More on Medicare

In last week's column, we looked at the basics of Medicare A, B and C. This week, we'll address the military health benefit known as TRICARE for Life, which coordinates with Medicare A and B. And we'll finish up by looking at the new Medicare Part D program, covering prescription drug benefits.

TRICARE for Life

TRICARE for Life works a lot like the Federal Employees Health Benefits Program and Medicare. Uniformed military service retirees and their dependents who are eligible for Medicare can enroll in TRICARE for Life (with no premiums) along with Medicare Parts A and B. The premium for Medicare Part B is $88.50 per month in 2006, and you must be paying it to enroll in TFL.

Most out-of-pocket expenses are covered. Here are a few exceptions:

• Inpatient expenses for hospital stays in excess of 150 days. For these, you must pay $250 per day or 25 percent of institutional charges (whichever is less), plus 20 percent of professional charges if care is delivered in a TRICARE network hospital. For a non-network hospital, you pay $535 per day or 25 percent of billed charges for institutional services--whichever is less--plus 25 percent of allowable professional charges.
• For care in excess of 100 days in a skilled nursing facility, you pay 20 percent of TRICARE allowable charges if care is delivered in a TRICARE network hospital. In a non-network hospital, you pay 25 percent of TRICARE allowable charges.
• TFL does not cover chiropractic services. Medicare covers 80 percent of such charges, and you must pay a 20 percent co-payment.
• Medicare does not cover health care outside of the United States and its territories (except for some emergency care in Mexico and Canada). In these situations, TFL will cover 75 percent of inpatient care and outpatient services. There is a $150 deductible for outpatient care outside of the United States.
• TFL covers Medicare-eligible retirees, including retired National Guard members and military reservists, Medicare-eligible family members and survivors, and certain former spouses, if they were eligible for TRICARE before age 65. Beneficiaries should confirm that their Medicare status is current in the Defense Eligibility and Enrollment Reporting System by calling 800-538-9552. Beneficiaries may visit TRICARE's DEERS Web site to learn how to update their personal information.

Medicare Part D

Beginning this year, all people covered by Medicare are able to enroll in plans that cover prescription drugs. A retiree's FEHBP coverage does not change as a result of this new program, known as Part D. Plans vary, but in general, this is how they work:

• You will choose a prescription drug plan and pay a premium (currently averaging $35 a month).
• You will pay a deductible of $250.
• Medicare will pay 75 percent of drug costs between $250 and $2,250.
• You will pay 100 percent of drug costs above $2,250 until you reach $3,600 in out-of-pocket spending.
• Medicare will pay about 95 percent of costs after you have spent $3,600. Some prescription drug plans may have additional options to help you pay the out-of-pocket costs.

Some Medicare prescription plans that have premiums as low as $8 per month. A retiree who has Medicare A and B as primary insurance and who uses the GEHA or Mail Handlers standard option FEHBP plans should look at a Medicare Part D plan that serves their area. If your drug expenses are high, Medicare Part D might provide some relief.

On the other hand, many FEHBP prescription programs exceed the benefits offered by Part D. In the Blue Cross/Blue Shield standard option plan, if you use a brand-name drug that costs $200 per month, you would only pay $50 if you purchase the medication at a local pharmacy and only $35 if you purchase the drug by mail order -- and you can order a 90-day supply. There is no deductible for drugs with this plan. So there would be no additional benefit to be enrolled in a Medicare Part D plan. Under Part D, people with incomes below a certain limit don't have to pay premiums or deductibles for prescription drugs. To qualify for such help, your available resources generally must be less than $11,500 (or $23,000 if you are married and living with your spouse). Most people who qualify for the extra help will pay no premiums, no deductibles and no more than $5 for each prescription. If you qualify to be covered under this provision but do not enroll in a Medicare drug plan, Medicare will enroll you in one automatically to make sure you get this important coverage. For more information, contact the Social Security Administration at www.socialsecurity.gov or 800-772-1213.

You may sign up for Part D coverage until May 15. Because all FEHBP plans have as good or better coverage than Medicare, they are considered "creditable coverage." So, if you decide not to join a Medicare drug plan now but change your mind later, you can sign up without paying a late enrollment penalty. (This could turn out to be an important feature if the federal government reduces or eliminates drug coverage to Medicare-eligible federal retirees under FEHBP.) The next opportunity to enroll will be from Nov. 15 to Dec. 31. However, if you lose FEHBP coverage, you must join a Medicare prescription drug plan within 63 days or you will pay the monthly premium plus the late enrollment penalty.

Resources

• TRICARE for Life
• Federal Employees Health Benefits Program
• Medicare
• Local Medicare drug plans by state
• OPM Retirement Services
• OPM Health Benefits Suspension Confirmation Form
• Frequently Asked Questions about OPM's Response to TRICARE, CHAMPVA or TRICARE for Life

• If you're under 65 and don't have a disability, you don't need to do anything except follow Medicare-related issues in the news to stay aware of changes to the program.
• If you're approaching or over 65, compare your prescription drug needs with available Medicare Part D plans in your area and the coverage under your current FEHBP plan. If you are eligible for TRICARE for Life, consider suspending your FEHBP coverage to save money.