Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Medicare Mysteries

I have spent the past 20 years trying to understand the relationship between the Federal Employees Health Benefits Program and Medicare. I think I know more than I did a couple of decades ago, but that isn't saying much. I thought I would take some time during this open season to try to help those who are making a decision about the best health plan after you turn 65. Let's start with some basics. In my next column, I'll take up the big question: "Do I need Part B?"

What Is Medicare (From A to B)?

Medicare is health insurance. It has been around since 1965 and mostly serves Americans 65 and older. It also covers some people with disabilities and those who have kidney disease. It's distinct from Medicaid, which is health insurance for the poor -- or those who become poor when paying for the expense of a nursing home.

The original Medicare consists of parts A and B. Part A covers hospitalization, and Part B covers outpatient care and doctor visits. Part A is what you are helping to finance by the 1.45 percent tax that is withheld from your salary. There is no premium to enroll in Part A for people who have paid this tax. Part B has a monthly premium.

What About Parts C and D?

Part C is called Medicare Advantage. It consists of health plans that are approved by Medicare but are run by private companies. If you use Medicare Advantage for your health insurance, you will not need FEHBP coverage. There are many different kinds of Medicare Advantage plans. Some function like preferred provider plans and others are like health maintenance organizations. Premiums vary depending on the plan you choose. Many include prescription coverage.

Some of these plans have premiums that are smaller than FEHBP premiums, but before you sign up for one, look closely at the out-of-pocket expenses you will be responsible for and consider whether you will need additional coverage for such items as prescriptions and dental benefits. You also might find there are more restrictions on the doctors you can use. If you use a Medicare Advantage plan, you can suspend your FEHBP coverage in retirement. The Office of Personnel Management Web site has more information on how to do that.

Part D is Medicare's prescription drug benefit. It has a separate monthly premium. Most federal employees and retirees do not need to enroll in Part D, since all FEHBP plans have prescription drug benefits that are at least equal to the standard Medicare prescription drug coverage. The average cost of a Part D plan is about $30 per month.

Why Is Medicare's Web Site So Confusing?

Maybe it's just me, but I think the official Medicare Web site could be more user-friendly. It has loads of information, but I find it hard to find exactly what I'm looking for at times. Here's a quick guide to some key information you can find on the site:

How Do I Enroll in Medicare?

The short answer is it happens via Social Security. Here's the basic information you need.

If you already are getting Social Security retirement, disability benefits or railroad retirement checks, you will be contacted a few months before you become eligible for Medicare and given the information you need. You will be enrolled in parts A and B automatically. Because you must pay a premium for Part B, however, you have the option of turning it down.

If you are not getting retirement benefits already, you should contact Social Security about three months before your 65th birthday to sign up for Medicare. You can sign up even if you don't plan to retire at 65.

What If I'm Still Working?

Contact Social Security and let them know that you are currently employed with health insurance through your employer, and you want to enroll only in Part A. Medicare will be the secondary payer to FEHBP. You will continue to pay your co-pays, co-insurance and deductibles as applicable to your FEHBP plan. You will have a special enrollment period following your retirement to enroll in Part B without incurring a late enrollment penalty. This exception to enrolling at age 65 also applies when you are covered by the health plan of a spouse who is still employed.

What Are the Benefits of Enrolling in Part A?

Remember that once you are enrolled in Part A as a retiree, Medicare becomes the primary payer for your hospitalizations. This can provide huge savings. In many cases your FEHBP plan will waive its normal inpatient co-payments, co-insurance and deductibles when Medicare is the primary payer. Check your FEHBP plan's brochure to find out the benefits of coordinating Medicare with your plan.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on or on WFED AM 1500 in the Washington metro area.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.