Medicare for Retired Federal Employees
Medicare is a federal government-sponsored health insurance program covering: (1) people 65 years of age and older; (2) some people with disabilities under 65 years of age; and (3) people with end-stage renal disease (permanent kidney failure requiring dialysis or a transplant). How to understand how Medicare for retired federal employees works and how it interacts with your FEHB coverage is also very important.
Part A (Hospital Insurance). Most people do not have to pay for Part A. If you or your spouse worked for at least 10 years in Medicare-covered employment, you should be able to qualify for premium-free Part A insurance.
Part A coverage includes:
- post-hospital skilled nursing facility care
- home health care
- hospice care, and
Part A does not cover 100% of these expenses. A graduated payment schedule is applied based on the number of days that care is required. You would be responsible for the remainder. The Federal Employees Health Benefits (FEHB) plan will cover some of the expenses, but you should ensure that you understand what is and isn’t paid for by Medicare and/or FEHB, by checking with local Medicare representatives and consulting your FEHB plan brochure or carrier representative.
There is no premium for Part A coverage, which is paid for through Federal Insurance Contributions Act (FICA) taxes on wages while you were/are employed. You should sign up as soon as you are eligible if you are not already receiving Social Security benefits. If you are already receiving Social Security benefits before age 65, you are automatically enrolled in Medicare.
Part B (Medical Insurance). Most people pay monthly for Part B. Generally, Part B premiums are withheld from your monthly Social Security check or your retirement check.
Part B provides the following coverage:
- doctors’ services
- ambulance services
- outpatient hospital treatment, and
You are automatically eligible to enroll in Part B when you are eligible for Part A. However, Part B has a monthly premium which changes each January. If you fail to enroll in Part B at your first opportunity, there is a 10% penalty applied for each year following the year in which you become eligible. However, if you are a federal employee covered by FEHB and continue to work past Medicare eligibility, you will not be affected by the 10% increase.
Part C (Medicare Advantage). If you are eligible for Medicare, you may have choices in how you get your health care. Medicare Advantage is the term used to describe the various health plan choices available to Medicare beneficiaries. If you are eligible for Medicare, you may choose to enroll in and get your Medicare benefits from a Medicare managed care plan. These are health care choices (like HMOs) in some areas of the country. In most Medicare managed care plans, you can only go to doctors, specialists, or hospitals that are part of the plan. Some Medicare Advantage plans cover extra items, such as prescription drugs. To learn more about enrolling in a Medicare managed care plan, contact Medicare at 1-800-MEDICARE or go to www.medicare.gov.
Part D (Medicare Prescription Drug Coverage). There is a monthly premium for Part D coverage. Most federal employees do not need to enroll in the Medicare drug program, since all Federal Employees Health Benefits program plans will have prescription drug benefits that are at least equal to the standard Medicare prescription drug coverage. Still, you may want to be aware of the benefits Medicare is offering, so you can help others make informed decisions. If you have limited savings and a low income, you may be eligible for Medicare’s Low-Income Benefits. For people with limited income and resources, extra help in paying for a Medicare prescription drug plan is available. Information regarding this program is available through the Social Security Administration (SSA). For more information about this extra help, visit SSA online at www.ssa.gov (external link), or call them at 1-800-772-1213 (TTY 1-800-325-0778).