Copyright 2017, ClearLogic Financial, Inc. All rights reserved. page 1 Part B or Not Part B That Is The Medicare Question For Federal Retirees With Healthy Retirement Incomes Introduction When it comes to health insurance in retirement, federal retirees are in a very unique position. You can keep your Federal Employee Health Benefit (FEHB) plan in retirement and enroll in Medicare Part B; but as you will see, the additional Part B benefits may not be worth the added monthly premiums. For federal retirees with substantial pensions and Social Security, Medicare Part B premiums can be significant, because they are based on your income. (See the table below.) For example, the premiums for a married couple with an adjusted gross income over $170,000/year are $187.50 per month per person ($4,500/year per couple). In many cases, federal retirees may be economically better off by continuing their FEHB plan, accepting Medicare Part A, and declining Medicare Part B. This paper provides examples that illustrate why this is the case even when the retiree incurs periodic major medical costs over the retirement years. The examples consider a number of major medical episodes that people often worry about in retirement and compare the out-of-pocket expenses with and without Medicare Part B. Table A: Medicare B Premiums For 2017 (Source: www.medicare.gov) Tier Your yearly income in 2015 (for what you pay in 2017) was You each pay per month (in 2017) File individual tax return File joint tax return File married & separate tax returns 1 $85,000 or less $170,000 or less $85,000 or less $134.00 2 above $85,000 up to $107,000 above $170,000 up to $214,000 Not applicable $187.50 3 above $107,000 up to $160,000 above $214,000 up to $320,000 Not applicable $267.90 4 above $160,000 up to $214,000 above $320,000 up to $428,000 above $85,000 up to $129,000 $348.30 5 above $214,000 above $428,000 above $129,000 $428.60 Since Medicare can be confusing, let’s begin with some of the basics. Medicare consists of parts A, B, C, and D. Part A covers in-patient hospital care, and for most people, it is free. For this reason, it makes sense to carry Part A regardless of your decision on Part B. Part B covers doctors and out-patient care. Part C offers the ability to choose a private insurer instead of Medicare. However, there is usually an additional monthly premium on top on your Part B premiums, and for this reason, it is less likely to make sense for federal retirees also covered under an FEHB plan. Part D covers prescription drugs, and there is an additional monthly premium for it. For federal retirees, Part D doesn’t make sense as it is duplicative of the prescription drug coverage in their FEHB plan. Although you could opt for Part B instead of an FEHB plan, this rarely make sense, because Part B does not have an out-of-pocket maximum and does not provide coverage outside of the US. For most federal retirees, it makes sense to carry your FEHB plan and Medicare Part A. The remaining question is whether to opt for Part B. On the surface, Medicare Part B appears attractive, because you most likely will not incur any co-pays or co-insurance costs with your FEHB plan. Several FEHB plans waive deductibles, co-pays, and/or co- insurance to incentivize the insured to sign up for Part B. Notice the insurance company benefits from
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Copyright 2017, ClearLogic Financial, Inc. All rights reserved. page 1
Part B or Not Part B That Is The Medicare Question For Federal Retirees With Healthy Retirement Incomes
Introduction
When it comes to health insurance in retirement, federal retirees are in a very unique position. You can keep your Federal Employee Health Benefit (FEHB) plan in retirement and enroll in Medicare Part B; but as you will see, the additional Part B benefits may not be worth the added monthly premiums.
For federal retirees with substantial pensions and Social Security, Medicare Part B premiums can be significant, because they are based on your income. (See the table below.) For example, the premiums for a married couple with an adjusted gross income over $170,000/year are $187.50 per month per person ($4,500/year per couple).
In many cases, federal retirees may be economically better off by continuing their FEHB plan, accepting Medicare Part A, and declining Medicare Part B. This paper provides examples that illustrate why this is the case even when the retiree incurs periodic major medical costs over the retirement years. The examples consider a number of major medical episodes that people often worry about in retirement and compare the out-of-pocket expenses with and without Medicare Part B.
Table A: Medicare B Premiums For 2017 (Source: www.medicare.gov)
Tier
Your yearly income in 2015 (for what you pay in 2017) was You each pay per month (in 2017)
File individual tax return
File joint tax return
File married & separate tax returns
1 $85,000 or less $170,000 or less $85,000 or less $134.00
Since Medicare can be confusing, let’s begin with some of the basics. Medicare consists of parts A, B, C, and D. Part A covers in-patient hospital care, and for most people, it is free. For this reason, it makes sense to carry Part A regardless of your decision on Part B. Part B covers doctors and out-patient care. Part C offers the ability to choose a private insurer instead of Medicare. However, there is usually an additional monthly premium on top on your Part B premiums, and for this reason, it is less likely to make sense for federal retirees also covered under an FEHB plan. Part D covers prescription drugs, and there is an additional monthly premium for it. For federal retirees, Part D doesn’t make sense as it is duplicative of the prescription drug coverage in their FEHB plan.
Although you could opt for Part B instead of an FEHB plan, this rarely make sense, because Part B does not have an out-of-pocket maximum and does not provide coverage outside of the US. For most federal retirees, it makes sense to carry your FEHB plan and Medicare Part A. The remaining question is whether to opt for Part B.
On the surface, Medicare Part B appears attractive, because you most likely will not incur any co-pays or co-insurance costs with your FEHB plan. Several FEHB plans waive deductibles, co-pays, and/or co-insurance to incentivize the insured to sign up for Part B. Notice the insurance company benefits from
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this, because in retirement, Medicare pays first and the FEHB plan pays second. This means medical bills are primarily covered by Medicare, and the insurance company is only responsible (potentially) for what Medicare does not cover (e.g., Medicare deductibles, co-pays, and co-insurance). In other words, Medicare is on the hook for most of the cost, not the FEHB insurance company.
Even with periodic, major medical expenses often the economically better choice is to pay the out-of-pocket costs incurred when opting out of Part B (e.g., deductibles, co-pays, and co-insurance). Keep in mind the FEHB plan covers 100% of medical expenses once the annual out-of-pocket maximum is reached. The maximum depends on which plan you choose and can range from $2,250 to $7,000 for an individual and from $4,500 to $14,000 for a couple.
However, there are circumstances when carrying both Medicare Part B and your FEHB plan make sense. For example, if you have an ongoing chronic illness that requires frequent outpatient office visits with co-pays and/or co-insurances throughout the year, it may make economic sense to carry both your FEHB plan and Medicare Part B. Alternatively, your circumstances may be such that the economic savings do not outweigh the emotional peace of mind that you get from having the additional coverage.
The three examples that follow compare opting in for Medicare Part B and paying the premiums versus opting out and thus paying the expenses not covered by insurance out of pocket.
Comparison Assumptions
The underlying assumptions for these comparisons are:
Tier 2 Medicare Part B premiums apply ($2250 for an individual and $4500 for a couple per year)
Part B premiums increase 4% every 3 years*
Medical expenses increase by 6% each year*
Savings are compounded at 4% per year
The FEHB plan waives copays, co-insurance, and deductibles with Medicare Part B**
The FEHB plan deductible is $350 for a self only plan and $700 for a self-plus-one plan.
The FEHB plan co-pays (flat fees) and co-insurances (percentages of approved charges) are: o $25 for primary care office visits o $35 for specialist office visits o $350 per admission hospital for in-patient services o $350 per admission for hospital room and board o $350 per admission for other in patient costs o 15% co-insurance for out-patient procedures and diagnostics
FEHB plan covers 100% of an annual health maintenance exam
4 additional “regular” doctor visits per year are needed for illnesses or medical concerns
Out-of-pocket maximums are $5,000 for a self-plan and $10,000 for a self-plus-one plan.
* These are used in the comparisons as they favor opting for Part B.
**The illustrations are based on Medicare Part B and FEHB plan enrollment codes 104 and 106. This is not an endorsement or recommendation for FEHB plans 104 or 106. The best plan for you will depend on your individual circumstances. Actual medical costs and out-of-pocket medical expenses may vary.
Example A
Example A is about Tom, a federal retiree. Tom is an individual with significant retirement income who experiences periodic major medical needs beyond 4 doctor visits for illnesses and an annual check-up each year. Over Tom’s first 20 years of retirement, his major medical needs include:
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year 3 – double knee replacement
year 5 – horrible auto accident
year 8 – heart attack and bypass surgery
year 10 – cataract surgery for both eyes
year 13 – cancer that spreads to the lung requiring surgery and chemotherapy
year 16 – a cancer relapse requiring further surgery and chemotherapy
Appendix A presents the financial analysis for Tom. Note the bases of the medical expenses used in all of the examples in this paper for Year 1 are listed in Appendices D through J. In five of Tom’s major medical episodes over the 20 years, his out-of-pocket costs exceeded the Part B Tier 2 premiums. In one of these cases, the maximum out-of-pocket costs were reached. The graph below shows Tom’s out-of-pocket costs year by year with and without Medicare Part B.
Figure A-1: Year By Year Out-Of-Pocket Costs With Versus Without Medicare Part B For Tom
Tom experienced 2 major medical expenses over the first 5 years. One results in $2,970 in out-of-pocket expenses for the year and another in $5,000 (the out-of-pocket maximum). Nevertheless, Tom’s cumulative savings by declining Medicare Part B and paying the deductibles, co-pays, and co-insurances is $2,350. By investing the $2,350 over those years, it grows to $2,976 when compounded at 4% per year. At the end of Year 10 and two more major medical expenses, Tom’s savings is $9,629, which equals $11,828 when compounded. At the end of Year 20 and 2 more major medical expenses, his savings totals $26,163, which equals $37,547 when compounded.
Figure A-2: Year By Year Cumulative Savings Without Medicare Part B For Tom
Example B
Example B involves George and Martha a couple where one or both are federal retirees. In addition to each of them having 4 doctor visits for illnesses and an annual check-up every year, their major medical needs over their first 20 years of retirement are:
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for both o year 5 – horrible auto accident (severely injuring both George and Martha)
for Martha o year 2 – cataract surgery for both eyes o year 7 – double hip replacement o year 12 – cancer that spreads to the lung requiring surgery and chemotherapy o year 17 – a cancer relapse requiring further surgery and chemotherapy
for George o year 3 – double knee replacement o year 8 – heart attack and bypass surgery o year 10 – cataract surgery for both eyes o year 13 – cancer that spreads to the lung requiring surgery and chemotherapy o year 16 – a cancer relapse requiring further surgery and chemotherapy
Appendix B shows the financial analysis for this example. In this example, the out-of-pocket maximum is only reached once, because for the couple the out-of-pocket expenses must exceed $10,000.
Figure B-1: Year By Year Out-Of-Pocket Costs With Versus Without Medicare Part B For George And Martha
With 3 major medical expenses for George and Martha over the first 5 years that result in out-of-pocket costs of $2,262, $3,370, and one out-of-maximum of $10,000, their cumulative savings by declining Medicare Part B and paying the deductibles, co-pays, and co-insurances is $5,808, which equals $7,108, when compounded at 4% per year. With 3 major medical expenses together over the next 5 years that result in $3,765, $1,667, and $3,017 of out-of-pocket expenses, their cumulative savings grow to $20,485 and $24,880 when compounded. With 4 major medical episodes over the next 10 years that result in $2,922, $3,021, $3,355, and $3,480 of out-of-pocket expenses, the cumulative savings reach $53,527 and $76,897 in year 20 when compounded.
Figure B-2: Year By Year Cumulative Savings Without Medicare Part B For George And Martha
Part B Or Not Part B That Is The Medicare Question For Federal Retirees With Healthy Retirement Incomes
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Once again, the cumulative savings for George and Martha by opting out of Part B are significant despite experiencing frequent and significant medical events.
Example C
Example C is for Tom, another individual federal retiree. Tom has an ongoing chronic illness, one that requires numerous out-patient visits. Namely, Tom requires dialysis three times per week. The co-pays and co-insurance for the frequent visits result in out-of-pocket expenses that exceed the Medicare Part B premiums year after year.
Figure C-1: Year By Year Out-Of-Pocket Costs With Versus Without Medicare Part B For Tom
Appendix C presents the financial analysis for this example. Opting out of Part B in this case results in a loss of about $2,700 each year and a cumulative loss of $13,480 at the end of Year 5, $26,117 at the end of Year 10, $50,808 at the end of Year 20.
Figure C-2: Year By Year Cumulative Savings Without Medicare Part B For Tom
Here, electing to take Medicare Part B is clearly the better choice.
Conclusion
In most cases, carrying Medicare Part B in addition to an FEHB plan will cost more than it will save you in out-of-pocket costs. In addition, if your retirement income reaches the Medicare Part B 3rd tier or higher, the savings in examples A and B are magnified given the increased premiums for Medicare Part B. Even at Tier 1, it is apparent the potential savings merit consideration.
Additionally, you can see in the appendices that in many cases (such as the horrible automobile accident, bypass surgery, or knee replacement) the majority of major medical expenses are attributable to hospital in-patient care, not the care that would be covered under Medicare Part B. While the
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hospital in-patient costs in these examples are extremely high, they are covered by Medicare Part A and do not result in significant out-of-pocket expenses. These examples highlight the importance of having the free Part A coverage.
Lastly, it is important to note that you can change your mind and opt into Medicare Part B later. However, there is a 10% penalty for each 12 month period you were not enrolled in Part B when you could have been. Some people worry they will end up paying more in the long run due to this penalty. However, you can see in the graphs and associated appendices for Examples A and B, a penalty can be absorbed and the savings may still remain significant. Of course, any decision depends on your specific circumstances, and we at ClearLogic help our clients analyze and understand their options.
About ClearLogic Financial For Federal Employees & Retirees
ClearLogic has over 20 years of extensive experience advising clients on federal and military retirement programs and benefits. We provide all of our clients comprehensive advice in the years leading up to retirement, on the irrevocable decisions at retirement, and throughout their retirement years. We specifically help our federal employee clients clearly understand their options – so they can make sound decisions for optimal results regarding:
Saving for and transitioning into retirement Investment management TSP, FERS, and CSRS pension plan options Social Security options Tax smart distribution planning Estate planning and administration
Appendix A: Individual Federal Retiree (Tom)
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Subtotal
medical needs low low high low catastrophic low low very high low medium Years 1-10
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Totalmedical needs low low medium low low medium low low low low Years 1-20
regular doctor visits* 4 4 4 4 4 4 4 4 4 4
major medical need - - lung cancer
stage III
- - lung cancer
stage III
- - - -
medical bills** 1,075 1,139 62,076 1,280 1,357 73,934 1,524 1,616 1,713 1,815 865,970 with Medicare Part B
total out of pocket 2,531 2,531 2,531 2,531 2,531 2,531 2,531 2,531 2,531 2,531 49,192 without Medicare Part B
deductible 350 350 350 350 350 350 350 350 350 350 7,000 co-pays 50 50 520 50 50 520 50 50 50 50 6,810 co-insurance** - - 1,751 - - 2,085 - - - - 9,219 B premium - - - - - - - - - - total out of pocket 400 400 2,621 400 400 2,955 400 400 400 400 17,646 savings without Medicare Part B
savings per year 2,131 2,131 (90) 2,131 2,131 (424) 2,131 2,131 2,131 2,131 26,163 cummulative savings 11,760 13,891 13,801 15,932 18,063 17,639 19,770 21,901 24,032 26,163 compounded @ 4% 14,472 17,221 17,819 20,702 23,701 24,217 27,356 30,621 34,016 37,547 *excluding annual checkup which is covered by insurance
**assuming 6% increase every year from Year 1
***assuming 4% increase every 3 years
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Appendix B: Joint Federal Retirees (George and Martha)
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Subtotalhusband medical low low high low catastrophic low low very high low medium Years 1-10
regular doctor visits* 4 4 4 4 4 4 4 4 4 4
major medical need
- - double knee
replacement
- horrible auto
accident
- - heart attack
& bypass
- cataracts
surgery both
wife medical low medium low low catastrophic low high low low low Years 1-10
regular doctor visits* 4 4 4 4 4 4 8 4 4 4
major medical need
- cataracts
surgery both
- - horrible auto
accident
- double hip
replacement
- - -
medical bills** 3,600 13,250 89,214 4,288 751,931 4,818 111,779 238,701 5,738 21,118 1,244,437 with Medicare Part BB premium*** 4,500 4,500 4,680 4,680 4,680 4,867 4,867 4,867 5,062 5,062 47,765 total out of pocket 4,500 4,500 4,680 4,680 4,680 4,867 4,867 4,867 5,062 5,062 47,765 without Medicare Plan Bdeductible 700 700 700 700 700 700 700 700 700 700 7,000 husband: co-pays 50 50 1,440 50 3,150 50 50 240 50 240 5,370
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Totalhusband medical low low medium low low medium low low low low Years 1-20
regular doctor visits* 4 4 4 4 4 4 4 4 4 4
major medical need - - lung cancer
stage III
- - lung cancer
stage III
- - - -
wife medical low medium low low low low medium low low low Years 1-20
regular doctor visits* 4 4 4 4 4 4 4 4 4 4
major medical need - lung cancer
stage III
- - - - lung cancer
stage III
- - -
medical bills** 6,447 63,118 66,906 7,679 8,139 79,686 84,467 9,694 10,276 10,892 1,591,740 with Medicare Part Btotal out of pocket 5,062 5,062 5,062 5,062 5,062 5,062 5,062 5,062 5,062 5,062 98,384 B premium*** 5,062 5,062 5,062 5,062 5,062 5,062 5,062 5,062 5,062 5,062 98,384 without Medicare Plan Bdeductible 700 700 700 700 700 700 700 700 700 700 14,000 husband: co-pays 50 1,440 50 3,150 50 50 240 50 240 50 10,740
co-insurance** 1,272 - - 538 - 1,575 - - - - 6,769 total out of pocket 800 2,922 3,021 800 800 3,355 3,480 800 800 800 26,142 savings without Medicare Part Bsavings 4,262 2,140 2,041 4,262 4,262 1,707 1,582 4,262 4,262 4,262 53,527 cum savings 24,747 26,887 28,929 33,190 37,452 39,159 40,741 45,003 49,265 53,527 compounded @ 4% 30,216 33,605 37,028 42,850 48,905 52,600 56,315 62,908 69,765 76,897 *excluding annual checkup which is covered by insurance
**assuming 6% increase every year from Year 1
***assuming 4% increase every 3 years
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Appendix C: Individual Federal Retiree (John)
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Subtotalmedical needs very high very high very high very high very high very high very high very high very high very high Years 1-10
regular doctor visits* 4 4 4 4 4 4 4 4 4 4
major medical need dialysis dialysis dialysis dialysis dialysis dialysis dialysis dialysis dialysis dialysis
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Totalmedical needs very high very high very high very high very high very high very high very high very high very high Years 1-20
regular doctor visits* 4 4 4 4 4 4 4 4 4 4
major medical need dialysis dialysis dialysis dialysis dialysis dialysis dialysis dialysis dialysis dialysis
FEHB Plan 104 Co-Insurance for labwork and imaging 0 0 0
FEHB Plan 104 Co-pay for hospital in-patient 0 0 350
FEHB Plan 104 Co-pay for hospital room and board 0 0 350
FEHB Plan 104 Co-Pays for physical therapy 0 2,700 2,700
FEHB Plan 104 Co-Insurance for out-patient 0 1,350 1,350
FEHB Plan 104 Co-pay other hospital costs 0 0 350
Total out-of-pocket costs (detailed) 2,250 5,000 5,000
Notes / Assumptions
FEHB Plan 104 out-of-pocket maximum is $5,000 for individuals and $10,000 for couples.
FEHB Plan waives hospital in-patient, room and board, and miscellaneous copays with Medicare Part A.
Services performed by in network doctor & hospital Plan allowed charges are similar to Medicare approved charges
The 2nd tier premiums are used for Medicare Part B. Car insurance medical expense coverage is $2,500
Sources1$150/office visit. Based on Medicare approved charges for HCPCS codes 99214 & 99215.2Cleveland Clinic, https://my.clevelandclinic.org/ccf/media/files/Patients/cleveland-clinic-main-charges.pdf.
3Medicare approved charge for physical therapy. (HCPCS code 97110.) 4Anesthesia is covered by in-patient hospital coverage.5Level 5 operating room charge. 6Level 3 operating room charge.7Most laboratory charges are under $200, but a cost estimate of $200/blood draw is used for conservatism.8CT scan for abdomen and pelvis with contrast. 9X-Ray of knees or pelvis.
Disclaimer
This is not an endorsement or recommendation for FEHB plans 104 and 106. Actual medical and out of pocket expenses will vary.
The best plan for you will depend on your individual circumstances.
www.ClearLogicFinancial.com
Appendix E: Heart Attack And Cardiac Bypass Surgery - Costs And Coverages In Year 1
Cardiac Bypass Surgery (CABG) Illustration
With
Medicare A & B
Without
Medicare Part B
Without
Medicare A or B
Charges
6 Associated doctor office visits1$900 $900 $900
Average hospital charges for CABG2$150,000 $150,000 $150,000
Anesthesia $1,250 $1,250 $1,250
Surgeon's charge for CABG3$3,000 $3,000 $3,000
Total charges $155,150 $155,150 $155,150
Costs covered by insurance
Medicare Covers $152,908 $149,934 $0
FEHB Plan 104 Covers $2,242 $4,276 $153,160
Total covered by insurance $155,150 $154,210 $153,160
FEHB Plan 104 Co-Insurance for anesthesia 0 150 150
FEHB Plan 104 Co-Insurance for surgeon 0 300 300
FEHB Plan 104 Co-Insurance for out-patient 0 750 750
FEHB Plan 104 Co-pay for hospital in-patient 0 0 0
FEHB Plan 104 Co-pay for hospital room and board 0 0 0
FEHB Plan 104 Co-pay other hospital costs 0 0 0
Total out-of-pocket costs (detailed) 2,250 1,690 1,690
Assumptions
FEHB Plan 104 out-of-pocket maximum is $5,000 for individuals and $10,000 for couples.
Services are performed by an in network doctor & hospital.
Plan allowed charges are similar to Medicare approved charges.
FEHB Plan waives hospital in-patient, room and board, and miscellaneous copays with Medicare Part A.
The 2nd tier premiums are used for Medicare Part B.
Sources1$150/office visit. Based on Medicare approved charges for HCPCS codes 99214 & 99215.2Segre, Liz. "Cataract Surgery Cost." All About Vision.com, www.allaboutvision.com/conditions/cataract-surgery-cost.htm. 3Medicare approved charge for cataract surgery. (HCPCS code 66984.)4Facility charge equals average total cost minus the Medicare approved charge for the doctor.
Disclaimer
This is not an endorsement or recommendation for FEHB plans 104 and 106. Actual medical and out of pocket expenses will vary.
The best plan for you will depend on your individual circumstances.
www.ClearLogicFinancial.com
Appenndix G: Dialysis - Costs And Coverages In Year 1
Dialysis Illustration
With
Medicare A & B
With Only
Medicare Part A
Without
Medicare A or B
Charges
6 Associated doctor office visits1$900 $900 $900
Annual peritoneal dialysis (out patient)2
$75,000 $75,000 $75,000
Total charges $75,900 $75,900 $75,900
Costs covered by insurance
Medicare Covers $60,574 $0 $0
FEHB Plan 104 Covers $15,326 $70,900 $70,900
Total covered by insurance $75,900 $70,900 $70,900
FEHB Plan 104 Co-Pays for physical therapy 0 1,200 1,200
FEHB Plan 104 Co-Insurance for surgeon 0 540 540
FEHB Plan 104 Co-Insurance for anesthesia 0 0 0
FEHB Plan 104 Co-Insurance for labwork and imaging 0 570 570
FEHB Plan 104 Co-pay for hospital in-patient 0 0 700
FEHB Plan 104 Co-pay for hospital room and board 0 0 700
FEHB Plan 104 Co-Insurance for out-patient 0 0 0
FEHB Plan 104 Co-pay other hospital costs 0 0 700
Total out-of-pocket costs (detailed) 2,250 2,800 4,900
Assumptions
FEHB Plan 104 out-of-pocket maximum is $5,000 for individuals and $10,000 for couples.
Services are performed by an in network doctor & hospital.
Plan allowed charges are similar to Medicare approved charges
Pre surgery imaging and labwork costs for knee and hip repalcements are similar.
FEHB Plan waives hospital in-patient, room and board, and miscellaneous copays with Medicare Part A.
The 2nd tier premiums are used for Medicare Part B.
Sources1$150/office visit. Based on Medicare approved charges for HCPCS codes 99214 & 99215.2Greengard, Samuel. "Understanding Knee Replacement Costs: What's on the Bill?" www.healthline.com3 "A Study of Cost Variations For Knee and Hip Replacement Surgeries in the U.S." www.bcbs.com4Medicare approved charge for total knee replacement. (HCPCS Code 27130).5Hartley, Mark. "PT Protocols. What to expect in Physical Therapy (PT) After Total Joint Replacement." www.orthovirginia.com6Medicare approved charge for physical therapy. (HCPCS Code 97110.)
Disclaimer
This is not an endorsement or recommendation for FEHB plans 104 and 106. Actual medical and out of pocket expenses will vary.
The best plan for you will depend on your individual circumstances.
www.ClearLogicFinancial.com
Appendix I: Double Knee Replacement - Costs And Coverages In Year 1
Double Knee Replacement Illustration
With
Medicare A & B
Without
Medicare Part B
Without
Medicare A or B
Charges
6 Associated doctor office visits1$900 $900 $900
1st anesthesia $750 $750 $750
1st Pre-surgery lab and imaging2$1,900 $1,900 $1,900
1st hospital charges for knee replacement6 $32,000 $32,000 $32,000
1st Surgeon's charge for knee replacement3 $1,600 $1,600 $1,600
1st set of 24 Physical therapy visits4,5$1,200 $1,200 $1,200
2nd anesthesia $750 $750 $750
2nd Pre-surgery lab and imaging2$1,900 $1,900 $1,900
2nd hospital charges for knee replacement6 $32,000 $32,000 $32,000
2nd Surgeon's charge for knee replacement3 $1,600 $1,600 $1,600
2nd set of 24 Physical therapy visits4,5$1,200 $1,200 $1,200
Total charges $75,800 $75,800 $75,800
Costs covered by insurance
Medicare Covers $71,942 $63,520 $0
FEHB Plan 104 Covers $3,858 $9,540 $70,960
Total covered by insurance $75,800 $73,060 $70,960
FEHB Plan 104 Co-Pays for physical therapy 0 1,200 1,200
FEHB Plan 104 Co-Insurance for surgeon 0 480 480
FEHB Plan 104 Co-Insurance for anesthesia 0 0 0
FEHB Plan 104 Co-Insurance for labwork/imaging 0 570 570
FEHB Plan 104 Co-pay for hospital in-patient 0 0 700
FEHB Plan 104 Co-pay for hospital room & board 0 0 700
FEHB Plan 104 Co-Insurance for out-patient 0 0 0
FEHB Plan 104 Co-pay other hospital costs 0 0 700
Total out-of-pocket costs (detailed) 2,250 2,740 4,840
Assumptions
FEHB Plan 104 out-of-pocket maximum is $5,000 for individuals and $10,000 for couples.
Services are performed an by in network doctor and hospital
Hospital stay is 3 days2
Plan allowed charges are similar to Medicare approved charges
FEHB Plan waives hospital in-patient, room and board, and miscellaneous copays with Medicare Part A.
The 2nd tier premiums are used for Medicare Part B.
Sources1$150/office visit. Based on Medicare approved charges for HCPCS codes 99214 & 99215.2Greengard, Samuel. "Understanding Knee Replacement Costs: What's on the Bill?" www.healthline.com3Medicare approved charge for total knee replacement. (HCPCS Code 27447).4Hartley, Mark. "PT Protocols. What to expect in Physical Therapy (PT) After Total Joint Replacement." www.orthovirginia.com5Medicare approved charge for physical therapy. (HCPCS Code 97110.)6"A Study of Cost Variations For Knee and Hip Replacement Surgeries in the U.S." www.bcbs.com
Disclaimer
This is not an endorsement or recommendation for FEHB plans 104 and 106. Actual medical and out of pocket expenses will vary.
The best plan for you will depend on your individual circumstances.
www.ClearLogicFinancial.com
Appendix J: Lung Cancer - Costs And Coverages In Year 1
Lung Cancer Treatment Illustration
With
Medicare A & B
Without
Medicare Part B
Without
Medicare A or B
Charges
6 associated doctor office visits1$900 $900 $900
Average hospital charges for lobectomy2$21,000 $21,000 $21,000
Anesthesia $750 $750 $750
Surgeon's charge for lobectomy3$2,000 $2,000 $2,000
FEHB Plan 104 Co-pay for hospital in-patient 0 0 350
FEHB Plan 104 Co-pay for hospital room and board 0 0 350
FEHB Plan 104 Co-pay other hospital costs 0 0 350
FEHB Plan 104 Co-Insurance for out-patient 0 570 570
Total out-of-pocket costs (detailed) 2,250 1,640 2,690
Assumptions
FEHB Plan 104 out-of-pocket maximum is $5,000 for individuals and $10,000 for couples.
Services are performed by an in network doctor and hospital.
Hospital stay is 6 to 7 days.
Plan allowed charges are similar to Medicare approved charges.
FEHB Plan waives hospital in-patient, room and board, and miscellaneous copays with Medicare Part A.
The 2nd tier premiums are used for Medicare Part B.
Sources1$150/office visit. Based on Medicare approved charges for HCPCS codes 99214 & 99215.2Lacin, Tunc and Swanson, Scott. "Current Costs of Video-Assisted Thoracic Surgery (VATS) Lobectomy." Journal of Thoracic Disease , vol. 5, supplement 3, August 2013, page S191.3Medicare approved charge for single lobectomy. (HCPCS code 32480.)4Carboplatin.org, www.carboplatin.orr. Accessed April 13, 2017.5Medicare approved charge for chemotherapy infusion. (HCPCS code 96422.)
Disclaimer
This is not an endorsement or recommendation for FEHB plans 104 and 106. Actual medical and out of pocket expenses will vary.
The best plan for you will depend on your individual circumstances.
