Is Enrolling In Medicare Part B Worth It When You Already Have FEHB?

Austin Costello |

As federal employees plan for retirement, one of the crucial decisions they face is how to manage their healthcare coverage. Two prominent options are the Federal Employees Health Benefits (FEHB) program and Medicare. This article will outline the similarities and differences between FEHB and Medicare and offer insights into why a federal employee might choose one over the other or decide to maintain both in retirement.

 Similarities between FEHB and Medicare:

  • Healthcare Coverage: Both FEHB and Medicare provide healthcare coverage, including hospital care, doctor visits, preventive services, and prescription drug coverage.

  • Choice of Plans: Both programs offer a range of plans to choose from, allowing individuals to select coverage that best suits their needs and preferences. While FEHB plan options are more diverse, Medicare gives people the option to stick with Part A, which is free and covers major medical events such as hospital stays, or Pay a premium for Part B which has more comprehensive services. 

  • Coordination: FEHB plans often coordinate with Medicare when an individual is eligible for both, ensuring that the two programs work together to maximize coverage and minimize out-of-pocket costs.

  • Pre-existing Conditions: Both programs typically cover pre-existing medical conditions, ensuring that retirees receive necessary care without discrimination.

Differences between FEHB and Medicare

  • Eligibility:

    • FEHB: Available to federal employees, retirees, and eligible family members.

    • Medicare: Available to individuals aged 65 and older or those with specific disabilities and medical conditions.

  • Costs:

    • FEHB: Premiums, deductibles, and out-of-pocket costs vary depending on the chosen plan. The government shares the cost of premiums with employees while they are working and continues sharing that cost into retirement as long as the employee has at least five years of service leading up to retirement. 

    • Medicare: Most individuals receive Part A (hospital) coverage without premiums, but Part B (medical) and Part D (prescription drug) require monthly premiums. Costs vary depending on income.

  • Prescription Drug Coverage:

    • FEHB: Provides prescription drug coverage through its plans, with varying costs and formulas.

    • Medicare: Offers Part D plans for prescription drug coverage, and individuals can choose standalone Part D plans to complement their Medicare coverage.

  • Coverage While Traveling:

    • FEHB: Coverage may be limited or incur higher costs when traveling outside the plan's service area.

    • Medicare: Offers more flexibility with coverage that extends throughout the United States.

Why Choose FEHB?

  • Early Retirement: If a federal employee retires before age 65, they may opt for FEHB coverage to bridge the gap until Medicare eligibility kicks in.

  • Preferred Provider Networks: FEHB plans might include preferred doctors or hospitals that an individual prefers to keep using.

  • Comprehensive Coverage: Some FEHB plans offer comprehensive coverage that may suit an individual's specific healthcare needs and preferences.

Why Choose Medicare?

  • Age Eligibility: Once an individual turns 65, they are generally eligible for Medicare, making it a logical choice for many retirees.

  • Lower Costs: Medicare Part A (hospital coverage) is often premium-free, and Part B premiums are typically lower than FEHB premiums for retirees.

  • Additional Benefits: Medicare offers various supplemental plans (Medigap) and Medicare Advantage plans that can provide additional coverage and cost-saving options.

Why Maintain Both FEHB and Medicare Part B?

  • Comprehensive Coverage: By having both FEHB and Medicare Part B, individuals can enjoy comprehensive healthcare coverage, including services that might not be fully covered by one program alone. When you have both coverages in retirement, Medicare becomes your primary insurer. Your FEHB plan then coordinates with Medicare to cover costs that Medicare doesn’t pay. 

  • Flexibility: Some federal employees prefer to keep their FEHB plan alongside Medicare to have a wider choice of providers and coverage options.

  • Prescription Drug Coverage: Maintaining both allows retirees to benefit from FEHB's prescription drug coverage without paying for Medicare Part D.

 Cost Savings: Because Medicare Part B becomes the primary insurer in retirement, some FEHB plans will offer a partial premium refund, making your FEHB premium less expensive overall. 


The choice between FEHB and Medicare Part B, or the decision to maintain both in retirement, is highly individualized and depends on various factors, including age, health status, financial considerations, and personal preferences. Federal employees should carefully evaluate their options, consider future healthcare needs, and consult with financial advisors or insurance experts to make informed choices that best suit their unique circumstances and retirement goals. Ultimately, the goal is to ensure that retirees have access to the healthcare coverage they need to enjoy a healthy and fulfilling retirement.

 The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.