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What is the difference between FEHB and Medicare for congressional retirees?
Executive summary
FEHB is a voluntary employer-sponsored program that many federal retirees can keep in retirement (if enrolled the last day of work and for the prior five years); Medicare is the federal age- and disability‑based program most retirees become eligible for at 65. FEHB can remain primary if you decline Medicare Part B, but if you enroll in Medicare Parts A/B then Medicare usually pays first and FEHB coordinates as secondary—this coordination can lower out‑of‑pocket costs for some plans [1] [2] [3].
1. What each program is and who runs it
Medicare is a federal entitlement program covering hospital (Part A), medical/outpatient (Part B), and optional drug (Part D) benefits administered by CMS; FEHB (Federal Employees Health Benefits) is a government‑sponsored insurance program run through OPM and private carriers that provides employer‑style coverage to current and retired federal employees and their families [4] [2].
2. Primary vs. secondary payment: who pays first
If a retiree enrolls in Medicare Part A and B, Medicare generally becomes the primary payer and FEHB becomes secondary—meaning Medicare pays first and the FEHB plan may fill gaps [3]. If a retiree keeps FEHB but declines Part B, FEHB can remain primary for many services; some retirees therefore keep FEHB only and delay Part B [2] [5].
3. Common enrollment choices and timing issues
Many retirees enroll in premium‑free Part A and also Part B because some FEHB plans reduce cost‑sharing when paired with Medicare; however, a retiree who delays Part B should be aware of Special Enrollment Period rules tied to FEHB employment coverage to avoid late‑enrollment penalties [6] [2] [5]. OPM and plan materials are the authoritative places to check specific timing and penalties [4].
4. Cost tradeoffs: premiums, reimbursements and IRMAA
FEHB premiums are subsidized by government contributions and can remain attractive; Medicare Part B carries a monthly premium (reported up to $185 in 2025 in one guide) and higher‑income enrollees may face IRMAA surcharges that raise Part B/Part D costs—these factors change the cost calculus and may make FEHB+Medicare or FEHB alone preferable depending on income and plan details [7] [3] [8].
5. How benefits actually coordinate (practical effects)
When Medicare is primary, FEHB often pays the balance for services covered by both programs and some FEHB carriers will waive deductibles or reduce cost‑sharing for Medicare‑covered services; conversely, Medicare Advantage (Part C) options offered to federal retirees may replace the need for FEHB in some cases, but enrolling in an MA plan usually requires Part B and can affect FEHB eligibility or require suspending FEHB [3] [9] [4].
6. Prescription drugs: FEHB vs. Medicare Part D
FEHB plans include prescription drug coverage, so many federal retirees do not need Part D; if a retiree does enroll in Part D, Medicare drug benefits will generally be primary over FEHB drug coverage in most cases [7] [4].
7. Special rules for Postal Service and Medicare Advantage offerings
Postal Service retirees face unique rules: beginning in 2025 some Postal Service annuitants must have Medicare to keep Postal Service health benefits, so the USPS change alters the general FEHB/Medicare choices for that group [2]. Separately, a growing number of FEHB carriers offer Medicare Advantage options tailored to federal retirees; these can be attractive but may be less favorable for those subject to IRMAA surcharges [10] [11].
8. Eligibility to keep FEHB in retirement and reenrollment limits
To continue FEHB into retirement you must be enrolled on your last day of employment and generally have had FEHB coverage for the five years before retiring (TRICARE can count in some cases toward that five‑year rule); failure to elect FEHB on retirement can lead to permanent loss of FEHB participation [1] [8].
9. Points of disagreement and open questions in reporting
Reporting consistently notes the coordination that can lower costs when Medicare is primary and FEHB secondary [3] [6]. Sources differ on emphasis: consumer guides urge many retirees to enroll in Parts A and B to obtain those coordination savings [6] [3], while other guides emphasize that you do not have to enroll in Medicare if you have FEHB and that there are valid reasons to delay Part B [5] [2]. Available sources do not mention whether every FEHB plan uniformly offers the same level of Part B cost‑sharing reductions—plan specifics vary and must be checked with each carrier (not found in current reporting).
10. Practical takeaway and next steps for congressional retirees
Review your FEHB plan’s materials and OPM guidance, model out total expected costs including Part B premiums and possible IRMAA, and confirm any USPS‑specific rules if you are a postal annuitant; consult plan carriers about whether they waive deductibles or reimburse Part B premiums and ask OPM about reenrollment rules if you consider switching to a Medicare Advantage option [4] [3] [2].
Limitations: this summary uses the provided reporting; plan‑level details (exact premium reimbursements, waiver policies, and which FEHB plans “reduce cost‑sharing” with Medicare) vary by carrier and are not exhaustively listed in these sources (not found in current reporting).