Top 10 Misconceptions About Federal Employee Health Benefits and Medicare – Debunked!

As federal employees and retirees approach the age of 65, Medicare often becomes a topic of discussion. However, there are several myths surrounding Medicare and the Federal Employees Health Benefits (FEHB) program that have led to confusion and misinformation. In this article, we will debunk 10 of these myths to help federal retirees make informed decisions about their healthcare coverage.

Myth #1: Medicare is free.

While it’s true that federal employees who have paid the Medicare payroll tax for at least 10 years are eligible for Medicare Part A at no premium cost, Medicare Part B (Medical Insurance) does have a monthly premium. In 2023, this premium starts at $164.90 per month and can increase with higher income levels. Additionally, Medicare Part D (Prescription Drug Coverage) may come with a monthly premium if you choose to enroll, and this premium varies based on your plan and income.

Myth #2: Medicare has no deductibles.

Medicare Part A and Part B typically cover 60 to 80 percent of a Medicare enrollee’s medical costs, leaving enrollees responsible for deductibles and other charges. However, when federal retirees enroll in Medicare Parts A and B along with their FEHB program health plan, often referred to as a “Medicare supplement” plan, they may not have to pay these deductibles or other expenses, as the FEHB plan covers them.

Myth #3: A federal retiree is automatically enrolled in Medicare at age 65.

While federal retirees receiving Social Security benefits before age 65 are automatically enrolled in Medicare Part A when they turn 65, they must actively enroll in Medicare Part B, Medicare Advantage, or Medicare Part D themselves.

Myth #4: Federal retirees are encouraged to enroll in a private Medicare Supplement or Medigap plan.

This is not true. Federal employees eligible to retain their FEHB program in retirement can use it as their Medicare supplement insurance. FEHB health plans coordinate well with Medicare, often covering what Medicare does not pay, making private Medicare supplement plans unnecessary and costlier.

Myth #5: Federal retirees with both Medicare and FEHB are “over-insured.”

Federal retirees with both Original Medicare (Medicare Parts A and B) and an FEHB program health plan are not over-insured. Medicare serves as primary insurance, covering a substantial portion of medical expenses, while the FEHB plan acts as secondary insurance, covering the remainder. This dual coverage typically leaves retirees with minimal out-of-pocket expenses.

Myth #6: Federal retirees must suspend their FEHB program health insurance to enroll in Medicare Advantage.

Federal retirees can participate in the Annual Enrollment Period (AEP) to select Medicare Advantage plans. However, they can also choose FEHB program-sponsored Medicare Advantage plans, which offer cost-sharing advantages and are partially funded by the federal government.

Myth #7: Original Medicare includes prescription drug coverage.

Original Medicare (Medicare Parts A and B) does not include prescription drug coverage. However, federal retirees with both Original Medicare and FEHB program health insurance often have sufficient prescription drug coverage through their FEHB plan. If needed, they can enroll in Medicare Part D during the annual open enrollment period.

Myth #8: Medicare Does Not Cover Dental, Vision, and Hearing Benefits.

While Original Medicare primarily covers medical care and hospital expenses, many Medicare Advantage plans, including FEHB program-sponsored plans, offer coverage for dental, vision, and hearing services in addition to medical services.

Myth #9: Federal retirees can enroll in Original Medicare at any time.

There are specific enrollment periods for Medicare, including the Initial Enrollment Period (IEP) and the Special Enrollment Period (SEP). Missing these periods may result in late enrollment penalties. The General Enrollment Period is also an option, held annually from January 1 to March 31.

Myth #10: Medicare pays for medical expenses in a foreign country.

Original Medicare does not cover medical expenses incurred in foreign countries. Federal annuitants should check whether their FEHB program health plans provide coverage for medical expenses abroad, as many do reimburse for such expenses.

Conclusion

Navigating the complexities of Medicare and the FEHB program can be challenging, but understanding the facts is crucial. These debunked myths should help federal employees and retirees make informed choices about their healthcare coverage. By maximizing the benefits of both Medicare and the FEHB program, retirees can enjoy comprehensive healthcare coverage while minimizing their out-of-pocket expenses.