Retirement health insurance issues

This article examines the story of Bob, a recent retiree. It looks at his pre-retirement experiences, application for the procedural retirement path, and his options for health insurance.

Given that Bob is a soldier with a service-connected disability, it may be argued that he doesn’t genuinely need Medicare or coverage under the Federal Employees Health Benefits. This implies that the Veterans Health Administration will take care of all his medical requirements, including those related to his service and those that are not. VHA submits non-service-connected treatment claims to private insurers, including those covered by FEHB.

Nevertheless, Bob joined FEHB while working for the Federal Aviation Administration to fulfill a requirement that he be a member for the five years before retiring and in case he needed it for a potential spouse, should he remarry. If he terminates his FEHB coverage now that he is retired, he will be kicked out forever. Since receiving VA medical benefits is not one of the grounds an enrollee may take this action, he is ineligible to suspend his FEHB because he has not yet retired from active duty. He is also ineligible for TRICARE.

Bob is covered by Medicare Part A because he is older than 65. But he opted out of Part B enrollment (coverage for doctors and outpatient services). 

Since FEHB doesn’t require Medicare participation to continue coverage, this won’t place him in unnecessary danger. Bob has given FEHB some thought, but he worries that Congress may not continue to finance the VA adequately in the coming years to provide for all veterans. Future health benefits for veterans who belong to one of the lowest-priority groups may be eliminated.

One option would be that Bob could sign up for Part B during a subsequent general enrollment period. Each year, they are held from January 1 to March 31, with coverage beginning on July 1. But he might be charged a late enrollment fee every 12 months that he had the option to enroll in but didn’t. 

Here is Bob’s explanation of his insurance choices:

When I first joined in 2012, I registered in FEHB with the GEHA Standard Option FEHB plan. However, I changed to the GEHA High Deductible Health Plan around four years later. My monthly premium is $136.95 at the moment. Since I am ineligible for a Health Savings Account, the HDHP comprises a Health Reimbursement Arrangement. 

Members with additional health insurance, such as Medicare, are not eligible to use the HSA; as a result, GEHA has established an HRA that does not accrue interest and is not transferable if I change plans. However, it does offer $900 a year for co-pays for medical expenses that qualify, as determined by the IRS.

I believe having access to this additional $900 per year benefit effectively lowers my monthly cost. This works because GEHA pays the portion of the payment guaranteed by the plan when the VA delivers to GEHA the amount for my care. The VA will pay the balance, so I won’t have to pay anything out of pocket for my care. Since the VA pays for my medical bills, I don’t have to worry about meeting the deductible or making copayments.

I signed up for Medicare Part A when I turned 65 because there is no monthly fee for this coverage, which assists with the expense of inpatient hospitalization. I am keeping my FEHB coverage with GEHA after I retire, but I am not enrolling in Medicare Part B. Even so, given that the VHA provides all essential medical care for free, I still wonder if I need it. Thirty percent of the government’s workforce is made up of veterans. But some of those soldiers, like me, have disabilities related to their service and are eligible for free healthcare from the VHA. I also know retired military personnel who were under the impression that TRICARE for Life is free until I informed them that they also needed to sign up for Medicare Part B. My appointments with the VHA are all unrelated to my work, with very few exceptions.

Bob’s Final Verdict

About 50% of Bob’s retirement income comes through his Social Security benefit, 20% through his federal retirement benefit, 30% from private sector pensions that don’t get a cost of living adjustment, and around 3% from the VA. He is not yet required to sell his investments.

Bob’s financial situation is excellent overall, thanks to his patience, insight, and preparedness.

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