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Thread: Should Federal Retirees Take Medicare Part B?

  1. #1

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    Default Should Federal Retirees Take Medicare Part B?

    Found this interesting, has anyone decided not to get Part B when they are eligible?

    https://www.myfederalretirement.com/...es-medicare-b/

    Still a way's off for me, but I seem to recall someone mentioning that someone never enrolled in Part B, just using FEHB, on one of the forums, but I couldn't find it in here.

    I know there is a penalty of 10% per year if you don't enroll when you are 1st eligible and the amount you pay is based on you income 2 years prior but I couldn't find anything specific on how that works in practice as they encourage everyone to sign up when 1st eligible. If your income varies from year to year, would it make sense to delay enrollment? Would it change the year that they look at to determine the premium & penalty?

    For those who are currently enrolled, does it always stay the same? Will it change in the future, like if you make a large TSP withdrawal or start getting RMDs?


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  3. #2

    Default Re: Should Federal Retirees Take Medicare Part B?

    good question. wish there would be some replies

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  5. #3

    Default Re: Should Federal Retirees Take Medicare Part B?

    Quote Originally Posted by poppa View Post
    good question. wish there would be some replies
    Hi poppa- check my thread- https://www.tsptalk.com/mb/members-a...ount-talk.html

    Discussions from #259 to #274
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

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  7. #4

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    Default Re: Should Federal Retirees Take Medicare Part B?

    Based on the original article and looking at the difference between Part A. & Part B, it seems that it doesn't make sense to sign up for Part B unless your typical out of pocket expenses for the services covered are more than the Part B Premium. Part A doesn't cost anything and it covers hospitalization. I believe most FEHB plans pick up the 20% copay not covered. by medicare (which makes sense since their cost are reduced by at least 60% for those services). I believe they also pick up other things that Medicare doesn't cover like Acupuncture & Prescriptions (They have a separate plan for that - Part D). As Maricar's thread indicates, you can get a rebate from some of the FEHB plans that may offset part of the cost.

    From original article re: IRMAA "Some of the Medicare Part B rebates will pay slightly more than the standard Part B premium, but none come close to matching the income-tested premium. Every family’s situation is unique, but for those subject to these higher premiums, the case for enrolling in Part B is far weaker under any of the four strategies."

    Another interesting article https://www.myfederalretirement.com/...medicare-work/
    Under Option 2 (which is not recommended) she makes an interesting point that Doctors often will not take patients with Medicare only. I know from personal experience with my Mother that the number of doctors available with Medicare as the Primary Insurance (she has 2 others) can be very limited for certain specialties. There are quite a few doctors that refuse to accept any Medicare patients because of low reimbursement rates and Government bureaucracy. Also note that there is a window of time to enroll in Part A - it is recommended that you sign up even if you are still working as it doesn't cost anything.

    Finally, if you choose to not enroll in Part B and are in relatively good health but you do end up with something major happening the risk is still relatively low IMO because you have Part A Hospitalization and you also have Maximum Annual Out of Pocket Cost between $5,000 to $7,000 for yourself depending on the plan. So what is the probability that you that you will exceed the cost of your Medicare premium annually? Depending on your plan and your medicare premium, we are only talking about approximately $2-$5K in potential additional cost which would be offset by the savings in years when you are in good health. Even with several major medical procedures several years ago, I didn't reach the annual maximum in my plan and if I had Part A my out of pocket would have been less.

    https://medicare.com/original-medicare/what-is-the-difference-between-medicare-part-a-part-b/


    https://eligibility.com/medicare/med...rt-a-vs-part-b

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  9. #5

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    Default Re: Should Federal Retirees Take Medicare Part B?

    Quote Originally Posted by evilanne View Post
    Found this interesting, has anyone decided not to get Part B when they are eligible?

    https://www.myfederalretirement.com/...es-medicare-b/

    Still a way's off for me, but I seem to recall someone mentioning that someone never enrolled in Part B, just using FEHB, on one of the forums, but I couldn't find it in here.

    I know there is a penalty of 10% per year if you don't enroll when you are 1st eligible and the amount you pay is based on you income 2 years prior but I couldn't find anything specific on how that works in practice as they encourage everyone to sign up when 1st eligible. If your income varies from year to year, would it make sense to delay enrollment? Would it change the year that they look at to determine the premium & penalty?

    For those who are currently enrolled, does it always stay the same? Will it change in the future, like if you make a large TSP withdrawal or start getting RMDs?
    Still a ways off for me also. As to how they calculate the premium and IRMAA increase, it is based on your AGI on tax return for two years prior: https://www.medicare.gov/your-medica...s/part-b-costs

    "If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium."

    But that is recalculated each year, so unlike the penalty which is permanent, the IRMAA will go down (or disappear) if your income from two years ago goes down below the threshold. I believe it will also go up if your AGI suddenly goes above the threshold (like due to a large TSP withdrawal?) So I don't think you can choose the year of your lowest AGI to lock in that rate but if you had an unusually high AGI two years before you turn 65, you might wait to enroll at 66 (not sure where breakeven is for permanent 10% penalty vs. one year with IRMAA). If you took $300K out of TSP to pay off the house (probably not recommended for tax purposes anyway) that would likely put you in the $475/mo premium with IRMAA so an extra $3900 that year ($325 x 12). If your income dropped the next year to below $176K then it would take 19 years (229 months) of paying the 10% penalty to equal that $3900. Of course, you would be without Part B coverage that year. Lots of math and different for everyone (including the risk tolerance of not having it). Interesting discussion.

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  11. #6

    Default Re: Should Federal Retirees Take Medicare Part B?

    Retired last year with Social Security Part A and Part B, FEHB BC/BS Standard Plan 104. To date, no co-pay with my situation no out of pocket expense(s). Pay FEHB out of annuity, pay the increases as required.
    Enjoy flexibility of BC/BS plan 104 vs the Basic less restrictions to me.

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  13. #7

    Default Re: Should Federal Retirees Take Medicare Part B?

    Quote Originally Posted by Maricar19 View Post
    Hi poppa- check my thread- https://www.tsptalk.com/mb/members-a...ount-talk.html
    Discussions from #259 to #274
    Hi poppa, here's another thread that I found that discussed Medicare B and FEHB.
    https://www.tsptalk.com/mb/retirement-talk-with-tony/33508-fehb-medicare.html
    Last edited by Maricar19; 09-19-2021 at 02:15 PM. Reason: Typo
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

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