A 4-Step Guide to Solving the Medicare-FEHB Puzzle

Although health insurance open season is still five months away, if you’re retiring and older than 65, or are already retired and turning 65 this year, it’s not too early to start thinking about one of the biggest decisions you’ll face: choosing the best Federal Employees Health Benefit plan to coordinate with Medicare.

This can be a difficult decision for a number of reasons, including cost (the standard Medicare Part B premium for 2023 is $164.90 per month), your own potential resistance to changing plans and an abundance of choices. FEHB plans can’t require enrollment in Medicare Part B. You will continue to be covered regardless of your decision to enroll in Medicare.

To add to this dilemma, when you are part of a married couple in which one spouse is younger than 65 and the other is eligible for Medicare, then a decision has to be made to benefit both spouses. Fortunately, there are many federal plans that work well for retirees with and without Medicare coverage. 

Choosing the best health plan to coordinate with Medicare Parts A and B is like putting together a complex puzzle. To do it, just follow the steps to solving any puzzle.

Step 1: Eliminate the pieces that aren’t even a part of the puzzle. Use the Office of Personnel Management’s Plan Information Map to locate the plans available where you live. This is an important step for all who are eligible for FEHB, whether you are working or retired and regardless of your age. 

Step 2: Fill in the outside edges first. Eliminate the plans that you don’t want to consider. Maybe you prefer a fee-for-service plan rather than a health maintenance organization. Or maybe you like the HMO that you’ve been enrolled in, but wonder if it’s time to switch from standard to high option or value to standard. If you don’t want to change health care providers, check the plan website or contact your providers to see which networks they participate in. 

Step 3: Find the colors and patterns that match. Once you’ve narrowed your choices to five or six plans, it’s time for some comparison shopping. One way to do this is to create a chart with potential plans listed in the left hand column. Across the top row, add the following headings:

• Premium.
• Deductible for inpatient and outpatient care.
• Copayments for office visits with your primary care physician, a specialist, and labs or other medical services. Include in-network and out-of-network costs.
• Coinsurance you are responsible to pay for diagnostic and treatment services.
• Catastrophic protection limit on out of pocket expenses. Include in-network and out-of-network, along with expenses not included in the limit that may be important to you and your covered family members.
• Whether the plan waives its own deductibles, copayments and coinsurance when Medicare A and B are your primary payers.
• Availability of a health fund, health reimbursement arrangement, health savings account, or Medicare Part B reimbursement.
• Coverage for specific needs, such hearing aids, chiropractic care, and dental and vision coverage.

Step 4: Finish putting the puzzle together. Now you’re ready to make your final selection. At this point, you can get extra help from plan comparison tools such as the Consumers’ Checkbook Guide to Health Plans for Federal Employees or the OPM Plan Comparison Guide.

Retirees enrolled in Medicare A and B also have the option to try out an FEHB plan offering Medicare Advantage. These plans seem like an attractive option, but they’re new. Some of them offer additional benefits such as gym memberships, meal delivery programs and non-emergency transportation benefits. But they have different prescription drug formularies than non-advantage plans.

If you take the time to choose wisely, you could find yourself with more comprehensive coverage with an overall lower cost to carry you through your Medicare years. Remember, at 65, you may still have two, three or four decades ahead of you.