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FEHB and Medicare Part D

How federal employee retiree health coverage works with Medicare — and whether you need Part D.

Quick answer for federal retirees

FEHB prescription drug coverage is creditable for Medicare Part D. Most federal retirees who keep their FEHB plan into retirement don't need to enroll in Part D because FEHB drug coverage is typically as good or better. However, you may want to consider Part D if your FEHB plan's drug coverage has limits or high costs that Part D could supplement.

How FEHB drug coverage works in retirement

The Federal Employees Health Benefits (FEHB) program offers some of the most comprehensive health coverage available in the country. Federal retirees who carried FEHB coverage for at least 5 years before retirement can typically continue their FEHB plan into retirement at the same group rates. FEHB plans include prescription drug coverage that is generally creditable for Medicare Part D — meaning it's at least as good as standard Part D coverage.

Because FEHB drug coverage is creditable, federal retirees can delay or skip Medicare Part D without facing a late enrollment penalty if they enroll in Part D later.

Should you enroll in Part D if you have FEHB?

For most federal retirees, the answer is no. Adding Part D on top of FEHB usually doesn't make financial sense because FEHB is already paying for your drugs. However, your specific situation matters.

You probably don't need Part D if:

  • Your FEHB plan covers your medications adequately
  • Your FEHB drug copays and out-of-pocket costs are reasonable
  • Your FEHB plan has a strong pharmacy network where you live
  • You're satisfied with your FEHB plan's formulary

You might want Part D if:

  • Your FEHB plan has a limited formulary that doesn't cover your specific medications well
  • You take very expensive medications and a Part D plan would significantly lower your out-of-pocket costs
  • You qualify for Extra Help, which dramatically reduces Part D costs
  • You're considering switching from FEHB to Medicare Advantage

Important: Don't drop FEHB to enroll in Medicare

If you suspend or cancel your FEHB coverage, getting it back can be complicated and may not always be possible. Federal retirees can suspend (but not cancel) FEHB to enroll in a Medicare Advantage plan, with the right to return to FEHB later. But this decision should be made carefully with help from a SHIP counselor or licensed Medicare agent — and never just to add Part D.

The Postal Service Health Benefits (PSHB) change

If you're a current or retired Postal Service employee, you should know that as of January 1, 2025, postal employees and retirees moved from FEHB to a separate program called the Postal Service Health Benefits (PSHB) program. PSHB has different rules around Medicare integration:

  • PSHB plans require Medicare Part B enrollment for most retirees age 64+ (with some grandfather exceptions)
  • PSHB plans typically include Medicare Part D coverage built in (called PSHB EGWP)
  • If you're enrolled in PSHB with the integrated Part D, you generally don't need a separate Part D plan

If you're confused about your PSHB status, contact USPS HR at 1-800-282-8783 or visit opm.gov/pshb.

How FEHB coordinates with Medicare

If you're enrolled in both FEHB and Medicare:

  • Medicare is generally primary for retirees enrolled in both
  • FEHB pays secondary, often picking up costs Medicare doesn't cover
  • The combination can result in very low out-of-pocket costs
  • Some FEHB plans waive deductibles and reduce copays for members enrolled in both Medicare A and B

Comparing your FEHB drug coverage to Part D

If you're trying to decide whether Part D might benefit you, here's how to compare:

  1. Look at your FEHB plan's drug formulary — see what tier each of your medications is on and what the copays are
  2. Calculate your annual drug costs under FEHB — premiums + deductible + copays
  3. Compare to a Part D plan using the Medicare.gov Plan Finder, entering your specific medications
  4. Don't forget the $2,100 Part D out-of-pocket cap — this protects you from high costs in any single year

If you decide to enroll in Part D later

Because FEHB is creditable, you can enroll in Part D during a future Annual Enrollment Period (October 15 – December 7) without a late enrollment penalty. Keep your FEHB plan's annual notice of creditable coverage in your records — you may need to prove FEHB was creditable if you face questions later.

You can also drop your FEHB drug coverage and switch to Part D, but this is rare. FEHB drug coverage is typically more comprehensive than standalone Part D plans.

If you do decide to add Part D

Federal retirees who decide to add a standalone Part D plan in addition to FEHB should compare carefully. PlanMatch lets you compare Part D plans based on your specific medications, or a licensed agent who works with federal retirees can analyze your FEHB drug coverage against Part D options.

Get personalized help

Federal retirees should consider getting personalized advice before making changes:

Frequently asked questions

Do federal retirees need Medicare Part D if they have FEHB?

Most don't. FEHB prescription drug coverage is creditable for Medicare Part D, meaning it's at least as good as standard Part D. You can keep your FEHB plan into retirement and skip Part D without facing a late enrollment penalty later.

Is FEHB drug coverage creditable for Medicare?

Yes. FEHB plans must provide drug coverage that meets or exceeds standard Medicare Part D, so all FEHB plans are considered creditable. Each year, your FEHB plan sends you a notice confirming creditable coverage status.

Should I drop FEHB to enroll in Part D?

Almost never. FEHB drug coverage is usually more comprehensive than standalone Part D, and FEHB also covers your medical expenses. Dropping FEHB to enroll in Part D is rarely a good financial decision and can be hard to reverse.

What is the Postal Service Health Benefits (PSHB) program?

Starting January 1, 2025, postal employees and retirees moved from FEHB to a separate Postal Service Health Benefits program. Most PSHB plans require Medicare Part B enrollment for retirees age 64+ and include integrated Part D coverage.

Can I enroll in both FEHB and Part D?

Yes, but most retirees don't because the FEHB drug coverage is already comprehensive. If you do enroll in both, your FEHB plan typically pays after Part D for prescription drugs.

Ready to take the next step?

There are several free ways to get help with your Medicare coordination questions:

You can also visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227)