty for delaying Part B.