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Medicare and the Federal Employee Health Benefits Program (FEHBP), Part 4

Written by James Marshall on . Posted in Dollars & Sense

Over the course of this four part series, I covered the basics of Medicare (Part 1), broke down the main parts of Medicare to help readers understand which parts may prove most useful to Federal retirees at age 65 or older (Part 2), and discussed Medicare Part B in greater detail (Part 3). In Part 4, I conclude this series with a discussion of Medicare Parts C and D.

Part C Breakdown 

Medicare Advantage Plans is what many folks in America sign up for when they need a back-up plan to Medicare Parts A and B when their private sector companies don’t let them keep their coverage in retirement.  But the Federal government does NOT help Americans pay for up to 75% of the Advantage Plan premium like OPM does for Federal retirees with FEHB coverage.  And in many cases, your FEHB coverage may be better.  If you are a Federal retiree with FEHB coverage, why would you want to pay 4 times as much for less coverage under Medicare Part C when you can just keep FEHB coverage as your back-up to Medicare Parts A and B? 

Once retired, depending upon where you live and what sort of health insurance coverage you need, there are some Advantage Plans under Medicare Part C that might be less expensive than some of the FEHB plans and may provide the coverage you need for a period of time.  When you’re doing your research, if you find this to be true, you can suspend your FEHB coverage for one of these Advantage Plans.  Later, if you decide that the Advantage Plan is no longer useful to you, the option to un-suspend your FEHB coverage during a future open season in retirement is always available to you indefinitely. 

Most Federal retirees who I have spoken with are happy with FEHB as their back-up plan to Medicare Parts A & B and have had no interest in Medicare Part C.  As long as you understand your options, you can decide this for yourself once you become eligible for Medicare. 

Part D Breakdown 

OPM has already deemed that your prescription coverage under FEHB is “as good as or better” than what’s currently offered under Medicare Part D.  So why would a Federal retiree want to pay another premium to obtain coverage that they don’t need?  Most Federal retirees with FEHB coverage don’t need Medicare Part D. 

However, if the Federal retiree with FEHB coverage ever decided to enroll into Medicare Part D later for any reason, the retiree would be exempt from any late enrollment penalties that others might typically have to deal with.  

I suppose a rare example might involve someone who has decided to suspend FEHB coverage for a Medicare Part C Advantage Plan.  Most Advantage Plans under Medicare have prescription coverage that is better than what Part D offers, therefore many of these folks wouldn’t need Part D either.  However, some folks might benefit from Part D enrollment if they are enrolled in one of the less expensive Advantage Plans with limited prescription coverage.  So in this rare situation where a Federal retiree suspends FEHB for one of these less expensive Advantage Plans with limited prescription coverage, they may find Part D useful. 


In summary, the following points will apply to most people:

  • If you retire before the age of 65, don’t worry about Medicare until you reach the age of 65.
  • If you retire after the age of 65, sign up for Medicare Part A at 65, but don’t worry about Part B until you retire.
  • Consider Medicare Part B once you’re retired and eligible, but do your research and determine what your out-of-pocket expenses might be without Part B.  If you believe you can afford those expenses, don’t worry about Part B.  But if those expenses could potentially derail your retirement income, or if you don’t believe you could afford those expenses if that “rainy day” were to ever happen to you and/or your spouse, consider Part B enrollment.
  • Consider changing FEHB plans to something more compatible once Medicare Parts A & B become primary coverage for you and/or your spouse.  If no other FEHB plans or Medicare Advantage Plans are more suitable, keep what you have as your back-up to Medicare.
  • Don’t worry about Medicare Parts C or D unless you find that coverage to be more attractive than FEHB. 

FEHB and Medicare Booklet 

FEHB and Medicare Fast Facts  

James Marshall is a federal retirement benefits specialist and the owner of Federal Retirement Planning LLC. For more information, please visit the Federal Retirement Planning LLC website.

Tags: retirement Medicare FEHBP Federal Employees Health Benefits Program health insurance Advantage Plan James Marshall

YGL Profiles

An Interview with Melanie Keller, Assoc. Director for Management, Center for Drug Evaluation & Research (CDER)

Melanie Keller is the Associate Director for Management at the Center for Drug Evaluation & Research (CDER), the largest Center at the Food and Drug Administration (FDA) within the U.S. Department of Health and Human Services (HHS). She serves as the Center’s Executive Officer and oversees all administrative operations. Ms. Keller is responsible for budget formulation, user fee collection, and execution of a $1 billion annual budget. She also leads and directs the Center’s human capital management of more than 4,500 employees, and is currently leading recruitment strategies for 795 vacancies within the Center. 


From the Hill

Senators Explore Oversight of Small Agencies, Drafting New IG Bill

Senators last week discussed oversight of small agencies, commissions, and boards with a hearing before the Senate’s Financial and Contracting Oversight subcommittee.

Challenges of small agency oversight was discussed at the hearing, as were potential legislative actions to improve the oversight of such organizations.  

Chairwoman of the subcommittee, Sen. Claire McCaskill (D-MO) said at the hearing that there are at least 40 small agencies with over $1 billion in budgetary authority with “virtually no oversight.”


Case Law Update

MSPB Grants Veteran’s Request for Corrective Action after DoD Rejected Job Application

A GS-12 Defense Contract Management Agency (“DCMA”) employee applied for a GS-13 position. The vacancy announcement, issued by DCMA, listed the DCMA and Department of Defense (“DoD”) employees that could apply for the position, and specified that applicants “MUST submit documents verifying your eligibility with your application package. These documents may include, but are not limited to: for current employment verification, a non-award [Standard Form (SF)]-50 or DD3434…” The DCMA employee’s application contained a resume, an SF-52, education transcripts, and a Form DD 214, but was rejected due to the employee’s failure to include an SF-50. An MSPB administrative judge found that the agency improperly rejected the employee’s application, because the SF-52 he included contained the same employment verification documentation. However, the administrative judge ultimately denied the employee’s request for corrective action because of a finding that the agency did not accept applications from individuals outside its own workforce under merit promotion procedures, and therefore had not violated statute by denying the employee, who was a veteran under 5 U.S.C. § 3304(f)(1), the opportunity to compete. On April 1, 2014, the MSPB reversed the initial decision in part, and granted the employee’s request for corrective action.


GEICO's Good Stuff

Tell Us: Why Do You Heart Public Service

GEICO’s Good Stuff is a column series highlighting great stuff happening in the federal community.

The Public Employees Roundtable (PER) is collecting testimonials from government employees and members of the public in support of an I “Heart” Public Service whiteboard photo campaign. Images will be posted on the PER on Facebook and Instagram pages.

The group behind Public Service Recognition Week (PSRW), which takes place this year from May 4-10, launched the whiteboard campaign in support of this year’s theme: Proud to Serve.

Government employees and members of the public are invited to fill out their own whiteboard and share why they love public service and tag their photos with #PSRW and #Proud2ServeUSA.