Expert's View

Over the last three weeks, I’ve described the origin of the Federal Employee Health Benefits program, focused on how premiums are set, explored how the eligibility to participate has evolved over the last half century, and how the FEHB program and Medicare have evolved to become a big part of most seniors’ health benefits package, with a focus on Medicare Part A. This time I want to explore Medicare Part B.

While Medicare Part A covers hospital insurance-covered services, Medicare Part B covers medical insurance-covered services. Among these are doctor’s services, outpatient medical and surgical supplies, and clinical laboratory services. As with Part A and your FEHB plan, there are both overlaps and differences that can best be understood by comparing the two benefits packages.

Unlike Medicare Part A, which most of you paid for through payroll taxes, if you decide to enroll in Part B, you’ll have to pay the premiums. And those premiums are nothing to sneeze at. Here’s what they look like based on your previous year’s modified adjusted gross income:

Individual Joint Monthly Premium

$85,000 or less $170,000 or less $104.90

$85,001 to $107,000 $170,001 to $214,000 $146.90

$107,001 to $160,000 $214,001 to $320,000 $209.90

$160,001 to $214,000 $320,001 to $428,000 $272.70

Above $214,000 Above $428,000 $335.70

Clearly we’re not talking about loose change here. The cost of Part B is substantial. And if you fail to enroll during the initial enrollment period and later change your mind, you will be subject to a permanent 10 percent penalty for each year you could have enrolled and didn’t.

Clearly, comparing the benefits available through your FEHB plan and Medicare Part B is essential before making up your mind whether to pay for Part B. That’s critical because no two FEHB plans or options offer exactly the same coverage or benefit levels. And when you make that comparison, you should consider not only what your current medical needs are and those you might reasonably expect to experience (or that you dread facing) in the future.

If you do enroll in Medicare Part B, Medicare participating providers may not collect from you or your plan more than the total Medicare payment under the Medicare participating physician fee schedule. And non-participating physicians can’t collect more than the Medicare limiting charge amount. However, they can balance bill you up to 15 percent of the fee schedule amount.

If you don’t enroll in Medicare Part B, the amount you’ll be responsible for is the lower of the Part B payment or the actual billed charge; however, that payment is then reduced by any FEHB plan deductible, coinsurance, or copayment for which you are responsible.

Whether or not you enroll in Medicare Part B is strictly up to you. Many who are eligible to do that have, but many others haven’t. Although Part B is often thought to be essential for those who don’t enjoy the benefits of the Federal Employees Health Benefits program, those of you who are covered by it may feel there is less need to do that. While the out-of-pocket expenses of those covered by an FEHB plan and Medicare Parts A and B are next to nothing (always excepting prescription drugs, unless you are paying into the separate Medicare Part D prescription drug program), there is a price to be paid for enrolling in Part B. Do your homework, make a decision, and keep your fingers crossed that it is the right one.