#7 – Tricare, Medicare, Healthcare

TRICARE, Medicare and health care all on today’s Fednobabble.com.

Welcome to Fenobabble, where we make federal retirement benefits understandable for humans in less than 20 minutes, I’m Cassie Knight and I am covid Jones and we are going to take your questions that you submit or that we get from workshops and webinars and we’re going to answer them here.

So Cassie, let’s go for question number one. My spouse is retired military and covered under TRICARE. So just just in case federal employees, some federal employees don’t know TRICARE is basically FEHB for the military. So says my spouse is retired military and covered under Tricare, which typically means that the spouse is covered under Tricare as well. I don’t take FEHB should I pick it up? So this spouse is under the other spouse’s TRICARE. So they don’t they don’t right now.

They say they don’t need FEHB, but when they retire, that might change some things. That might I mean, it TRICARE is a whole nother animal and as a whole, another batch of problems, but essentially I think that it is a wise decision to have the availability for FEHB. Yeah. OK, so if you have that option, excuse me, then it might be wise to look into what can I do to make that option available for me in retirement, because TRICARE can count towards a five year rule for somebody to be able to continue FEHB in retirement.

So what this employee would need to do if they would like to have that option is pick up FEHB during the next open enrollment season. OK, and or the year before they are going to retire, OK, because you must have it in retirement or in the year that you’re going to retire. You must have that or be covered under FEHB in order to have the availability to suspend FEHB because you’re in the TRICARE system. And then that way, if TRICARE, if anything, were to happen to your TRICARE benefit or they changed your coverage or whatever, they changed the location of where you need to go to the hospital or your doctor or anything like that.

And it’s just too far away. And FEHB is just simply a better option for you. Then you can have that availability to drop TRICARE and pick up FEHB any time in that in the future in your retirement years. And so I think that’s a very wise decision for anybody who has the option just to have that availability there.

Now, there’s some other planning considerations that may need to go into effect in order for your spouse to have coverage, we’re not going to talk about that here, but really talk with somebody who understands federal benefits to make sure that you are just making the best decision for your situation.

And I will say when you talk about suspending it, I don’t want all federal employees to get excited that, oh, there’s an option to suspend it.

I can just go ahead and do that. No, that that isn’t available to everyone in all circumstances. It’s only I don’t want to say it’s only, but it looks for these for all intents purposes, under this question, it’s only available to those who have who are covered under TRICARE.

Now, there are a couple other options. But besides that, that’s very, very, very, very few.

And far there’s only two options. OK? OK, TRICARE and ChampVA. Yep. And a Medicare Advantage type plan, not a Medicare supplement, a Medicare Advantage type plan. Those are the only two reasons that anybody will have the ability to suspend FEHB. And so please do not just suspend your FEHB am because if you do not do it for the correct reason, it will cancel your FEHB and you will not be able to get it back. Yep.

That’s where again, that’s where we hear the water cooler saying what, you can do this and then they go and do it. And then there are the circumstances are different and so it kicks them out and they never get FEHB back again.

Right. And you really have to be careful and make sure that what you’re doing is the best for your situation, because I don’t know how many times when people have just done. I’m not going to say stupid things, but they say that. We’re not good for them because of somebody else’s advice, and then it put them in a position where, you know, financially it was not a good decision and the consequences for it, but at the same time, it was good for another person.

In fact, it was very good for another bank, just not them.

And they may be co-workers making the exact same amount of money, make retiring at the exact time with the same amount of years, maybe all the same, except their family situation or their health situation is different, which means a whole set, this whole set of issues that need to be looked at before we make those decisions.

Absolutely. OK, question number two, does the cost of your Medicare get deducted from your retirement or is that paid another way? This is an easy one. Yes, this is because, well, it can’t be right. OK, yes. Like everything else, it depends. Right.

And but for the most part, it’s easy for Medicare Part B does not get deducted from your retirement. Right. And it will not deduct it from your pension. You can either pay it on your own or it can be paid through your Social Security deductions. Right.

So if you know, if you’re not drawing Social Security, then obviously you have to pull it. You have to pay it out of pocket at that point because there’s no option to have it come out of your pension check.

Right, right. OK, and or is it paid another way? Oh, yeah, yeah, that’s just it. Period done. Anything more to that, I think that it’s pretty simple, no, no, if you have any other questions, I would strongly recommend getting a hold of a Medicare agent who can help you, you know, if you have any questions about your coverages or anything like that, or is there another option besides Social Security deduction or paying it myself?

They’re going to have the answers for that. But those are the two main ways to pay your Medicare. Yeah, OK. Yeah, good.

OK, question number three, once I’m retired, can I change my health care plan whenever there is an open season?

Again, another easy one. Yes, absolutely. That is about the only time you can change your health care plan with FEHB.

Yeah, yeah. In really an open season the other time you can change your health care plan when you are retired is on a qualifying life event.

So you get married, have a child, although I don’t know many children that are born during retirement, unless they’re not many, unless you’re a law enforcement officer and retired at 50, then then I could then I could see that.

But that that’s rare when that happens. Yeah.

Unfortunately, a lot of people have the misconception to that retirement is a qualifying life event for this, and that is simply not true. Good point. Retirement is not a qualifying life event for you to be able to change your health insurance options. You have to wait until open enrollment or like he was saying, marriage, divorce, know adoption or or biologically having another child will qualify for a life event. But retirement is simply not one of those cases.

Right. And I will also mention that, yes, you can change your health care plan, but you can also change your health care carrier as well. You could go from Blue Cross Blue Shield to Aetna, and you can do that every year in retirement just for the fun of it. If that sounds like fun for you, knock yourself out.

That’s true. That’s true. You will have the same availability to change those plans or options or anything regarding your FEHB health care, just like a regular employee would in retirement.

Yeah, but again, there are other questions you should be asking about your health care and Medicare and all these things. We’re going to get into some of them. But I’ll say this. We have a little bit of extra time left. And that was our third question.

But I will I do want to get into one more question that I don’t necessarily think we have to answer Cassie, but we need to throw it out to everyone to be thinking about, because this is a question that no one thinks about when it comes to their health care. And it’s the question of when will my pension check only cover my health care? Because health care premiums will go up and retirement. And at some point in your life, your health care premium will match the amount that you will get from your pension and that, you know, you have to look at that from before taxes, after taxes, before other other deductions, et cetera, et cetera.

But that’s crazy to think that at some point, if you live long enough, your pension will only cover your health care.

And that’s it, period. Yeah.

So many people don’t think about. OK, well, maybe they do think about the rising costs of health care in general, but I don’t think they realize that their pension doesn’t keep up. With the increases like their regular payment rate, and so there is a big difference on how much your pension increases as opposed to how much your pay was increasing. And the simple fact is your pension is not going to be able to keep up with the inflation cost of health care.

Yep, that’s the bottom line. And, you know, the other thing is, OK, is FEHB going to be the only health care option that I have and a retirement or am I also going to pick up Medicare as well. And am I also going to have you go TRICARE as a as an option, like all of these different factors really need to get looked at. And I think people need to make the best decisions for themselves. But that Medicare is a big question that people don’t think about.

Right. And they’re just like, oh, I have FEHB. Well, it might be a wise decision to pick up and care for the out of pocket cost. Yep, right. That’s right. What does that do to the actual cost of coverage? Because Medicare also increases. Right. Nine times out of 10 every year. And so what is that rising cost look like on a percentage basis? And is the or I should say, are the different buckets of income that I have coming in, going to keep up and counteract those costs?

Right now in the report, we’re able to show that pension amount and we’re able to show the FEHB rising costs like we do a 10 year average for those increases. And so, you know, right now it’s a four and a half percent, but the the pension only increases one and a half percent. Obviously, there’s a big difference there. And so those reports can show you those numbers and you can see, OK, when does my pension and my health care costs meet up?

Right. And meeting with a trusted financial advisor is going to be able they’re going to not only highlight that, but then strategize and figure out how do we need to make these different retirement income buckets work for you to where you know something catastrophic doesn’t kill you financially. Yeah.

And one thing now, if everyone just listen to what Cassie said, if you are in the car traveling somewhere, don’t do this. But I want you to go back and listen to this over again. And I want you to take a pen and paper and write down all the questions that we mentioned that you should ask that most federal employees don’t ask between Cassie and I. We just listed out a ton of extra questions every single federal employee should ask about their retirement, but most don’t know to ask.

And when you if you sign up for the report that Cassie will create, when you sit down with what someone in our network of trusted advisers, they’re going to help you ask those questions, or if you ask them one of those questions, they’re going to have the answer for that. And so what we really suggest is that you go to Fednobabble.com and sign up for this free report. Again, no cost, no obligation, no sales pitch. There’s no strings attached or anything like that.

You go and you get a comprehensive report that Cassie creates and it’s going to have all this extra stuff in it. And you will you can ask all these extra questions and come up with a plan. It’s incredible. So I encourage everyone to go do that. And of course, if you have a question about a question that you want us to answer, please go to Fednobabble.com as well and ask it there. And we will answer it on the show.

And if we do if we answer it, we might even send you a Fenobabble T-shirt, you lucky dog.

And also, please like and subscribe to this and follow us, share with your co-workers or any family members that you might know that are federal employees who can really use this information, whether they’re close to retirement or not. Because as we know, the sooner you start planning for that retirement, the better. That’s right. So. Go, I guess, until next time. Yes, yes, please go act on it, please go act and do something about it rather than just letting it happen to you.

OK, take care, everyone. We’ll see you next time.