Which Medicare option to choose and when to enroll are questions most Americans grapple with as they approach their milestone 65th birthday. Those choices can be even more complicated when it comes to people who are retiring from a federal, state or local government job or who have served the country in the military. Here are some things to think about when deciding how to best meet your health care needs after age 65.
The Federal Employees Health Benefits (FEHB) Program provides for about 8 million federal civilian employees, retirees and their families, making it the world’s largest employer-sponsored group health insurance program. Generally, if you’ve worked for the federal government for at least five years, you can continue getting health benefits when you retire. The typical approach would be to sign up as soon as you’re eligible for Medicare Part A, which covers hospital services, and upon retiring, for Part B, which covers doctor visits, diagnostic tests and other outpatient care. Part A is free; the standard Part B premium this year is $164.90 per monthy.
Then you can sign up for an FEHB retiree plan, of which there are many. These plans all include prescription drug coverage, but you still may want to check out Medicare Part D prescription drug plans to see if those work better for you. Some of the plans serve as secondary payers to original Medicare, covering some services Medicare does not and paying for many Medicare out-of-pocket costs, such as copays and deductibles. Office of Personnel Management officials say their retiree plans are generally more robust than private Medigap plans, though you should compare your choices to verify that. Other FEHB plans offer a Medicare Advantage arrangement. Plans vary widely in price; some of the more expensive plans might include health coverage for family members not in Medicare.
As a federal retiree, you also can enroll (or stay enrolled) in the Federal Employees Dental and Vision Insurance Program (FEDVIP) as long as you retired on an immediate annuity. Unlike FEHB health benefits, there is no five-year requirement.