Most federal employees and annuitants know that they are eligible for Medicare benefits at age 65. However, what isn’t fully understood is how and when to enroll in one or more parts of Medicare. Here are some things that you need to know when you are approaching Medicare eligibility:
#1 Initial Enrollment Period: If you are not receiving Social Security or RRB as you approach age 65, you may enroll in Medicare starting three months before your 65th birthday month and up to three months after. This is your IEP.
#2 Medicare Part A: Hospital Insurance can begin as early as age 65. It doesn’t matter if you are covered by other health insurance or whether you are working or retired. There is no premium for Part A if you receive or are eligible to receive benefits from Social Security (or the Railroad Retirement Board-RRB) or your spouse (living or deceased, including a divorced spouse) receives or is eligible to receive Social Security (or RRB benefits). While you are covered by Federal Employees Health Benefits or the Postal Service Health Benefits program as a current employee, Medicare will pay second to your employer coverage based on current employment. This also applies to your Medicare eligible spouse if they are covered by your current employment health coverage. You may also qualify for Medicare if you are the dependent parent of a fully insured deceased child. For those individuals who are receiving Social Security retirement benefits, Medicare enrollment is automatic. If you are 65 or older and do not receive Social Security retirement benefits, you may delay enrollment in all parts of Medicare if you wish to continue to contribute to a Health Savings Account with a High Deductible Health Plan.
#3 Medicare Part B: Outpatient coverage or “doctor’s insurance.” You can only sign up for Part B during designated enrollment periods. If you don’t enroll in Part B when you’re first eligible, you may have to pay a permanent late enrollment penalty. If you’re already getting benefits from Social Security or the RRB, you’ll automatically be enrolled in both Part A and Part B starting the 1st day of the month you turn 65. If your birthday is on the 1st day of the month, Part A and Part B will start the 1st day of the prior month. If you’re under 65 and have a disability, you’ll automatically get Part A and Part B after you get disability benefits from Social Security for 24 months. Also, you’ll automatically get Part A and Part B after you get certain disability benefits from the RRB. If you have ALS, you’ll get Part A and Part B automatically the month your SSDI benefits begin.
#4 Premiums for Medicare Part A and Part B: Medicare Part A is financed primarily through payroll taxes, which are paid by both employees (1.45% of earnings) and employers (matching 1.45%). The self-employed pay both shares of the tax, 2.9% of net earnings from self-employment. Because you’ve paid this tax, there is no premium for Medicare Part A. People aged 65 or older, who are citizens or permanent residents of the United States are eligible for Medicare Part A at no cost at age 65.
Medicare Part B is primarily financed through premiums that are deducted from Social Security retirement benefits or through other methods, if not receiving or eligible for Social Security retirement. Other ways to pay for Part B are outlined here: https://www.medicare.gov/basics/costs/pay-premiums
The standard Medicare Part B premium is projected to increase to $185 per month in 2025, up from $174.70 in 2024. Some beneficiaries may pay higher premium rates based on their income. In 2024, if you file an individual tax return and your Modified Adjusted Gross Income (MAGI) in 2022 was more than $103,000, you will pay an additional amount known as the Income Related Monthly Adjustment Amount (IRMAA). If you file a joint tax return, you will be affected by IRMAA if your MAGI is over $206,000. The 2025 rates will be announced later this year.
If you’re not sure if you’re enrolled in Medicare Part A or Part B (yes, there are those who don’t know if they signed up at 65 or not), look in your wallet to see if you have the red, white, and blue Medicare card. You can call the Social Security Administration at 1-800-772-1213 (TTY 1-800-325-0778) to check your enrollment status. You can also visit your local Social Security office and maybe the easiest way, is to log into your MyMedicare.gov account to check your status. You can also log into your My Social Security account.
#5 General Enrollment Period (GEP) for Part B If you don’t enroll in Medicare Part B during your IEP, you have another chance each year to sign up during a GEP from January 1 through March 31. Your coverage starts the 1st day of the month after you sign up. However, you may have to pay a late enrollment penalty for as long as you have Part B coverage. Your monthly premium will go up 10% for each 12-month period you were eligible for Part B, but didn’t sign up for it.
#6 Special Enrollment Period is available if you’re covered under an employer group health plan and the coverage is through current employment. If you are covered by “current employment” health coverage, either from your own or your spouse’s current employment, you may sign up for Medicare Part B during your SEP. This means that you may delay enrolling in Medicare Part B without having to wait for a GEP and paying the penalty for late enrollment. The SEP rules allow you to enroll in Medicare Part B any time while you or your spouse have a group health plan based on current employment or enroll in Medicare Part B during the 8-month period that begins the month after the employment ends or the group health coverage ends, whichever happens first.
You can’t enroll using an SEP until your IEP is over. When you enroll in Medicare Part B while you’re still in the group health plan, or during the 1st full month when you are no longer in the plan with current employment, your coverage begins either on the 1st day of the month you enroll or, by your choice, on the 1st day of any of the following 3 months. If you enroll during any of the remaining 7 months of the SEP, your Medicare Part B coverage begins on the 1st day of the following month. If you don’t enroll by the end of the 8-month period, you’ll have to wait until the next GEP, which begins January 1 of the next year.
#7 Coordination of Medicare with FEHB/PSHB. Under the new PSHB, if you are under age 64 on January 1, 2025, you must enroll in Medicare Parts A and B when you are retired and 65 to continue coverage under PSHB. Otherwise, enrollment in Medicare is optional for FEHB and PSHB (for current postal retirees and postal employees who are 64 or older on January 1, 2025) enrollees. Most annuitants enroll in Original Medicare (Parts A and B). Once retired, Medicare becomes the primary payer and your FEHB/PSHB pay as secondary payer. There are FEHB/PSHB plans with low rates that complement Medicare by waiving cost sharing (deductible, copays, and coinsurance) when Medicare is the primary payer. Also look for plans that provide a rebate or reduction in your Part B premium. After age 65, it may be important to have low prescription copays as well as generous coverage for physical, occupational or speech therapy benefits; durable medical equipment; coverage for hearing aids; and skilled nursing care.
#9 Medicare Advantage, Part C Many plans provide a Medicare Advantage option that may provide additional benefits such as gym membership, meal delivery after a hospital stay, dental, vision, transportation to non-emergency medical appointments and more. You can generally see any health care provider that participates in Medicare and accepts the plan. Accepting the plan means the doctor is willing to treat you and bill the Medicare Advantage provider. Your FEHB/PSHB may be able to contact your doctor on your behalf to explain how the plan works. If your doctor or hospital refuses to directly bill the Medicare Advantage plan, they may ask that you pay the full allowable amount. In that case, you can pay the doctor and then submit your claim to the plan. You will be reimbursed for the cost of the claim, less your copay. Contact the Plan for additional information regarding how you will receive care. These Part C Medicare Advantage plans available through your FEHB/PSHB plan are not the same as those advertised on TV or those on the plan finder at medicare.gov.
#10 Medicare Part D, Prescription Drug coverage If Medicare Part A and/or B is primary, and you’re enrolled in an FEHB/PSHB plan offering Medicare Part D, your prescription drug coverage will automatically become a Medicare Part D plan. This could result in savings on your prescription costs. Your drugs will still be covered, but copays and coinsurance can be lower and out of pocket expenses on medications are capped at $2,000 / year (some currently have this limit, but all plans are included starting in 2026). If available, once you reach the $2,000 max for prescription drugs, you will pay $0 for prescription drugs. This $2,000 will also apply to the medical plan’s total calendar year out-of-pocket maximum. There are some downsides to adding this coverage to your FEHB plan. One negative is if you are a higher income enrollee. There is an IRMAA surcharge for higher income retirees (like Part B IRMAA, but different rates). With Medicare Part D coverage, you may not use a manufacturer’s discount coupon. PSHB enrollees who are eligible for Medicare Part D must enroll in a Medicare Part D plan. This includes annuitants who are newly eligible for Medicare and their covered family members.
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