Helping Federal Employees and Annuitants Understand Their Benefits

 

Medicare 2025 Part A, B, C and D

Do Federal Retirees Need to Sign up for Medicare?




 

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The original "Traditional Medicare" Plan (Medicare Part A & B) is available everywhere in the United States. It is the way everyone used to get Medicare benefits and is the way most people get their Medicare Part A and Part B benefits now. You may go to any doctor, specialist, or hospital that accepts Medicare.

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The Traditional Medicare Plan pays its share and your supplemental FEHB coverage often pays the difference and if you carry both Part A and B most FEHB plans waive the deductible, copayments and coinsurance. Some things are not covered under Original Medicare, like prescription drugs.

Psasrt B 2025 Premiums Monthly Part B premiums increased to $185.00 in 2025

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 SS Medicare and Pension XGuide

Are you eligible for Medicare?

Usually monthly premiums for Medicare Part A (Hospital Insurance) are free if you or your spouse paid Medicare taxes while working. This is referred to as  "premium-free Part A." If you don't qualify for Part A, the 2024 premium is either $278 or $505 each month, depending on how long you or your spouse worked and paid Medicare taxes.

Most people get Part A without having to pay a premium. Premiums for Part A are free at 65 if:

  • You already get retirement benefits from Social Security or the Railroad Retirement Board.
  • You're eligible to get Social Security or Railroad benefits but haven't filed for them yet.
  • You or your spouse had Medicare-covered government employment.

If you're under 65, you can get premium-free Part A if:

  • You got Social Security or Railroad Retirement Board disability benefits for 24 months.
  • You have End-Stage Renal Disease (ESRD) and meet certain requirements.

In most cases, if you opt to purchase Part A, you must also take Medicare Part B and pay a monthly premium for both.

Medicare has four parts:

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. (Someone who was a Federal employee on January 1, 1983 or since automatically qualifies.) Otherwise, if you are age 65 or older, you may be able to buy it. Contact 1-800-MEDICARE for more information.

Federal employees are eligible to receive part A coverage without a premium because we paid Medicare tax on our earnings while employed. Essentially, if you or your spouse worked for 10 years or more in Medicare-covered employment, you are eligible for free Part A hospital insurance. 

Applying for Part A is a cost effective option for most because with the majority of FEHB plans your hospital copayments and coinsurance are waived.  They don't waive prescription copayments or coinsurance.  It's important to know that when Medicare A coverage limits are reached most plans require the patient to pay any difference between the FEHB provider allowance and the billed amount or pay the inpatient hospital per-day copayments depending on the plan you are enrolled in.

If you decide not to apply for Medicare at age 65 the Blue Shield plan brochure states,  "Under the FEHB law, we must limit our payments for inpatient hospital care and physician care to those payments you would be entitled to if you had Medicare. Your physician and hospital must follow Medicare rules and cannot bill you for more than they could bill you if you had Medicare. You and the FEHB benefit from these payment limits. Outpatient hospital and non-physician based care are not covered by this law; regular Plan benefits apply."  Essentially your doctors aren't going to receive more than the Medicare payment schedule whether or not you elect Medicare coverage.  

When you sign up for Medicare and are retired, your FEHB insurance becomes your supplemental coverage and Medicare is your primary health care provider and they pay first. Your FEHB plan picks up the difference to the extent outlined in your plan's benefit brochure, review Section 9 thoroughly.  If you only pick up Part A your FEHB plan will remain your primary coverage for your medical Insurance including doctor's visits while Medicare A will be primary for your hospital coverage.  If your spouse is under age 65 their primary provider will be your FEHB plan until they reach age 65.

For more in-depth information on Medicare A read Medicare and FEHB Options - What Will You Do When You Turn 65? (Part 1).

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.

Medicare B (Medical Insurance) that covers physician and outpatient care requires more thought because all must pay an income adjusted monthly premium for coverage. If you don't take Part B at first eligibility (at 65 if retired and not covered under a working spouse or new employer plan; or within 8 months of post 65 retirement or loss of coverage under a working spouse after 65) there is a 10% penalty on the current year premium added  for each year you delay enrollment. 

If you are 65 or over and still employed by the federal government or are a 65 year old retiree that has health care coverage through your new employer or you are covered under a working spouse exemption, you can delay applying for Part B without penalty and that makes sense for many.  You can delay taking Part B without penalty if you switch FEHB coverage to a federally employed spouse to keep the benefit premiums non-taxable and delay without penalty for the 65 year old retiree's Part B enrollment. Unfortunately retiree's FEHB premiums are considered taxable income unlike active federal employees.   

Many retirees work at another job or start businesses after they leave federal service. Federal retirees can also delay taking Part B without penalty if they are covered under a working spouse exemption or while working for other employers that provide primary healthcare coverage where the FEHB becomes secondary. You have to evaluate the costs to see if accepting insurance from your new employer would reduce your costs. If you start your own business or work for another company that doesn't provide primary health insurance you will be assessed a penalty if you don't take Medicare B at age 65. 

Modified Adjusted Gross Income

MAGI Determination Medicare Part B & D premiums are determined by your Modified Adjusted Gross Income (MAGI). The more you earn the higher your Part B and D premiums. For most beneficiaries, the government pays a substantial portion—about 75 percent—of the Part B premium, and the beneficiary pays the remaining 25 percent. If you’re a higher-income beneficiary, you’ll pay a larger percentage of the total cost of Part B and D based on the income you report to the Internal Revenue Service (IRS). You’ll pay monthly Part B premiums equal to 35, 50, 65, or 80 percent of the total cost, depending on what you report to the IRS. Generally, your Modified Adjusted Gross Income (MAGI) is the total of your household's Adjusted Gross Income plus any tax-exempt interest income you may have (these are the amounts on lines 37 and 8b of IRS from 1040).
For more in-depth information on Medicare B including information and Tricare for Life read What to Consider Before Enrolling in Medicare B (Part 2) Also read the article titled Should You Change to a Lower Cost FEHB Plan When You Sign Up For Medicare.

How to have Medicare Premiums for Part B deducted from your annuity if you don't receive Social Security:

If you are not receiving social security benefits, you can have Medicare premiums withheld from your annuity payments. OPM must receive a request for the withholding from the Centers for Medicare and Medicaid Services. They cannot withhold premiums based on your direct request or even one from the Social Security Administration. However, the social security district office may be able to give you additional information.

Medicare phone number: 1-800-MEDICARE (!-800-633-4227)

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. Medicare managed care plans provide all the benefits that Original Medicare covers. Some cover extras, like prescription drugs. You can enroll in a Medicare Advantage plan to get your Medicare benefits. Medicare Advantage is the term used to describe the various private health plan choices available to Medicare beneficiaries.

If you sign up for Medicare Advantage Part C FEHB coverage isn't necessary.  if you are considering a Medicare Advantage Plan, Part C, instead of the Original Plan, DON'T drop your FEHB, instead suspend with proof of signing up for the Medicare Advantage Plan so you can get your FEHB back the next open season if the coverage doesn't work out.  Annuitants can call OPM's Retirement Information Office at 1-888-767-6738 to obtain a suspension form. Callers within the local Washington, DC calling area must call 202-606-0500. Section 9 of your FEHB plan covers the different Medicare options and what costs they will waive and pay when you sign up.  Your health plan may also offer a booklet on this subject that will help you understand the impact.

To learn more about enrolling in a Medicare Advantage plan, contact Medicare at 1-800-MEDICARE (1-800-633-4227) or at www.medicare.gov.

Medicare MA Plans  Medicare Advantage Plan Primer – What You Need to Know

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, or call them at 1-800-772-1213 (TTY 1-800-325-0778).
 

Should I Enroll in Medicare

 

The decision to enroll in Medicare is yours. OPM encourage you to apply for Medicare benefits 3 months before you turn age 65. It's easy. If you do not apply for one or more Parts of Medicare, you can still be covered under the FEHB Program. Visit their website for forms and additional information.

If you can get premium-free Part A coverage, OPM advises you to enroll in it. Most Federal employees and annuitants are entitled to Medicare Part A at age 65 without cost. When you don't have to pay premiums for Medicare Part A, it makes good sense to obtain coverage. It can reduce your out-of-pocket expenses as well as costs to FEHB, which can help keep FEHB premiums down.

Everyone is charged a premium for Medicare Part B coverage. The Social Security Administration can provide you with premium and benefit information. Review the information and decide if it makes sense for you to buy the Medicare Part B coverage. For additional information on Medicare B here is list of articles that will help you decide:

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 private health plan choices available to Medicare beneficiaries. The information in the next few pages shows how we coordinate benefits with Medicare, depending on whether you are in the Original Medicare Plan or a private Medicare Advantage Plan.

Medicare Premiums

Usually monthly premiums for Medicare Part A (Hospital Insurance) are free if you or your spouse paid Medicare taxes while working. This is referred to as  "premium-free Part A." If you must buy Part A, it will cost you up to $411 each month.

Most people get Part A without having to pay a premium. Premiums for Part A are free at 65 if:

  • You already get retirement benefits from Social Security or the Railroad Retirement Board.
  • You're eligible to get Social Security or Railroad benefits but haven't filed for them yet.
  • You or your spouse had Medicare-covered government employment.

If you're under 65, you can get premium-free Part A if:

  • You got Social Security or Railroad Retirement Board disability benefits for 24 months.
  • You have End-Stage Renal Disease (ESRD) and meet certain requirements.

In most cases, if you opt to purchase Part A, you must also take Medicare Part B and pay a monthly premium for both.

 

Medicare Part B 2025 Income Adjusted Premiums

 

More than 71 million Americans will see a 2.5% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2025. This includes federal annuitants under the Federal Employees Retirement System (FERS) and Many under the old Civil Service Retirement System (CSRS).

If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

Part B Premiums

There are separate Part B income-adjusted rates for:

  • high-income beneficiaries who only have immunosuppressive drug coverage

  • Premiums for high-income beneficiaries with full Part B coverage who are married and lived with their spouse at any time during the taxable year but file a separate return, and for

  • Premiums for high-income beneficiaries with immunosuppressive drug only Part B coverage who are married and lived with their spouse at any time during the taxable year but file a separate return

 

Medicare Part D 2025 Coverage

 

A beneficiary’s Part D monthly premium has been based on his or her income. These income-related monthly adjustment amounts affect roughly 8 percent of people with Medicare Part D. These individuals will pay the income-related monthly adjustment amount in addition to their Part D premium. Part D premiums vary per plan regardless of how a beneficiary pays their Part D premium, the Part D income-related monthly adjustment amounts are deducted from Social Security benefit checks or paid directly to Medicare.

Medicare Part D Income-Related Monthly Adjustment Amounts

Part D Premiums

There are separate Part D income-adjusted rates for Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year but file a separate return.

Medicare Claim Number Code (Prefix)

Your Medicare claim number is your Social Security number followed by one of the suffixes listed below. The suffix identifies your benefit status.

  • A – Primary Claimant (wage earner)
  • B – Spouse (spouse of retired worker)
  • B1 – Aged Husband, age 62 or over
  • B2 – Young Wife, with a child in her care
  • B3 – Aged Wife, age 62 or over, second claimant
  • B5 – Young Wife, with a child in her care, second claimant
  • B6 – Divorced Wife, age 62 or over
  • BY – Young Husband, with a child in his care
  • C1-C9 – Child (includes minor, student, or disabled child)
  • D – Aged Widow age 60 or over
  • D1 – Aged Widower, age 60 or over
  • D2 – Aged Widow (2nd claimant)
  • D3 – Aged Widower (2nd claimant)
  • D6 – Surviving Divorced Wife, age 60 or over
  • E – Widowed Mother
  • E1 – Surviving Divorced Mother
  • E4 – Widowed Father
  • E5 – Surviving Divorced Father
  • F1 – Parent (father)
  • F2 – Parent (mother)
  • F3 – Stepfather
  • F4 – Stepmother
  • F5 – Adopting Father
  • F6 – Adopting Mother
  • HA – Disabled Claimant (wage earner)
  • HB – Aged Wife of Disabled Claimant, age 62 or over
  • HC – Child of Disabled Claimant
  • M – Uninsured – Premium Health Insurance Benefits (Part A)
  • M1 – Uninsured – Qualified For (but refused health insurance benefits – Part A)
  • T – Enrolled in Medicare but temporarily delayed Social Security Retirement Benefits or Uninsured – Entitled to Health Insurance Benefits (Part A) under deemed or renal provisions
  • TA – Medicare Qualified Government Employment (MQGE)
  • TB MQGE – Aged Spouse
  • W – Disabled Widow
  • W1 – Disabled Widower
  • W6 – Disabled Surviving Divorced Wife
  • WA – Railroad Retirement

TriCare For Life

If you are retired military or a military spouse and have TriCare you must sign up for Medicare Part B in the 3 months before turning 65 in order to continue with TriCare for life. TriCare participants are able to suspend their FEHB enrollment if they wish after retiring from federal service; federal  employees can't suspend FEHB coverage while still working. 

The time you had with TriCare counts towards the 5 years of FEHB coverage that participants must have to carry FEHB coverage into retirement and you must be enrolled in a FEHB plan at retirement to be able to suspend it. If you choose to stay with TriCare and suspend FEHB participation as a civilian retiree, you can sign back up for FEHB during any subsequent open season should you need private insurance coverage. This would be desirable if health care providers are not taking new Medicare/TriCare patients when you move to a new location or otherwise lose your doctor. "

Signing Up for Medicare

If you are retired and receiving Social Security you will automatically be enrolled in Part A and B and should receive your Medicare card three months before your 65th birthday. If you decide not to take Part B follow the instructions that you receive with your enrollment package.

If you aren't receiving Social Security you have a 7 month Medicare enrollment window that starts 3 months before your birthday.  You can sign up online at https://www.socialsecurity.gov/medicare/apply.html or you can visit your local Social Security Office to apply. Call 1-800-772-1213 for additional information and assistance. You can also sign up for Medicare at https://www.medicare.gov under the "New to Medicare" section. It takes about 15 minutes to register and sign up online.

If you sign up the month you turn 65 or during the last 3 months of your Initial Enrollment Period, your coverage starts the first day of the month after you sign up.

If you are retired but covered under a working spouse’s medical plan or you are still working, sign up for Part A and then advise them that you do not want part B because you are covered by your employer or under a working spouse plan as the case may be.  All current federal employees and those retirees with new employer health care coverage or are covered under their spouse should elect this when they turn 65 to delay Part B without penalty until their working spouse retires,  or they leave federal service, or their new employer.

 

How to withdraw from Medicare Part B After Signing Up?

You can withdraw from Medicare Part B at any time if desired. Once you withdraw from Medicare B you would have to notify your FEHB provider, Blue Cross Blue Shield in your case, immediately because they would revert back to primary provider for medical services. To cancel Medicare Part B coverage you will have to use form CMS-1763. This form isn’t available online and you must contact your Social Security Administration office to complete the form. They will discuss the consequences of canceling your coverage, including how penalties are accessed, and process the form for you over the phone. The Social Security FAQ titled How do I terminate my enrollment with Medicare Part B when I have other health insurance explains the process in more detail. Typically your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it.

How a CSRS retiree can have Medicare premiums withheld from their annuity payment?

If you are eligible for Medicare and not eligible for Social Security, you can have Medicare premiums withheld from your annuity payments. OPM must receive a request for the withholding from the Centers for Medicare and Medicaid Services. They cannot withhold premiums based on your direct request or even one from the Social Security Administration. The request must come from the Centers for Medicare and Medicaid Services (CMS) to withhold Medicare premiums from annuity payments. 

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