As federal employees approach retirement age, many face an important decision: how to coordinate FEHB (Federal Employees Health Benefits) with Medicare. While both FEHB and Medicare provide comprehensive healthcare coverage, understanding how they work together can help retirees maximize their benefits while minimizing out-of-pocket costs. For many federal retirees, keeping both FEHB and Medicare can offer the best of both worlds by providing extended coverage and reducing gaps in healthcare.

This guide explores the coordination of FEHB with Medicare, the benefits of having both, and how to decide if enrolling in Medicare Part B is right for you.

How FEHB Works with Medicare

Federal employees who are eligible for Medicare can choose to keep their FEHB coverage alongside Medicare. Medicare typically becomes the primary payer when enrolled in both, and FEHB acts as secondary coverage, filling in gaps left by Medicare. This coordination ensures that retirees have comprehensive healthcare coverage, with Medicare Part A and Part B covering most healthcare costs and FEHB handling the rest.

Key Points About FEHB and Medicare Coordination:

• Medicare as Primary: When you enroll in Medicare Part A and B, Medicare becomes the primary payer for your healthcare costs, and FEHB is the secondary payer.
• FEHB as Secondary: Your FEHB plan will cover costs that Medicare doesn’t fully pay, such as copayments, deductibles, and services not covered by Medicare.
• Prescription Coverage: You do not need to enroll in Medicare Part D if you have FEHB, as FEHB typically provides better prescription drug coverage than Medicare Part D.

Understanding how FEHB works with Medicare can help you take advantage of both programs while minimizing out-of-pocket costs.

Should Federal Retirees Enroll in Medicare with FEHB?

One of the most common questions federal retirees ask is whether they should enroll in Medicare Part B when they already have FEHB. While enrollment in Medicare Part A is automatic and accessible for most people at age 65, Medicare Part B requires a monthly premium. Whether to enroll in Part B depends on your health needs, financial situation, and how much you rely on FEHB for coverage.

Pros and Cons of Enrolling in Medicare Part B:

• Pros: Enrolling in Medicare Part B reduces out-of-pocket costs because Medicare will cover a large portion of your medical expenses, and FEHB will cover the remaining costs. It also reduces the amount you pay in copayments, coinsurance, and deductibles.
• Cons: Medicare Part B requires a monthly premium, which may feel unnecessary if a comprehensive FEHB plan already covers you. Some retirees choose to delay enrolling in Part B if they think that FEHB alone is sufficient for their needs.

Whether federal retirees should get Medicare with FEHB depends on personal circumstances, including healthcare needs and budget. Many choose to enroll in both for more complete coverage.

Benefits of Combining FEHB with Medicare

For many retirees, combining FEHB and Medicare provides enhanced coverage that minimizes out-of-pocket costs. By coordinating the two programs, federal retirees can ensure that most of their healthcare expenses are covered, with Medicare taking the lead and FEHB picking up additional costs.

Key Benefits of Combining FEHB and Medicare:

• Comprehensive Coverage: Medicare and FEHB together cover most healthcare services, including hospital stays, doctor visits, and preventive care. FEHB acts as a Medicare supplement, reducing costs that Medicare alone doesn’t fully cover.
• Reduced Out-of-Pocket Costs: Medicare typically pays 80% of the approved amount for covered services. FEHB pays the remaining 20%, leaving retirees with little to no out-of-pocket expenses for most services.
• Better Prescription Drug Coverage: FEHB plans often have better prescription drug coverage than Medicare Part D, so keeping your FEHB plan means you likely won’t need to enroll in a separate Medicare drug plan.

The benefits of keeping FEHB with Medicare include reduced costs, extended coverage, and a simpler approach to healthcare during retirement.

FEHB and Medicare Coverage: What’s Covered?

When you enroll in both FEHB and Medicare, your overall coverage is enhanced. Each program covers different aspects of your healthcare needs. Understanding what each program covers can help you make informed decisions about your care.

Medicare Coverage:

• Medicare Part A: Covers inpatient hospital stays, skilled nursing facility care, hospice, and some home healthcare services.
• Medicare Part B: Covers outpatient care, doctor visits, preventive services, and medically necessary services like lab tests, surgeries, and durable medical equipment.
• Medicare Part D: Provides prescription drug coverage but may not be necessary if you have FEHB.

FEHB Coverage:

• Supplementary Coverage: FEHB acts as secondary insurance, covering copayments, deductibles, and other expenses not fully paid by Medicare.
• Prescription Drugs: FEHB plans offer comprehensive prescription drug coverage, which is often more extensive than Medicare Part D.

By combining FEHB and Medicare coverage, federal retirees can ensure they have minimal out-of-pocket costs for a wide range of services.

FEHB and Medicare Part B: Should You Enroll?

The decision to enroll in Medicare Part B when you have FEHB coverage is significant, as Part B comes with a monthly premium. While Part A is free for most people, Part B requires careful consideration due to the cost.

Considerations for Enrolling in Medicare Part B:

• Health Needs: If you anticipate needing regular outpatient services or medical equipment, enrolling in Part B could significantly reduce your out-of-pocket costs.
• Premiums: Medicare Part B premiums are based on your income, so higher earners may pay more. However, even with a premium, the reduction in copays and deductibles could make it worth the cost.
• Coordination with FEHB: Many retirees find that having both FEHB and Medicare Part B provides the most complete and cost-effective coverage, as FEHB will pick up where Medicare leaves off.

Evaluating the pros and cons of Medicare Part B and FEHB benefits can help you decide whether enrolling in Part B is right for your retirement healthcare needs.

Cost Comparison: FEHB with Medicare

When comparing the costs of FEHB and Medicare, it’s essential to factor in both premiums and out-of-pocket costs. While enrolling in Medicare can reduce your healthcare costs, you must weigh that against the additional premium for Medicare Part B.

FEHB and Medicare Cost Comparison:

• Medicare Part B Premiums: The cost of Medicare Part B is based on your income and may range from around $165 per month to more than $500 for higher-income retirees.
• FEHB Premiums: You’ll continue to pay FEHB premiums, but the amount varies depending on the plan you select.
• Out-of-Pocket Costs: By coordinating FEHB and Medicare, retirees can reduce their out-of-pocket costs, including copayments, coinsurance, and deductibles, making the overall cost of healthcare more manageable.

A cost comparison between FEHB and Medicare helps retirees understand the financial benefits of keeping both coverage options.

FEHB with Medicare Enrollment: How to Coordinate Plans

When you become eligible for Medicare, it’s essential to understand how to enroll in Medicare while keeping your FEHB coverage. Coordinating these plans requires careful attention to ensure coverage is maintained.

Steps to Enroll in Medicare with FEHB:

1. Enroll in Medicare Part A: Most federal retirees should enroll in Medicare Part A when they turn 65, as it is premium-free for most people and works well with FEHB.
2. Decide on Medicare Part B: Based on your healthcare needs and budget, consider whether enrolling in Medicare Part B is worth the additional premium.
3. Keep Your FEHB Coverage: As long as you continue paying your FEHB premiums, your FEHB plan will provide secondary coverage, complementing your Medicare benefits.
4. Contact OPM or Medicare: If you have any questions about coordinating your benefits, contact OPM (Office of Personnel Management) or Medicare for assistance.

Understanding FEHB with Medicare enrollment options ensures you get the most from both programs without any gaps in coverage.

Maximizing Your Benefits with FEHB and Medicare

Combining FEHB and Medicare offers federal retirees comprehensive healthcare coverage, reduced out-of-pocket costs, and access to both programs’ extensive benefits. By coordinating the two plans, you can enjoy peace of mind knowing that your healthcare needs will be met in retirement without breaking the bank.

If you are unsure about whether to enroll in Medicare Part B or how to manage your FEHB with Medicare coverage, it’s recommended to consult with a federal retirement advisor. Advisors can help you evaluate your healthcare needs, compare costs, and guide you through enrollment to ensure you make the best decision for your retirement.