You Might Be Paying More for FEHB Than You Realize—Especially If You Haven’t Reviewed Your Plan in Years

Missy E
November 14, 2025

Key Takeaways

Many retirees stick with their original FEHB plan for years, unaware that their premiums and out-of-pocket costs have increased significantly compared to other available options.
Reviewing your FEHB plan during each Open Season is essential in 2025, especially with ongoing premium increases and changes in Medicare integration rules.

FEHB Costs Are Not as Static as You Might Think

The Federal Employees Health Benefits (FEHB) Program is known for its wide range of choices and relatively strong government contributions. But many retirees mistakenly assume that their premiums and benefits remain stable year to year. That couldn’t be further from the truth in 2025.

Premiums under FEHB are increasing faster than inflation. In 2025, the average enrollee contribution has risen by more than 13%—a significant burden for retirees living on fixed incomes. These increases are not evenly spread. Some plans have raised rates modestly, while others have jumped considerably. If you haven’t checked your plan details since you retired, you might be shocked by what you’re actually paying now.

The government continues to cover about 70% of total premium costs, but because plan prices vary widely, your 30% share can look very different depending on your plan. That’s why reviewing your plan every year during Open Season—from November to December—is more important than ever.

Why Premium Increases Are Hitting Retirees Harder

While active employees also see premium increases, retirees often feel the impact more acutely. That’s because:

You’re no longer receiving cost-of-living salary increases.
Your annuity is fixed, with only modest annual COLA adjustments.
You may be paying premiums from your annuity check, reducing monthly take-home income.

In 2025, many FEHB plans have also increased deductibles, coinsurance percentages, and copayments. If you don’t take time to compare these changes, you may be stuck in a plan that now costs more but offers less.

Medicare and FEHB: The Coordination Matters

If you’re age 65 or older and enrolled in Medicare, how your FEHB plan coordinates with Medicare can significantly affect your overall out-of-pocket expenses. Some plans waive deductibles and reduce copayments if you enroll in Medicare Part B. Others offer reimbursements that help offset your Part B premium.

But not all FEHB plans are equally generous in this coordination. If you’re retired and enrolled in both Medicare and FEHB, staying in a plan that doesn’t offer enhanced coordination could be costing you money unnecessarily. Conversely, if you haven’t added Medicare Part B and your FEHB plan expects it, you could end up paying full cost for services Medicare would otherwise cover first.

In 2025, Medicare Part B costs $185 per month with an annual deductible of $257. Choosing a plan that complements these expenses instead of duplicating them can lead to real savings. But this only happens if you actively compare options.

Changes in Coverage: What to Look For

Retirees often focus on premiums but overlook other cost-sharing aspects that affect their total health spending. Here’s what else may change each year:

Deductibles: Some plans have increased their in-network deductibles by $50–$150.
Out-of-Pocket Maximums: In 2025, some plans now cap annual out-of-pocket costs at $7,500 or higher for Self Only coverage.
Copayments: Copayments for primary care, specialists, urgent care, and prescriptions have climbed in many plans.
Coinsurance: You may now pay a higher percentage of services like imaging or outpatient surgery.
Prescription Drug Tiers: Formulary changes may move your drugs to higher cost tiers without you realizing it.

If you’ve experienced rising pharmacy bills or surprise charges at appointments, your plan’s benefit structure might have shifted. These changes typically appear in the new plan brochure each fall—but you have to read it.

Open Season: Your Annual Opportunity to Save

Open Season runs from November through mid-December each year. This is your only routine opportunity to:

Change plans
Switch between Self Only, Self Plus One, and Self & Family options
Evaluate coordination with Medicare
Adjust for health changes (e.g., new chronic conditions)

Yet many retirees skip this opportunity. Why? Often, it’s due to habit or confusion. Reviewing plan brochures can be time-consuming, and comparisons can feel overwhelming. But not reviewing your plan means you could be:

Paying hundreds more annually in premiums
Missing out on newer plan options with better benefits
Overpaying for prescriptions and outpatient care

There are tools and professional services available to help. Licensed agents familiar with FEHB and Medicare can assist in comparing plans based on your specific needs and enrollment type.

Don’t Assume Your Plan Still Fits You

Health changes with time. A plan that was perfect when you were 60 may not be ideal at 70. Factors like:

New medications
Chronic disease diagnoses
Increased doctor visits or specialist referrals
Preferred pharmacy changes
Need for international coverage (if you travel)

All of these affect whether your current plan is still the most cost-effective option. Some newer plans offer enhanced services like telehealth, wellness incentives, and coordinated care networks. Others may have improved their Medicare coordination options. Unless you compare, you may not even know they’re available.

Survivor and Family Considerations

If you’re enrolled in Self Plus One or Self and Family, premium changes can be even more substantial. And if your spouse is not yet Medicare-eligible, their costs could be higher. Some plans offer better terms for mixed Medicare/non-Medicare family members.

In addition, you need to ensure your survivor benefits are correctly structured to allow continued FEHB coverage. This includes:

Electing a survivor annuity
Maintaining eligible enrollment status

Without these, your spouse or dependents could lose coverage upon your death. Annual plan reviews offer an opportunity to revisit these issues and adjust as needed.

How to Evaluate a New Plan Effectively

When comparing FEHB plans in 2025, don’t just focus on the premium. Consider these steps:

Total Cost Estimation: Add premiums, deductibles, copayments, coinsurance, and expected service use.
Medicare Integration: If enrolled in Medicare, choose a plan that reduces cost sharing.
Formulary Review: Make sure your medications are still covered affordably.
Network Access: Check if your doctors, specialists, and preferred hospitals are still in-network.
Customer Support and Reputation: A cheaper plan with poor claims processing may not be worth the savings.

Use the official plan comparison tool or speak with a licensed agent listed on this website who understands how to analyze FEHB plans in context.

Long-Term Financial Planning Considerations

Premiums are expected to continue rising in the coming years, especially as healthcare costs grow nationwide. Staying in a high-cost plan out of habit could slowly erode your retirement income. That’s why some retirees consider switching between low-cost/high-value plans every few years based on their needs.

You should also:

Monitor your annual out-of-pocket maximum to estimate total risk
Review your spouse’s FEHB and Medicare eligibility status annually
Factor in potential long-term care or catastrophic needs when choosing coverage

Good health insurance planning is a form of retirement income protection. If your FEHB plan hasn’t been reviewed in over 3 years, you may already be overpaying.

Making Smart Moves This Year Can Lead to Long-Term Savings

The best strategy for 2025 is to treat your FEHB coverage like any other financial asset—it should be evaluated, adjusted, and optimized over time. Avoid setting it on autopilot. Given the evolving cost structure and Medicare coordination options, you have much to gain by exploring your plan details.

Take a proactive role in shaping your coverage before the next Open Season. Your future financial stability—and healthcare access—depends on it.

Speak with a licensed agent listed on this website to get help reviewing your current FEHB plan and identifying better options if available. Professional guidance could uncover savings and benefits you didn’t realize were within reach.