Several previous FEDZONE columns have discussed Medicare enrollment options for federal retirees once they become eligible to enroll in Medicare at age 65. The two options for Medicare enrollment are: (1) Original Medicare and (2) Medicare Advantage (also known as Medicare Part C). The following table summarizes what Original Medicare and Medicare Advantage consist of:
| Original Medicare* | Medicare Advantage* |
| • Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance).
• Beneficiaries can join a separate drug plan to get Medicare drug coverage (Medicare Part D). • A beneficiary can use any doctor or hospital that takes Medicare, anywhere in the U.S. • Federal retirees who are eligible to keep their FEHB program health insurance in retirement can use their FEHB program health insurance as their Medicare Supplement insurance coverage. They do not have to purchase a Medicare Supplement or Medigap plan from a private insurance company. |
• Medicare Advantage is a Center for Medicare and Medicaid Services (CMS) approved plan from a private insurance company that offers an alternative to Original Medicare for a beneficiary’s medical and prescription drug coverage. These “bundled” plans include Medicare Part A, Medicare Part B and usually Medicare Part D.
• In many cases, a beneficiary can only use doctors who are in the plan’s network. • In many cases, you may need to get approval from the Medicare Advantage plan before it covers certain drugs or services. • Plans offer some extra benefits that Original Medicare does not. |
*Beneficiary” refers to a federal employee or retiree who is enrolled in either Original Medicare or in a Medicare Advantage plan.
The following tables are a comparison of cost, medical service coverage, doctor and hospital choices, and foreign travel coverage factors for Original Medicare and Medicare Advantage. Note the following assumptions are made: (1) Original Medicare: A federal retiree’s Medicare supplement plan is an FEHB program health plan; and (2) Medicare Advantage: The assumption is that a federal retiree is enrolled in an FEHB program sponsored Medicare Advantage plan (rather than a private insurance company sponsored Medicare Advantage plan).
Cost Factors for....
| Original Medicare* | Medicare Advantage* |
| FEHB Program health plan usually pays 20% of Medicare-approved amount after the beneficiary meets his or her Medicare Part B deductible for Medicare Part B-covered services. | Out-of-pocket costs vary. Medicare Advantage Plans may have different out-of-pocket costs for certain services. |
| A beneficiary pays a monthly premium for Medicare Part B. If a beneficiary joins a Medicare Part D plan, then there will be a separate premium that the beneficiary must pay. | A beneficiary pays the monthly premium for Medicare Part B and will pay 25 to 28 percent of the Medicare Advantage plan premium. Most plans include Medicare Part D drug coverage. |
| There is a yearly limit on what a beneficiary pays; namely, the FEHB program health plan catastrophic limit. | Plans have a yearly limit on what a beneficiary pays for covered Medicare Part A and Medicare Part B services, with different limits for in-network and out-of-network services. Once a beneficiary reaches the plan’s limit, the beneficiary pays nothing for covered services for the rest of the year. |
*Beneficiary” refers to a federal employee or retiree who is enrolled in either Original Medicare or in a Medicare Advantage plan.
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Medical Service Coverage Factors for....
| Original Medicare* | Medicare Advantage* |
| Original Medicare covers most medically necessary services and services in hospitals, doctor offices and other health care facilities who accepts Medicare patients. | Medicare Advantage plans must cover all medically necessary services that Original Medicare covers. For some health care services, plans may use their own coverage criteria to determine medical necessity. Plans may also offer some extra benefits that Original Medicare does not cover. |
| In most cases, a beneficiary does not need approval (prior authorization) for Original Medicare to cover a beneficiary’s services or supplies. | In many plans, a beneficiary may need to get approval (prior authorization) before the plan covers certain services or supplies. |
| A beneficiary can join a separate drug plan to get Medicare drug coverage (Medicare Part D). Federal retirees have prescription drug coverage with their FEHB program plan | Medicare Part D coverage is included with most Medicare Advantage plans. In most types of plans, beneficiaries cannot join a separate Medicare Part D plan. |
*Beneficiary” refers to a federal employee or retiree who is enrolled in either Original Medicare or in a Medicare Advantage plan.
Doctor and Hospital Coverage Factors for....
| Original Medicare* | Medicare Advantage* |
| A beneficiary can use any doctor or hospital anywhere in the US who takes Medicare.
In most cases, a beneficiary does not need a referral to use a specialist. |
In many plans a beneficiary can only use doctors and other providers who are in the plan’s network and service area for non-emergency care. Some plans offer non-emergency coverage out-of-network, but typically at a higher cost. A beneficiary may need to get a referral to use a specialist. |
*Beneficiary” refers to a federal employee or retiree who is enrolled in either Original Medicare or in a Medicare Advantage plan
Foreign Travel Coverage Factors for....
| Original Medicare* | Medicare Advantage* |
| Original Medicare generally does not cover medical care outside the US. Federal retirees enrolled in an FEHB program fee-for-service, preferred-provider organization or point-of-service health plan should check with their health plan to find out about emergency medical care overseas. Federal retirees traveling overseas are advised to look into purchasing medical travel insurance. | Medicare advantage plans generally do not cover medical care outside the U.S. Some plans may offer an extra benefit that covers emergencies and urgently needed services when traveling outside the US. Federal retirees enrolled in a Medicare Advantage plan and who travel overseas are advised to look into purchasing medical travel insurance. |
*Beneficiary” refers to a federal employee or retiree who is enrolled in either Original Medicare or in a Medicare Advantage plan.
Federal retirees who are currently enrolled in Original Medicare have until the end of the current FEHB program “open season” (December 9, 2024) to: (1) Remain in Original Medicare and to change their FEHB program Medicare supplement plan; (2) If currently enrolled in a FEHB program sponsored Medicare Advantage plan, then to either remain in that plan or to enroll in another FEHB program sponsored Medicare Advantage plan; or (3) If currently enrolled in a Medicare Advantage plan, then to disenroll from the Medicare Advantage plan and reenroll in an FEHB program health plan which is a Medicare Supplement plan. Any changes that a federal retiree makes during the current FEHB program “open season” (that is, changing to a different FEHB program health plan as the Medicare supplement plan; enrolling in a FEHB program sponsored Medicare Advantage plan; changing their current FEHB program sponsored Medicare Advantage to another FEHB program sponsored Medicare Advantage plan; or disenrolling from a current FEHB program sponsored Medicare Advantage plan and reenrolling in an FEHB program health plan as the Medicare Supplement plan) becomes effective January 1, 2025.
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Ed Zurndorfer, EA, ATA, CFP®, CLU®, ChFC®, CEBS®, ChFEBC℠: Federal Employee Benefits Expert
A former career Federal employee, Ed has published a staggering 1,200+ separate articles on Federal Benefits and Retirement!
Just “Google” his name, and you are likely to find a plethora of sites that contain his writings. Drawn to its mission to reach, teach
and serve Feds, Serving Those Who Serve is the only financial planning practice with which Ed has chosen to affiliate in over
20 years teaching. In addition to conducting Federal Benefits seminars for Serving Those Who Serve, you can find Ed’s
writings here on our blog in the FedZone, and on Fed-Soup, MyFederalRetirement, FederalNews Radio and NITP.
He is a member of the Maryland Society of Accountants, the National Association of Enrolled Agents, the International Society of Certified Employee Benefits Specialists, the Financial Planning Association, the National Association of Health Underwriters,
and the Society of Financial Service Professionals. Since 1999, Ed has taught many thousands of Federal employees about
their benefits, in person and at Federal agencies all over the country. Ed is a true national treasure.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.