Video Transcript

Retiree health scenarios

{Voice over}

Does it really matter which health plan you choose when you retire? Let's look at three folks with different federal plans to see what their costs are. These are fictitious characters with real examples of savings, based on average FEHB plans. Meet John. He has an average FEHB plan, and decided not to enroll in original Medicare Parts A and B, after retirement. Meet Linda. She also has an average FEHB plan, but also elected to enroll in original Medicare. And meet Mary, who has original Medicare, and chose the Aetna Medicare Advantage plan, available for Federal retirees. Let's see how each of these folks fared when they use their health benefits in a variety of scenarios. Let's first explore annual out-of-pocket cost. We'll start in a year with minor health concerns. Let's see how the out-of-pocket cost differ for things like a primary care provider or PCP visit, an emergency room or ER visit, and a prescription covered monthly under the Tier 2 benefit level.

So let's look at John's out-of-pocket cost. John decided not to enroll in Medicare, so the copays and deductibles on John's plan are not waived. This means his out-of-pocket costs for these services plus his medication could be about $1,150 for the year. This $1,150 amount is calculated based on average copays. John's plan could include a PCP copay of up to $30, a shared cost or a coinsurance for an ER visit of 20% or more, and a monthly cost for the Tier 2 medication of up to 30% of the total cost.

Let's look at Linda's out-of-pocket costs. Since Linda enrolled in original Medicare, her FEHB plan waves her cost share. This leaves her with an annual out-of-pocket cost of about $900 for a medication. This amount is a calculation based on the benefits of average FEHB plans. The plan waves deductibles and coinsurance for medical services when you're enrolled in original Medicare. The monthly shared cost of the Tier 2 medication is up to 30% for the FEHB plans.

Mary enrolled in original Medicare and selected the Medicare Advantage plan through FEHB. Her cost share for medical services is $0, so her annual out-of-pocket costs is for medication only and about $120. This amount is calculated based on the FEHB's Aetna Medicare Advantage plan, which includes $0 deductibles and coinsurance. So the monthly cost of the Tier 2 medication, just $10 on the Aetna Medicare Advantage plan is the only out-of-pocket expense for Mary. And here's how out-of-pocket costs compare for a minor health concern year.

Next, we'll explore the annual out-of-pocket cost for of these retirees in a year with more major health concerns, such as a PCP visit with an average cost of about $150, an inpatient hospital stay with an average cost of about $10,000, a monthly Tier 2 drug average cost $250, and a 30-day supply of a Tier 3 drug using an average cost of about $350.

Let's look at John's out-of-pocket costs. Since John elected not to enroll in Medicare, his copays and deductibles are not waived, leaving his annual out-of-pocket costs for these services and medications at about $1,450. This amount is calculated based on its plan benefits. A PCP co-pay on an average FEHB plan can be up to $30. The shared cost for that inpatient hospital stay could be up to $1,000 or more, depending on the length of stay, and the monthly shared cost for the Tier 2 medication, which can cost up to 30% and a shared cost of a 30-day supply of Tier 3 medication, which can be up to 50% or more for many FEHB plans.

Now let's look at Linda's out-of-pocket costs. Since she elected to enroll in original Medicare Part A and B, her cost share for medical services is waived, leaving her with about $1,075 in out-of-pocket costs for medication. This amount was calculated based on the planned benefits. Deductibles and coinsurance are waived for most medical services when you have original Medicare. For Tier 2 medication, you might pay up to 30% of the cost. And for Tier 3 medication, up to 50% or more.

Finally, let's look at Mary's out-of-pocket costs. Since she elected to enroll in original Medicare, and then the Aetna Medicare Advantage plan available for Federal retirees, her cost share for medical services is $0, and leaves her with only about $160 annually in out-of-pocket costs for medication. This amount was calculated based on the Aetna Medicare advantage plan benefits, which include $0 cost share for most medical services. The monthly shared cost of the Tier 2 medication is $10, and her shared cost of a 30-day supply Tier 3 medication is a $40 copay. And here's how out-of-pocket costs compare for a more major health concern year.

Now let's look at total costs, including annual out-of-pocket expenses, premiums for the FEHBB plans, and Medicare Part B premiums. And let's see whose decisions help them save. John decided not to enroll in Medicare, and he kept the same FEHB plan that he had for many years while working. For his year of minor health concerns, his out-of-pocket annual cost was about $1,150. His annual premium for his FEHB plan Self Only was around $2,730. He elected not to enroll in Medicare Part B, so his total annual cost came to about $3,880.

Linda kept the FEHB plan that she had for many years before and after retirement. But with original Medicare, she knows her FEHB plan will waive some of her expenses and help lower her out-of-pocket costs. So looking at Linda's year of minor health concerns, her out-of-pocket medical costs were about $900. Her annual premium for her FEHB plan Self Only was about $2,730. And with the Medicare Part B monthly premium of $170.10, the annual cost was about $2,041. This brings Linda's total expenses for the year to about $5,670.

Last, but not least, is Mary. Mary decided to switch to the Aetna Medicare Advantage plan available to Federal retirees. It's a plan that was designed to reduce out-of-pocket costs and offer low premiums for federal retirees enrolled in original Medicare. Let's see how Mary's healthcare option worked out. In a year with minor health concerns, her out-of-pocket cost for medical expenses was $120. Her annual premium for the Aetna Medicare Advantage plan for Self Only was $1,500. Her monthly Medicare Premium was $170.10, or about $2,041 annually, but Mary's plan also provided a $900 credit to lower her annual Part B Premium to $1,141. Her total annual cost came to about $2,761. This shows Mary's saving about $1,117 for the year when compared to John, and $2,908 when compared to Linda in a year with minor health concerns.

Let's review how each retirees plan choice is fared in a year with major health concerns. John decided not to enroll in Medicare, and he kept the same FEHB plan into retirement. For his year of more major health concerns, his out-of-pocket annual cost was about $1,450. His annual premium for his FEHB plan Self Only was about $2,730. He elected not to enroll in Medicare Part B, so his total annual cost came to about $4,178.

Next is Linda. She kept the same FEHB plan after retiring, but enrolled in original Medicare to help lower her out-of-pocket costs. When we look at Linda's year of major health concerns, she had an out-of-pocket annual cost of about $1,075. Her annual premium for her average FEHB plan Self Only was about $2,730. Her monthly Medicare Part B Premium was $170.10, or about $2,041 annually. Linda's total annual cost came to about $5,844.

Mary switched to the Aetna Medicare Advantage plan in retirement. Her out-of-pocket annual cost was $160. Her annual Self Only Premium for the Aetna Medicare advantage plan was $1,500. Her Medicare Part B monthly premium was $170.10, or about $2,041 annually. But because her plan provides a $900 credit for Medicare Part B Premiums, her annual Medicare Premiums are reduced to $1,141. Her total annual cost came to about $2,800. This shows Mary's saving about $1,377 when compared to John, and $3,043 when compared to Linda in a year with major health concerns.

As you can see, choosing the right plan does make a difference. It may not make sense to simply stay with the same FEHBB plan you had during your working years. It's time to ask yourself some important questions, like are my monthly premiums lower because I have Medicare? Does my plan help you pay my Part B Premiums? Does my plan wave deductibles, copayments, or coinsurance? Can I visit any doctor nationwide who accepts Medicare payment? What about prescription benefits? Choosing the right health plan in retirement is an important decision, and you don't have to make it alone. We have lots of tools and information available for you in our Retiree Center. And you can get personalized help with a one-on-one consultation with an Aetna representative. Contact us today, and let us help you walk through your options.