Q: I am a 78-year-old federal employee and will retire at the end of this year. Medicare has been deducted from my paycheck for several years now. As I understand it, I am only eligible to benefit from Part A, which I also understand to be cost-free. As long as I am working, I cannot benefit from Part B. Why have I been charged for a plan that I cannot benefit from? I also carry federal Blue Cross/Blue Shield. After retirement, my BCBS premiums will remain the same, and I am wondering if it is advantageous to continue to pay the full premium for Medicare and be eligible for Part B. My civilian personnel office tells me that after retirement, I am responsible for 100 percent of the Medicare premiums and not just half, as it has been during my employment. If I do pick up Medicare, they will be the principal provider, with BCBS picking up the rest even though their premium is not reduced. I am very confused as to why I have been paying premiums for a non-beneficial Medicare plan all these years, and am wondering about the efficacy of continuing to have it.
A: Let me clear up some of the confusion. Everyone who receives earnings from wages or self employment pays for Medicare Part A (Hospital Insurance) regardless of their age. Once you reach age 65, you are eligible to receive Part A coverage. If you are still working, your Federal Employees Health Benefits Plan insurance remains primary and Part A is secondary. If you are no longer employed, your coverage under Part A becomes primary while your FEHB benefits insurance is secondary. Once you retire, there is no cost to you for your Part A coverage. On the other hand, the premium cost for Part B (Medical Insurance) coverage is borne entirely by those who elect to be covered by it. Employers don’t pick up a share of that cost. If you don’t elect that coverage, your FEHB insurance will be your only coverage for medical bills. Whether electing to be covered by Part B is a good idea is something you’ll have to figure out by comparing the total coverage you’d receive with it and without it. Note: By keeping the risk pool of those covered under the FEHB as broad as possible, the government has been able to keep the premiums of those who have the greatest expenses low while only increasing the premiums of the healthiest by a little. Further, it has been shown that even those who are retired and covered by both Medicare Parts A and B cost the FEHB more than those who are still in the workforce.