Looking for a Medicare Advantage

The number one question I get from federal employees and retirees is what to do about Medicare and the Federal Employees Health Benefits Program at age 65 (or at retirement for those who carry their health insurance as a federal employee after they turn 65). I can generally provide assistance on this question and have conducted webinars dedicated to this one issue many times in the past.

But now one facet of this decision is becoming more complicated: the option to use a Medicare Advantage plan, otherwise known as Medicare Part C. This week, I want to write about a relatively new type of FEHBP enrollment that combines Medicare Advantage benefits with FEHBP coverage. To be honest, I am not 100% confident in all of the ins and outs of this coverage, but I know much more now than I did before the start of this year’s open season.

Before I tell you about the MA plans available through FEHBP, let’s start with Medicare Part C MA plans. 

About 30 percent of all non-federal Medicare beneficiaries use an MA plan instead of traditional Medicare Parts A and B with a Medicare supplement. The reasons include the following:

• Many MA plans offer $0 premiums.
• MA plans will provide all of your Part A (hospital insurance) and Part B (medical insurance) coverage. 
• MA plans may offer extra coverage, such as vision, hearing, dental, and health and wellness programs. 
• Most MA plans include Medicare prescription drug coverage (Part D).

When it comes to Part C, I generally would not recommend that most federal retirees select MA from the options available at Medicare.gov, because this would involve suspending your enrollment in FEHBP and using Medicare Part C only. If you are an annuitant or former spouse, you can suspend your FEHBP coverage to enroll in an MA plan, eliminating your FEHBP premium. (OPM does not contribute to your Medicare Part C MA plan premium.) If you later want to re-enroll in FEHBP, generally you can do so only at the next open season, unless you involuntarily lose coverage or move out of an MA plan’s service area.

Here are some of the arguments against Medicare Part C MA plans:

• “The best candidate for Medicare Advantage is someone who's healthy," says Mary Ashkar, senior attorney at the Center for Medicare Advocacy. "We see trouble when someone gets sick." The center has published some stories about MA plan coverage issues at Voices of Medicare.
• MA plans are less transparent and more complex, according to medical providers. Pre-authorization requirements vary, so providers must call before any treatment or service can be recommended or started.
• Each Medicare Part C MA plan can charge different out-of-pocket costs. They also have different rules for how you get services, such as whether you need a referral to see a specialist or if you have to go to doctors, facilities and suppliers that belong to the plan for non-emergency or non-urgent care. These rules can change each year.
• In many cases, you’ll need to use doctors and other providers who are in the plan’s network and service area for the lowest costs. Some plans won’t cover services from providers outside the plan’s network and service area.
• Since MA plans can’t pick their customers (they must accept any Medicare-eligible participants), they discourage people who are sick by the way they structure their copays and deductibles. Medicare Advantage policies often come with much higher deductibles and out-of-pocket costs.

For these reasons, most federal retirees choose to remain covered by a traditional FEHBP plan and enroll in Medicare A and B as their primary coverage. In most of the national fee-for-service plans and in many of the regional plans, this provides close to 100% coverage for both inpatient and outpatient care. Generally Medicare pays first and the FEHBP plan will pay the remaining portion, waiving their own deductibles, copays and coinsurance leaving you with generally $0 out of pocket cost (other than prescriptions, dental and vision expenses).

An increasing number of FEHBP plans also offer a Medicare reimbursement amount to help offset the cost of adding Part B. (Part A has no premium for federal retirees who have paid the Medicare payroll tax throughout their federal careers. This also provides premium-free Part A coverage to spouses as well.

But this year, FEHBP has added new options with built-in Medicare Advantage plans. These include:

• Aetna Medicare Advantage
• Kaiser Permanente Medicare Advantage
• UnitedHealthcare Medicare Advantage Value Plan

Check Section 9 of your FEHBP plan brochure for additional plans that offer an MA option.

I recently had the opportunity to discuss these types of plans on the For Your Benefit radio show. Susan Allgood, relationship manager for Aetna Federal Plans, noted the company’s MA plan is a preferred provider organization, so participants have coverage under the plan even if the provider they see is not in Aetna’s network —as long as the provider accepts Medicare. 

And here’s a story I was told by an enrollee in a UnitedHealthCare MA plan: “All medical costs are covered at 100%, no copay! You must enroll in Medicare Part B to be eligible (like other Medicare Advantage plans). But they pay 95% of our Part B premium, which is about $135 per month—directly to Social Security.” He summed up the plan as “amazing.”

If you have an experience that you would like to share with FEHBP Medicare Advantage plans, please post in the comment area below or contact me at retirefederal.com.