The following is a question submitted by a Federal Times reader to columnist Kevin Moss, a senior editor at Consumers’ Checkbook and expert on federal employee health insurance plans for civil servants, retirees and their families.

The question and response have been edited for clarity and confidentiality.

A Fed Times reader asks:

“I will be in a high IRMAA category for the next few years. Are there significant costs that Medicare Advantage plus VA covers that is significantly better than FEHB plus VA coverage?

The only thing I could think of is perhaps outpatient chemo or an uncovered surgery, but I guess the catastrophic coverage would limit that advantage.

Because I was unsure, I signed up for Medicare B and took Medicare Advantage before facing the 10% penalty per year. Compass Rose is reducing the premium by about I think $120 a month. As a result, my IRMAA this year is about $132 per month, but I think that will go up next year by about $1,000 a year.”

Kevin’s response:

With the MA plan offered by Compass Rose, you are receiving $125/month in Part B premium reduction and you pay $0 for all other covered medical services, besides prescription drugs.

However, you must use providers that accept both Medicare and the MA plan. The maximum out-of-pocket is effectively $0 in this MA plan, besides prescription drugs.

This MA plan bundles a Medicare Part D prescription drug plan. Next year the maximum out-of-pocket for prescription drugs will be $2,000 per person in all Part D plans. When you have CHAMPVA and FEHB, your FEHB plan is primary and CHAMPVA is secondary. How that works is that CHAMPVA will pay the lesser of either 75% of the allowable amount after the $50 annual deductible is satisfied, or the remainder of the charges. The result is that having both CHAMPVA and an FEHB plan will reduce your out-of-pocket costs.

If you expect to be subject to IRMAA in the future, you may want to consider dropping Part B. This will disqualify you for MA plans, but you can use the combination of FEHB and CHAMPVA coverage to help reduce out-of-pocket healthcare costs. Also, you’ll still be eligible to enroll in Part D prescription drug coverage by retaining Medicare Part A.

Have a question about your FEHB plan or the federal insurance marketplace? Send your query to benefitsexpert@federaltimes.com

Kevin Moss works for Consumers' Checkbook, a nonprofit dedicated to helping consumers make informed decisions. He leads the production of Checkbook's Guide to Health Plans for Federal Employees, a decision support tool that helps federal employees and annuitants find the FEHB plan that's the best fit.

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