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Should I keep my government insurance and Medicare Part B?

March 29, 2012: 6:00 AM ET

I am a retired federal employee. As such, I have health insurance through the Federal Employees Health Plan. Since I am over 65, I also have Medicare Part B, for which I also pay a premium. Medicare Part B is my primary and the insurance provided by the U.S. government is secondary. Which would be more advantageous: keeping both insurance plans, or dropping the Medicare Part B?
-- Allan, Knoxville, Tenn.

As a federal employee, you can opt to keep both plans or just stick with your government plan. But the cost of having double coverage is expensive. "If you're going to drop one, you should drop the Medicare Part B, because your federal coverage is probably better," says Carolyn McClanahan, a financial planner in Jacksonville, Fla.

That said, there are advantages to keeping both. Medicare Part B may cover prosthetic devices, orthopedic devices, and home health care, whereas the federal government plan may not. And if you're in poor health and use a lot of services, make sure those services are covered under your federal plan before dropping Medicare.

The other con to ditching Medicare Part B is that if you ever want to sign up for a Medicare Advantage Plan—and most seniors aren't doing that, these days—you'd need Part A and Part B, and you'd have to wait until the annual open enrollment period to sign on again. (For more on Medicare rules, check out this guide.)

But if you're healthy, and all the services you need are covered by your federal insurance, give Medicare Part B the boot and pocket those premiums instead.

--Kate Ashford

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