Do I Need Both FEHB and Medicare? The Best Investment Secret in 2025

The answer is simple: it depends on your personal preferences. Legally, you can have both, which can be advantageous yet cheaper if you follow the right guidelines. For most federals, but if you can, it can be beneficial. 

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You need to understand the options available and make the choice that’s best for your health and your wallet.

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What is FEHB and Medicare

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The Federal Employees Health Benefits (FEHB) Program gives you access to comprehensive health insurance before and after retirement. It provides a wide range of plan options with government-shared premium costs and continued coverage after retirement.  When you retire, FEHB is no longer “active employment coverage” but rather “annuitant coverage.”
 

Medicare, on the other hand, kicks in at age 65 and has multiple parts:

• Part A (hospital care) – Free for most
  
  
• Part B (doctor visits & outpatient) – Comes with a monthly premium.
  
  
• Part C (Medicare Advantage) – An alternative to Parts A & B
  
  
• Part D (prescription drugs)

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Federal employees who turn 65 are eligible for Medicare. But since many are already happy with their FEHB coverage, they don’t feel the need to enroll. However, Medicare charges penalties if you don’t sign up on time, which puts federal employees in a tough spot—enroll just to avoid the penalty, or skip it and risk paying more later.

So what happens when you have both?

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Most federal retirees continue to keep their FEHB coverage and enroll in Medicare Part A. Since Part A is premium-free, there’s no downside—it just acts as a secondary payer, reducing hospital costs.

But the real debate starts with Medicare Part B.

Should you add it—and pay extra premiums—when FEHB already covers outpatient care?

Let’s Weigh the Pros and Cons—

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1. Reasons to Enroll in Part B (and Keep FEHB):

• Lower out-of-pocket costs: FEHB may waive deductibles and copays when Medicare is primary.
  
  
• More coverage options: You benefit from both networks—federal and Medicare-approved providers.
  
  
• Peace of mind: FEHB + Medicare combo often means nearly full coverage.
  
  

2. Reasons You Might Skip Part B:

• Premiums can be costly, especially if you are on a tight budget.
  
  
• You may not use it enough to justify the cost—especially if you're healthy and your FEHB plan already offers strong benefits.
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Understanding the Options Available

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• Keeping FEHB and enrolling in Medicare:
  Medicare pays first, and FEHB pays second. You can sign up for Part A (hospital) and Part B (doctor visits). If Part A is free for you, it’s usually a good idea to enroll.
• Stopping FEHB and choosing Medicare Advantage:
  If you pick a Medicare Advantage plan, you must have both Parts A and B. Many Medicare Advantage plans cost nothing extra, which can save you money.
• Keeping FEHB as your main coverage:
  If you don’t sign up for Medicare Part B, your FEHB will keep paying first for your medical costs.

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What Most Federal Retirees Do

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Data shows that many retirees:   

• Enroll in Medicare Part A
  
  
• Keep their FEHB plan
  
  
• Debate (and often opt into) Part B based on their expected healthcare usage and financial comfort
  
  

Some even consider dropping FEHB for a Medicare Advantage Plan, but this is less common and requires deeper analysis of coverage trade-offs.

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Coordination of Benefits: Who Pays First?

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According to the OPM guidelines, coordination between the two plans generally results in better coverage, but make sure to understand who pays first in your unique situation.

When you have both FEHB and Medicare, one will pay the bill first, and the other will pay what's left. This is called coordination of benefits.

• If you’re retired, Medicare pays first, and FEHB covers the rest.
  
  
• If you’re still working, FEHB pays first, and Medicare pays second (if you enrolled).
  
  

Knowing who pays first helps avoid surprise bills and makes sure your claims are handled smoothly.

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So, Do I Need Both FEHB and Medicare?

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Your age, health, budget, and retirement plans all factor into this decision. There’s no universal answer, but here's a good rule of thumb:

“If you want the most comprehensive coverage with fewer gaps, pairing Medicare with FEHB is a strong choice.”

Well, you can describe it as—

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1. Yes, You Need Both

FEHB usually covers more than Medicare, like emergency care outside the U.S., and sometimes dental and vision. Plus, even after you retire, you can switch to a better FEHB plan during open season if your current one isn’t enough.

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2. No, You Don’t Need Both

Even though it might seem like you don’t need both, having FEHB and Medicare together can be a big benefit. Many FEHB plans work with Medicare to cover the rest of your bill and often waive things like deductibles and co-pays, sometimes leaving you with no out-of-pocket costs at all.

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Let Experts Decide for You

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Choosing between FEHB and Medicare—or figuring out how to use both—can feel overwhelming. That’s where Federal Pension Advisors comes in.

We specialize in helping federal employees and retirees make smart, stress-free decisions about their health and retirement benefits. From understanding coverage options to avoiding costly penalties, our team guides you every step of the way.

Talk to a Federal Benefits Expert Today – so you can stop guessing and start planning with confidence.

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