Upon reaching the age of 65, federal employees become eligible for Medicare Parts A and B. While Medicare Part A (covering inpatient hospital care) is generally premium-free for federal workers due to payroll deductions, understanding the implications of Medicare Part B (for physicians and outpatient services) is crucial, especially concerning its costs and interactions with the Federal Employees Health Benefits (FEHB) plan.
Cost Adjustments for Medicare Part B in 2024
In 2024, the Medicare Part B premium experiences an increase to $174.70, marking a $9.80 rise from the previous year’s $164.90. The annual deductible for Medicare Part B will be $240, up by $14 from the $226 in 2023. It’s essential to note that, although Medicare Part A is premium-free, there is a deductible for hospitalization and associated costs, set to increase to $1,632 in 2024—an uptick of $32 from 2023.
Income-related monthly adjustments may further affect Medicare Part B premiums for about 8% of high-income enrollees. To determine whether you fall into this category, visit the CMS.gov website for more information.
“During your working years, FEHB serves as your primary insurer, with Medicare Parts A and B acting as secondary insurance.”
Coordinating FEHB & Medicare Coverage
The coordination of FEHB and Medicare coverage varies depending on whether you are an active federal worker or a retiree. While working, FEHB serves as the primary insurer, with Medicare Parts A and B acting as secondary insurance.
Upon retirement, Medicare Parts A and B transition to become your primary insurance, while FEHB becomes the secondary insurance, akin to a Medigap plan. This shift can potentially reduce out-of-pocket costs if your FEHB plan waives copayments or deductibles for services covered by Medicare.
Understanding Exclusions of Medicare Part B
Before making any adjustments to your FEHB coverage, carefully consider the services that Medicare Part B does not cover:
1. Typically covers only 80% of approved provider services.
2. Does not include routine vision and dental care, eyeglasses, or hearing aids.
3. Excludes non-medical, long-term custodial care in a nursing home.
4. Does not cover outpatient prescription drugs.
Consulting with an FRC® trained advisor is recommended to assess your needs and determine whether enrolling in Medicare Part B at age 65 is the right choice for you. Stay informed and make decisions that align with your healthcare requirements in 2024.
