Do I need Medicare Parts B and C if I'm a federal retiree?

Emry asked...

I am 79, retired from the federal government and have Medicare Part A. I have a government negotiated health plan and am paying circa $100.00 per month. I am in good health and have no medical condition requiring regular medication. Would it be beneficial for me to obtain Medicare Part B or C?

Expert Answer

Whether your government retiree health plan is better than Medicare Part B or a Medicare Part C Medicare Advantage health plan depends mostly on how good the terms are of your current health plan. You need to sit down and compare the coverage -- including the deductibles and copayments you must pay out of pocket -- you now have with your current health plan, against what Medicare Part B offers. Then you need to compare your current coverage against the coverage offered by Medicare Part C health plans available where you live. To find out what Medicare Part C health plans are offered in your state, you can go to the Medicare Web site's interactive tool[] to locate plans.

One thing to be aware of is the premium price you'd have to pay if you enroll now in Medicare Part B. For most people, the premium is $96.40 per month. For most people who first enroll in 2010, the premium will be $110 per month, about the same as you now pay for your federal retiree health coverage. The problem is that if you do not sign up for Medicare Part B when you're first eligible for it at age 65, you are liable for a 10 percent per year penalty if and when you do sign up. So, if you retired from the federal government at or before age 65, you would have 14 years of 10 percent-per-year of premium penalties -- a total of 140 percent -- to pay if you signed up now for Medicare Part B. That means your monthly premium for Part B would be around $265 per month ($110 plus the 140 percent penalty). That's a big jump in monthly premiums, and it's unlikely that coverage under Medicare Part B would so much better than your current coverage.

A Medicare Part C health plan might provide you with a good option if it provides better coverage than your current health plan. Medicare Part C health plans offer coverage that's as good as Medicare Part B, and sometimes even a little better. And there are often plans available for low monthly premiums. The kicker with Medicare Part C plans is that the most affordable ones usually come with HMO-like limitations on the doctors and other health care providers you're permitted to use. If your regular doctors are part of a Medicare Part C plan's network of providers, though, you could switch to that plan without having to change any of the doctors you see.