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Federal Employees Health Benefits and Medicare

Medicare Made Easy

If you Have an FEHB Plan Should You Enroll in Medicare?

If you have Federal Employees Health Benefits (FEHB), deciding whether to add Medicare as part of your health coverage can be difficult. Medicare is made up of several parts and you may not know which of them you might or might not need.

If you already have an FEHB plan the easiest way to figure out if you should enroll in Medicare is to break Medicare down by its parts. Medicare is made up of four parts of which are all outlined below.

Original Medicare and FEHB

Original Medicare consists of two main parts, Medicare Part A and Medicare Part B. A few things Medicare Part A covers are inpatient hospital stays, post-hospital home health care, and hospice services. Medicare Part B mostly covers everything else, like doctor visits, lab testing, surgery, physical therapy, chemotherapy, and of course, durable medical equipment.

If you or your spouse have worked for at least 10 years in the U.S., you have likely earned your Part A premium-free. The FICA taxes during those working years go towards your future Medicare hospital benefits. This makes your decision about enrolling in Part A kind of simple. You’ll receive extra coverage to add to your FEHB hospital coverage, and you won’t have to pay any additional monthly premium for it.

Now, Medicare Part B, does require a monthly premium, so some federal retirees will choose not to enroll in it. However, if you will gain access to certain benefits that you might not have with your FEHB plan you might still consider enrolling in Part B. With Medicare Part B, for example, you’ll receive access to coverage for durable medical equipment, such as walkers, wheelchairs, and oxygen pumps or tanks.

Additionally, your FEHB also coordinates with your Medicare benefits which might reduce your out-of-pocket costs. Don’t forget, if you fail to enroll in Medicare Part B when you are first eligible, you may be subject to a penalty when you decide to add it at a later time.

Medicare Part D and FEHB

Medicare Part D is Medicare’s coverage for retail prescription drugs. FEHB plans also have built-in coverage for prescription drugs. Since the FEHB plan’s drug coverage is quite comprehensive, you more than likely will not need to enroll in Medicare’s Part D. You may if you wish to, however, most people just use the FEHB drug benefits.

Medicare Advantage Plans and FEHB

The Part C of Medicare, commonly referred to as Advantage plans, are a type of private insurance plan that Medicare beneficiaries may enroll in additionally to having Parts A and B. Persons who enroll in an Advantage plan receive their benefits from an insurance company instead of from Medicare alone.

FEHB plans are similar to Medicare Advantage plans in that they both have set co-pays and deductibles for certain services.

Most Medicare Advantage plans generally offer many of the same benefits as FEHB plans do. However, having both an FEHB plan and a Medicare Advantage plan isn’t needed.

Ultimately, you do have the option of choosing Medicare over your FEHB plan. Medicare Advantage plans usually have affordably low monthly premiums, some even costing $0 a month. Keeping in mind that in order to enroll in a Medicare Advantage plan you must continue to pay your Part B monthly premiums.

Enrolling in a Medicare Advantage plan suspends the FEHB plan. Do take the time to review your coverage details if you are interested in dropping your FEHB plan and enrolling in a Medicare Advantage plan. Even with ways to re-enroll in an FEHB plan, you’ll want to be sure you’re making a smart move first.

Medigap and FEHB

A Medicare Supplement, commonly known as Medigap, is another type of plan that Medicare beneficiaries may add to their Part A and B coverage. This type of plan helps to pay for your out-of-pocket expenses that Original Medicare doesn’t. Simply, a Medigap plan supplements Original Medicare.

If you were to have both Original Medicare and an FEHB plan in retirement, your FEHB plan would supplement Original Medicare. This is why it unnecessary to have an FEHB plan, Original Medicare, and a Medigap plan.

Once again, you do have the option to choose Medicare over an FEHB plan. You simply must compare costs and determine whether you would save more money by choosing Original Medicare with a Medigap plan or just an FEHB plan by itself.

Also, remember that Medigap plans do not cover prescription drugs. So, if opt for this route, you’ll need to add on a Medicare Part D prescription drug plan. This cost will also need to be included in the above calculations.

The Decision Is Yours

It all comes down to piecing together the right parts for you as an individual. If you have the means in your monthly budget, compare whether having an FEHB plan with Original Medicare or having Original Medicare in conjunction with a Medigap plan is best for you.

If you can afford to have both, then sit down with us and compare the coverage details. You’ll want to review your premiums, out-of-network care, drug coverage, and much more before making your final choice. You can also download the Office of Personnel Management’s booklet about The FEHB Program and Medicare for additional information.

Sonia Ashford is a Medicare insurance expert and founder of Ashford Insurance, a licensed insurance agency that helps Medicare eligibles understand Medicare in simple, plain terms.