Around 8.2 million people receive Federal Employees Health Benefits (FEHB).1
Because federal workers can continue receiving these benefits after they retire, many older adults with FEHB may wonder if they should still enroll in Medicare.
In this article, we look at how each type of Medicare insurance can work with FEHB. We explore some of the advantages and disadvantages of enrolling in Medicare for someone who is at least 65 years old and has FEHB coverage.
If you are eligible for premium-free Medicare Part A, there is no reason not to take advantage of it, even if you receive FEHB. Most people receive Medicare Part A without paying a monthly premium.
Part A will serve as your primary health insurance coverage for covered inpatient care and certain home care services, and FEHB will be the secondary payer. There is coordination of benefits between Medicare and FEHB, so the FEHB policy acts as supplemental coverage to Medicare Part A.
If you wish to enroll in other types of Medicare coverage such as Medicare Advantage, Medicare Part D or Medigap, you will need to be enrolled in Part A.
Medicare Part B is optional medical insurance coverage, and it comes with a standard premium of $144.60 per month in 2020. If you are entitled to FEHB and Medicare benefits, Medicare Part B would serve as the primary payer and FEHB would act as the secondary insurance payer.
Your decision to enroll in Part B may depend on the benefits offered in your FEHB policy. Some of the things to consider include:
Medicare Advantage plans provide all of the same basic benefits as Medicare Part A and Part B, and most plans also cover prescription drugs, which Original Medicare doesn’t cover. Many Medicare Advantage plans may also offer routine dental, vision and hearing coverage.
These plans come with a monthly premium (although some plans may feature $0 premiums), and you must maintain Part B enrollment to be eligible for a Medicare Advantage plan.
If you have both a Medicare Advantage plan and FEHB, Medicare Advantage would serve as the primary payer and would then be supplemented by FEHB.
Some things to consider before enrolling in a Medicare Advantage plan:
Medicare Part D plans provide coverage exclusively for prescription drugs.
Many FEHB policies also include drug coverage, so your decision whether to enroll in a Part D plan may involve comparing your FEHB drug coverage against that of any Part D plans available in your area.
Medicare Supplement Insurance, or Medigap, provides coverage for many of the out-of-pocket expenses that Original Medicare doesn’t cover, such as deductibles and copays. Medigap plans and Medicare Advantage plans are very different, and you cannot have both types of policies at the same time.
Generally, it would not be advised to have both a Medigap plan and an FEHB plan, because they would provide duplicate coverage for out-of-pocket Medicare costs.
You may contact your local State Health Insurance Assistance Program (SHIP) for free assistance with your Original Medicare benefits.
If you’re considering enrolling in a Medicare Advantage plan or a Medicare prescription drug plan, you can compare plans online for free or over the phone with the help of a licensed insurance agent. Learn about the costs, coverage and benefits of plans that may be available in your area.
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1 United States Office of Personnel Management (OPM). (Oct. 2019). Federal Benefits Open Season. Retrieved from https://www.opm.gov/healthcare-insurance/healthcare/reference-materials/2019-open-season.pdf.