Feds can benefit from having both FEHB and Medicare coverage in retirement. To find out if this coverage is right for you, get the facts.
Costs Associated With Medicare
Medicare Part A (inpatient hospital coverage) is premium–free because you’ve paid for it through payroll taxes, but there is a yearly deductible. In 2024, the Part A deductible is $1,632. Those who opt for Medicare Part B (outpatient medical care) will pay a monthly premium and a yearly deductible. In 2024, the monthly Medicare Part B premium is $174.70 and the annual deductible is $240.
Benefits of FEHB and Medicare
Having both FEHB and Medicare in retirement unlocks a combination of benefits that can help decrease some out-of-pocket costs. Depending on your plan, copayments and deductibles for services covered by Medicare Part B may be waived.
Those enrolled in an FEHB HMO, can go outside of their HMO network for Medicare Part B services and receive reimbursement. Some services covered by Medicare Part B are not covered (or only partially covered) by your federal plan, so having both plans may provide additional coverage.
No Need For Medigap Insurance
If you’re a federal employee eligible to keep your FEHB coverage in retirement, you don’t need to purchase Medigap or Medicare Supplemental Insurance. In fact, when you coordinate FEHB with Medicare during retirement, Medicare becomes your primary coverage, while FEHB acts as secondary insurance. Additionally, once you’re enrolled in Medicare Part B, you can switch to a lower-cost FEHB plan to reduce your premium expenses.
FEHB Covers Prescription Drugs
Traditional Medicare Parts A and B do not cover prescription drugs, so in order to get prescription coverage through Medicare you have to enroll in Medicare Part D. However, you’ll have prescription drug coverage through FEHB when you coordinate it with Medicare Parts A and B.
FEHB Cost Share Continues Into Retirement
If you qualify to continue FEHB in retirement, your premiums will remain the same as when you were working and the government will continue to pay 72% to 75% of your premium at the same cost-share rate. Note that premiums will be deducted post-tax from your monthly annuity (pension).
For more information, visit the OPM website. To get expert help navigating the complex world of federal benefits, reach out to a specially trained FRC® advisor.
