Key Takeaways
- When you turn 65, Medicare and your Federal Employee Health Benefits (FEHB) can work together to provide comprehensive healthcare coverage.
- It’s important to understand how Medicare interacts with your FEHB so you can maximize benefits and minimize out-of-pocket costs.
You’re Turning 65 – What’s Next?
If you’re approaching 65 and work or have retired from federal service, it’s natural to wonder how Medicare will fit in with your Federal Employee Health Benefits (FEHB). Navigating the world of health coverage can feel overwhelming, but the good news is that federal employees and retirees have one of the best health benefit programs available. And when you add Medicare to the mix, things can actually get better – if you know how to play it right.
- Also Read: The Best FEHB Plans for 2025: Which One Fits Your Lifestyle and Budget the Best?
- Also Read: Special Retirement Options for FAA and LEO Employees: Are You Taking Advantage of What’s Available?
- Also Read: Federal Employee Benefits You Didn’t Know Could Give Your Wallet a Serious Boost in Retirement
What Happens to Your FEHB at Age 65?
First off, you don’t lose your FEHB coverage when you turn 65. That’s important to know! As long as you meet the eligibility requirements (five years of continuous coverage before retiring), you’ll continue to enjoy your FEHB benefits, even after Medicare kicks in.
Medicare and FEHB actually complement each other quite well. Think of it this way: Medicare helps reduce some of the costs you might face under FEHB alone. If you enroll in both, Medicare usually becomes your primary payer, and FEHB steps in as secondary coverage. This combination can result in fewer out-of-pocket expenses, better overall coverage, and even more choices for healthcare providers.
Do You Have to Enroll in Medicare at 65?
The short answer? No, but you might want to.
Federal retirees are not required to enroll in Medicare when they turn 65, but most people choose to sign up for at least Medicare Part A because it’s free if you or your spouse paid Medicare taxes during your working years. Medicare Part B, which covers outpatient care and doctors’ services, comes with a premium. You’ll want to weigh the benefits of enrolling in Part B, especially since FEHB can still provide solid coverage even without it.
That said, enrolling in Medicare Part B can significantly reduce your out-of-pocket expenses by taking advantage of Medicare’s lower cost-sharing. You might have lower deductibles and co-pays with Medicare as your primary insurer, and your FEHB plan can fill in the gaps that Medicare doesn’t cover.
Medicare Parts A, B, and D – What’s the Difference?
Before we go any further, let’s break down Medicare’s different parts and how each interacts with your FEHB coverage:
- Medicare Part A: Covers hospital stays, skilled nursing facilities, and some home healthcare. As mentioned, it’s premium-free if you or your spouse worked and paid Medicare taxes.
- Medicare Part B: Covers outpatient care, doctors’ visits, and preventive services. It does come with a monthly premium, so you’ll need to decide whether the extra cost is worth it.
- Medicare Part D: Offers prescription drug coverage, but you won’t need this if you keep your FEHB plan. FEHB plans typically provide better prescription drug coverage than Medicare Part D.
Together, Medicare Parts A and B (also called “Original Medicare”) cover many healthcare services, but there are still gaps – such as coinsurance, copayments, and deductibles – that your FEHB plan can help cover.
The Benefits of Enrolling in Both Medicare and FEHB
If you choose to enroll in both Medicare and FEHB, here’s where the magic happens. Medicare will pay first (as the primary payer), and then FEHB will step in as your secondary payer. This can mean fewer out-of-pocket costs for you, as FEHB will often cover what Medicare does not.
For example, if Medicare pays 80% of a doctor’s visit, your FEHB plan can cover the remaining 20%, meaning no copays or coinsurance for you. Additionally, Medicare generally doesn’t include vision or dental coverage, but your FEHB plan likely does. This combination can help you avoid gaps in coverage and lower your overall healthcare expenses.
What If You’re Still Working at 65?
If you’re still employed by the federal government when you turn 65, you’re not required to sign up for Medicare right away. Your FEHB plan will continue to be your primary insurance. You can delay enrolling in Medicare Part B without facing a late enrollment penalty, as long as you’re still covered under FEHB through your job.
Once you retire, you’ll have a Special Enrollment Period to sign up for Medicare Part B without penalty. During this time, it’s important to reassess your healthcare needs and decide if enrolling in Medicare will benefit you.
Retired and Confused? Here’s a Quick Recap:
For retired federal employees, here’s what you need to know:
- Keep Your FEHB Coverage: You don’t lose it when you turn 65, and it can serve as excellent secondary insurance if you decide to enroll in Medicare.
- Enroll in Medicare Part A: It’s free for most, so there’s little reason not to sign up.
- Consider Medicare Part B: While there’s a premium, enrolling in Part B can reduce out-of-pocket costs and may be worth the investment, especially when paired with FEHB.
- No Need for Medicare Part D: Your FEHB plan’s prescription drug coverage is likely more robust, so there’s no need to pay for Part D.
Timing Is Everything: Key Dates to Keep in Mind
To avoid late enrollment penalties, it’s important to understand the key timelines for Medicare enrollment. When you’re approaching 65, you have a seven-month window to enroll in Medicare. This window starts three months before your 65th birthday and ends three months after the month you turn 65.
If you’re still working at 65, you can delay enrolling in Medicare Part B without a penalty. You’ll have eight months after you retire to sign up for Part B during a Special Enrollment Period.
So, Should You Enroll in Medicare or Not?
Ultimately, the decision to enroll in Medicare is personal and depends on your healthcare needs, budget, and lifestyle. If you have chronic health conditions or anticipate needing more medical care as you age, enrolling in Medicare Part B could be a smart move. For others, staying on FEHB alone might make sense, especially if you’re comfortable with the coverage and costs.
Just keep in mind that enrolling in both FEHB and Medicare can offer significant savings on out-of-pocket costs and broaden your provider options. Many federal retirees find that the two programs together provide excellent health coverage, ensuring peace of mind during their retirement years.
Making the Most of Your Health Coverage
As you approach this milestone, take the time to review your healthcare options. Whether you stick with FEHB alone or choose to combine it with Medicare, having a clear understanding of how the two work together will help you make the best decision for your health and financial future.
Remember, your health coverage is a key part of your retirement plan. With the right choices, you can protect your health while keeping your costs manageable.
