Do Federal Retirees Need Medicare Part B With FEHB?

Most federal retirees do not need Medicare Part B to keep their FEHB coverage. The Office of Personnel Management confirms that your Federal Employees Health Benefits plan continues whether or not you enroll in Medicare.¹ Enrolling in Part B is usually a financial decision rather than a coverage one: Medicare becomes the primary payer on outpatient claims and your FEHB plan often waives what it would otherwise charge, which can offset the $202.90 standard monthly premium in 2026.² The exceptions matter. Military retirees on TRICARE For Life, most postal retirees under the new Postal Service Health Benefits Program, and most CHAMPVA beneficiaries must enroll in Part B or lose their coverage.

What Happens If You Skip Part B

If you keep FEHB into retirement and decide not to take Part B, your FEHB plan simply keeps working the way it always has. Same network, same premiums, same deductible and copays listed in your plan brochure. OPM is explicit that coverage does not depend on Medicare enrollment.¹

Two costs come with that choice. First, you pay full FEHB cost-sharing on every claim, because there is no primary Medicare payment to reduce the bill. Second, a late enrollment penalty starts accumulating for each year you were eligible for Part B but did not sign up. Retirees in good health who rarely use specialists sometimes come out ahead in the short run, but the penalty is permanent once it applies.

How FEHB and Part B Work Together

When you carry both, Medicare pays first on outpatient care: generally 80 percent of the approved amount after the annual deductible. Your FEHB plan then reviews the remaining balance as the secondary payer and covers most or all of it, depending on the plan.³

The practical effect is that many FEHB carriers waive their deductible and office-visit copays entirely for members who have Part B, since Medicare has already paid the bulk of the claim.⁴ For someone who sees multiple specialists or has frequent imaging or lab work, the eliminated copays and coinsurance can easily exceed the $2,434.80 you would pay in standard annual premiums.

Some plans go further and reimburse part of the Part B premium itself. Under the Postal Service Health Benefits Program, OPM reports that plans may reimburse up to $1,800 per year, with the amount varying by carrier and plan level.⁵ Traditional FEHB plans offer similar Medicare-wrap options with varying benefits.

What Part B Costs in 2026

The standard Part B premium in 2026 is $202.90 per month, and the annual deductible is $283.² Higher-income retirees pay more through the Income-Related Monthly Adjustment Amount (IRMAA), based on modified adjusted gross income from two years earlier. Your 2024 tax return determines your 2026 premium.

For individuals filing single returns, the 2026 monthly premiums are:²

$109,000 or less: $202.90
$109,001 to $137,000: $284.10
$137,001 to $171,000: $405.80
$171,001 to $205,000: $527.50
$205,001 to $499,999: $649.20
$500,000 or more: $689.90

For couples filing jointly, each threshold roughly doubles, with no surcharge up to $218,000 in joint income. The surcharge applies per person, so both spouses each pay a premium set by the joint return.

The Late Enrollment Penalty Trap

If you miss your Initial Enrollment Period and any Special Enrollment Period you qualified for, Part B adds a permanent 10 percent surcharge for every full 12-month period you were eligible but not enrolled.⁶ A retiree who waits five years past their enrollment window pays 50 percent more than standard, an extra $101.45 per month at 2026 rates, for as long as they have Part B.

Here is the piece federal retirees miss most often. FEHB coverage after you retire is based on former employment, not current employment. Medicare’s Special Enrollment Period protection applies only to people covered through a current job. Once you retire, your FEHB plan does not stop the late-penalty clock, even though the coverage itself continues.⁷

If You’re Still Working Past 65

Active federal employees can delay Part B without penalty. While you are still working, FEHB is your primary insurer based on current employment and Medicare is secondary.⁷ OPM notes that deferring Part B in this situation avoids paying a premium for coverage you do not need yet.⁸

When you retire or otherwise lose your employer group coverage, an eight-month Special Enrollment Period opens for you to sign up for Part B without a late penalty.⁷ The window begins the month after employment ends or group coverage stops, whichever comes first. Miss it, and you wait for the next General Enrollment Period (January 1 through March 31) and take the surcharge.⁹

Programs Where Part B Is Required

Optional does not apply to everyone. A few federal health programs treat Part B enrollment as a condition of keeping the coverage.

TRICARE For Life

Military retirees eligible for both TRICARE and Medicare must enroll in Part A and Part B to keep their TRICARE benefits. TRICARE For Life is structured as a Medicare wraparound, paying after Medicare on covered services, and this applies regardless of age or where you live.¹⁰ Drop Part B or never enroll, and you lose TRICARE entirely.¹¹

Postal Service Health Benefits Program

The Postal Service Reform Act of 2022 created the Postal Service Health Benefits (PSHB) Program, which took effect in 2025. Most postal retirees who become entitled to Medicare Part A after January 1, 2025, must also enroll in Part B to remain in PSHB.¹² Limited exceptions apply: postal annuitants who retired on or before January 1, 2025, and were not already enrolled in both Part A and Part B on that date are generally exempt, as are retirees receiving workers’ compensation benefits who have been determined unable to return to duty.¹³

CHAMPVA

Most CHAMPVA beneficiaries who become entitled to Part A must also enroll in Part B to keep their CHAMPVA eligibility.¹⁴ The main exception is for people who were 65 or older before June 5, 2001, and had Part A but never enrolled in Part B; they may keep CHAMPVA as secondary to Part A alone. Beneficiaries over 65 who are not entitled to Part A at all also keep CHAMPVA without Part B.¹⁵

What About Part D?

Part D is a separate question with a simpler answer. All FEHB plans are required to provide prescription drug coverage that meets Medicare’s “creditable coverage” standard, so your FEHB drug benefits are at least as good as a standard Part D plan.¹⁶ You do not need to sign up for Part D, and you will not face a Part D late enrollment penalty as long as you keep FEHB.

Help Paying the Premium

Retirees with limited income may qualify for a Medicare Savings Program that covers some or all of the Part B premium. The three main programs are Qualified Medicare Beneficiary (QMB), which also covers deductibles, copays, and coinsurance; Specified Low-Income Medicare Beneficiary (SLMB), which covers the premium only; and Qualifying Individual (QI), which also covers the premium only and requires annual reapplication on a first-come, first-served basis. Income and resource limits are set at the federal level, but some states use higher thresholds, so contact your state Medicaid office even if you are slightly above the federal floor. Enrolling in a Medicare Savings Program can also eliminate the late enrollment penalty, which matters for retirees who delayed signing up.¹⁷

1
U.S. Office of Personnel Management. I’m Eligible for Medicare
2
Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
3
Medicare. Who Pays First
4
Medicare. Coordination of Benefits – Getting Started
5
U.S. Office of Personnel Management. Cost Savings for PSHB Enrollees with Medicare Part B or Medicare Advantage in 2025
6
Centers for Medicare & Medicaid Services. Original Medicare Part A and B Eligibility and Enrollment
7
Medicare. Working Past 65
8
U.S. Office of Personnel Management. Active Federal Employee – Medicare
9
Social Security Administration. When to Sign Up for Medicare
10
TRICARE. TRICARE For Life
11
TRICARE. Beneficiaries Eligible for TRICARE and Medicare
12
Federal Register. Postal Service Reform Act – Establishment of the Postal Service Health Benefits Program
13
U.S. Office of Personnel Management. PSHB Annuitant – Medicare
14
eCFR. 38 CFR 17.271 – Eligibility
15
U.S. Department of Veterans Affairs. CHAMPVA Guide
16
U.S. Office of Personnel Management. Health Plans
17
Medicare. Medicare Savings Programs