Got this email in response to a video I did on health insurance and Obamacre. Very interesting topic for many folks so I asked if I could share it. He said absolutely. So, if you’re a soon-to-be retiree from the Federal Government you’ll definitely want to read this.
I saw your video on Federal health care and Part B.
I am one of the Federal retirees who declined Part B of Medicare when I turned 65. I am not 72 so for the last 7 years I have not had it. I am married and would not be subject to the higher premiums. Still, while it has been a major saving for me to not have to pay the Part B premium, it was not an easy decision.
TriCare For Life And Part B
I know that military retirees with Tricare For Life (TFL) are required to subscribe to Part B. And every so often, there are rumblings that to save money, the Federal health program would be changed to require me to start Part B. Because I declined so many years ago, if I were to start Part B now there would be a huge penalty of 10% per year for every year I did not take Part B.
I confess when I made the decision, there was very little guidance on whether to take Part B or not. But I could not see the logic of why my perfectly good health plan that I had the day before I turned 65 would become inadequate the day after I turned 65. The costs and benefits were unchanged. So I decided to not take Part B knowing if I made some terrible mistake I could sign up the following year with only a 10% bump to the premium. Meanwhile, I would save 100% of the premium for one year so it would take 10 years before I was in the red.
So Why Do So Many Federal Retirees Sign Up For Part B?
I have a friend who is single and does ‘qualify’ for IRMA. He takes Part B as a security blanket. He knows that the Fed plans coordinate with Medicare so he is 100% covered for everything. He never pays a copay. He also is secure knowing that if the regulations change requiring Fed retirees to take Part B, he is covered. This guy is very healthy and I’m sure his security blanket is costing him heavily. But he’s single, feels he’s got plenty of money so it’s just a luxury tax he pays.
Federal Health Plans Have Changed
Since I retired the Federal health plans have changed to make it more favorable to carry Part B. They do things similar to the Medicare supplement plans by offering more ancillary (vision/dental/gym etc) and even rebating part of the Part B premium. This makes the decision a little more complicated.
Finally, up till now, this has been my little secret. I’m not on a campaign to promote Feds from taking Part B. Because I know if every FED did what I did, the Government would move to recover these (lost) Part B premiums.