Do you intend to retire in 2022? Federal retirees’ reasons for enrolling (or not enrolling) in Medicare Part B

Part B of Original Medicare is the medical insurance component that covers both preventive and medically necessary physician care. Part B also covers mental health services, durable medical equipment, clinical research, lab tests, imaging, home health, and ambulance services.

Your adjusted gross income determines the premium you’ll pay for Part B. Your AGI will be taken from your tax return and will have a two-year look-back period. If you turn 65 this year (2022) and want to enroll in Part B, your AGI will determine your premium as reported on your 2020 tax return. You could apply to the Social Security Administration to use your current AGI if your AGI was higher two years ago before you or your spouse stopped working and is now lower.

If your annual income is less than $91,000 for an individual or $182,000 for a couple in 2022, you will be required to pay the base Part B premium of $170.10 per month. If your income exceeds those limits, you’ll have to pay the base Part B premium and an additional charge known as the Income Related Monthly Adjustment Amount (IRMAA). If you’re subject to IRMAA, your Part B premiums can quickly rise, reaching $578.30 per month if you’re in the highest IRMAA tier.

The initial enrollment period for Medicare is seven months long: It begins three months before your 65th birthday, continues through the month of your 65th birthday, and concludes three months after your 65th birthday. If you plan to work past 65, you can (and almost certainly should) put off enrolling in Medicare because you’ll save money on Part B premiums and be eligible for an eight-month special enrollment period once you retire.

You don’t want to switch plans since your current FEHB plan has poor Medicare coordination

When you have both Medicare and an FEHB plan, Medicare is the primary payer, while your FEHB plan is the secondary payer. If you have both components of Medicare, many FEHB plans will waive your deductibles and doctor and hospital co-pays. Because your FEHB plan provides “wraparound” Medicare coverage, you won’t have to pay out-of-pocket for doctor visits or hospitalizations in this case.

However, not all FEHB plans work well with Medicare. “We do not waive any fees if Original Medicare is your principal payor,” several FEHB plans indicate. In this case, you’ll still be responsible for out-of-pocket expenses when you visit your doctor, and having Part B won’t help you save money. In reality, your healthcare expenditures would be greater because you’d be paying a second premium and losing the opportunity to pay your FEHB premium with pre-tax cash as a retiree.

Go to Section 9 of the official FEHB plan booklet, where Medicare coordination benefits are detailed, to determine how well your current FEHB plan interacts with Medicare. In addition, Checkbook’s Guide to Health Plans includes a Medicare section where each FEHB plan is given a cost reduction score based on how well it reduces expenses if you have Part B.

There are a lot of benefits when choosing and enrolling in a Medicare package before retirement.

Contact Information:
Email: [email protected]
Phone: 8889193252