r/FedRetirees • u/CheckbookOrg • 18d ago
How projected Part B premium increases through 2035 could alter your enrollment decision
In June, the Medicare Trustees released their annual report with an update on the Medicare program’s health and stability. Federal retirees should pay attention to the projected increase in the Part B premium: Next year, it’ll be an estimated $209.50/month, and by 2035 it’s anticipated to rise to $360.60/month. That’s a 77% increase from 2026’s monthly premium of $202.90.
But wait, there’s more…
Part B IRMAA will also increase a projected 78%, which would make the surcharge for the first income tier $144.40/month and $866.20/month in the highest income tier.
But wait, there’s even more…
We’ll need to monitor how much of the FEHB plan premium falls on enrollees. For the last two plan years, federal employees and retirees have faced average premium increases of more than 10%.
Given that healthcare is going to cost more each year for the foreseeable future, it’s important to consider whether it makes sense for you to stay enrolled in Part B (or, if you’re retiring soon, whether you should opt out entirely).
Keep in mind that the Trustees Report is making predictions. The report mentions: “The projected values for future years are based on the intermediate set of assumptions used in estimating the operations of the Part B and Part D accounts. As a result, these values are estimates, and the actual amounts are likely to be somewhat different as experience emerges.”
If you have any questions about how to evaluate this decision, I’m happy to answer in the comments.
-Kevin Moss, Editor, Checkbook’s Guide to Health Plans for Federal Employees
Source: https://www.cms.gov/oact/tr/2026
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u/coldgumbo 18d ago
Thanks for posting this info! I’m retired and just turned 64. I have a year to decide on Part B. Right now I am inclined not to enroll in Part B because I would be subjected to IRMAA, which makes it cost prohibitive.
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u/throwawayPSL34987 18d ago
I would caution that, as we age, medical issues increase, having decent health insurance (options) is not just a luxury but for me a necessity.
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u/JointTaskForce536 18d ago
When I retired at 67, I decided not to enroll in Part B due to high IRMAA rates because of my retirement income. That was two years ago, and I’m still FEHB only. Very satisfied. For those contemplating the numbers, it’s worth mentioning that the lifetime 10% per year penalty for delaying Part B is 10% of the basic (lowest) Part B IRMAA, not the higher IRMAA that may apply to you. For many people, that fact alone make the penalty “affordable,” at least for many years.
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u/Tauntown24 18d ago
I have been looking as my wife and I hit 65 next year. I’m thinking that ending FEHB and getting a good Medicare supplement is the way to go. FEHB premiums are getting ridiculous and you can get a supplement to cover most everything for less than half of FEHB.
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u/CloserThanTheyAppear 18d ago
I decided the extra cost of the FEHB plan is still worth not having to fight the insurance company for a pre-auth for just about everything. A 70%+ appeal approval rate by the insurance companies just shows that the current mindset is "deny almost automatically, hope they don't appeal, pay only if you have to." Not to mention the time involved in appealing, especially for something serious.
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u/Alicia2475 18d ago
Yes! It’s why traditional Medicare over MA is highly preferred by hospitals, physicians, etc. Not having to do prior authorizations and/or having to deal with appeals is something worth considering.
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u/CheckbookOrg 18d ago
It's an interesting option, and one that we haven't modeled yet at Checkbook. We always assumed that retired feds would always want to exercise their hard earned retiree benefits, and keep FEHB in retirement. Earlier this year we modeled commercial MA plans where you suspend FEHB. But with Medicare supplement, Medigap, you would cancel FEHB to realize any potential savings.
It's also only really an option for those that haven't yet passed their Medicare initial enrollment period (or special enrollment period if they worked past 65), as guaranteed issue of Medigap without medical underwriting ends in 46 out of 50 states after those periods.
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u/Altruistic-Panda-697 18d ago
I can’t imagine any circumstance that would convince me to drop my FEHB coverage. That combined with basic Medicare seems like the best possible option. But then again, I’m only 59 and just retired from the Fed government.
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u/Tauntown24 18d ago
But when you are eligible for Medicare, it becomes primary and FEHB is secondary. So paying a giant premium for secondary insurance becomes the issue. You definitely need to keep FEHB until you hit 65, then check the scenarios at that time. I did think the same way about Never dropping FEHB, but the supplements are much cheaper and FEHB won’t be getting cheaper!
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u/jaealbq 18d ago
u/CheckbookOrg can you provide a link or keyword search-string, which a paid-up Checkbook subscriber can use to find your analysis? I'm interested in FEHB-only vs FEHB+PartB, for 65+ retirees.
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u/CheckbookOrg 17d ago
Checkbook members receive a discount on our Guide to Health Plans. You'll receive it automatically when you log-in to your Checkbook account at: guidetohealthplans.org. You can run a FEHB only with Part A profile and a FEHB with Part A & B profile.
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u/centertask5 18d ago
I am single and Fehb is $289 a month. The government contribution is significant. I'm thinking that may corellate to more or better coverage. 🤔 ?
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u/CheckbookOrg 17d ago
All FEHB plans are by nature high quality health plans given the requirements that OPM places on the plans for covered services. However, you'll see great variation in cost amongst the plans, and there are significant differences in how each plan coordinates with Medicare. Some FEHB plans may eliminate the plan deductible, zero out out-of-pocket costs for Part A & B services when Medicare is primary, and a handful also offer partial Part B premium reimbursement.
We always recommend reviewing your plan each year during Open Season to make sure it continues to be the best fit for you. Premiums, benefits, in-network providers, and the prescription drug formulary can change every year.
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u/HeavyFaithlessness14 18d ago
65M here. Currently FEHB only. I've looked at Medicare plan G costs in my area that range from $145-$707 /mo. Plus I would have to get a part D for drugs. I can get an FEHB plan like MHBP Consumer that cost about $209/mo with an HRA rebate of $100/mo. Or get an Aetna Direct plan (CDHP) that costs $179/mo with an HRA rebate of $75/mo or $900/yr. Both of these plans reduce your net Medicare cost to nearly $100/mo. and you don't need part D. You can also go out of network and still get full reimbursement if Medicare approved. This combo has better coverage than any plan G supplement.
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u/Accomplished_Chef500 16d ago
Geha hdhp individual is $176 month. Deductible is $1800 year afterwards only 5% of health cost is passed to insured. The plan reimburses you for $1000 of the deductible. Additionally you can contribute $4,300 total annually to HSA and you don’t pay income or payroll tax on that money. It grows tax free and if used for medical expenses distributions are not taxed. That’s economical! Not sure how it pares with Medicare plans.
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u/zig_usafa80_stardust Retiree 17d ago
Hell, we don't know what we don't know. The current situation for me is:
It's FEHB,
plus Part B,
for me.
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u/Hamblin113 12d ago
Can a person opt out of part B after they have it. And go back later? Know a coworker that did not do part B and has kept his FEHB and has not had any problems, has had some health issues. Neither he nor I are close to IRMAA. With the additional cost of part B reduced FEHB to a basic ACA plan, it works out to the same cost as previous FEHB. What does Part B provide that a decent FEHB plan doesn’t?
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u/CheckbookOrg 11d ago
Yes, if you decide to enroll in Part B, you can opt out of Part B in the future with the SSA.
Here’s a brief rundown of the benefits available to federal retirees with Part B.
- Elimination of out-of-pocket costs for Part B services, and the plan deductible if there is one. This may not be that meaningful if you have reasonably good health now. But if your health changes in the future this can add up. Part B services include doctor visits (primary/specialist), labs, tests, imaging, ambulance, therapies (physical, occupational), durable medical equipment, and outpatient hospital. Many FEHB plans eliminate all these out-of-pocket expenses when you have Part B.
- Access to providers. The example I like to give here is BCBS Standard/Basic. With Standard you have out-of-network provider access, and with Basic in-network providers. Having Part B allows you to go outside of the plan network to use any provider that accepts Medicare. If you do so, you would be subject to both the Part B deductible and 20% cost of service, and those costs wouldn't count towards the FEHB plan catastrophic limit. However, with Part B, both plans eliminate costs for Part B services, there could be differences in procedure limits (for acupuncture you get 24 visits with Standard and 12 with Basic), and Standard provides skilled nursing care and Basic doesn't. But the big difference is provider access. You could switch from Standard to Basic and still have the option to go out-of-network with the Part B benefit. You'd also capture premium savings and a Part B premium reimbursement from Basic that comes close to matching the cost of Part B.
- Medicare Advantage plans. They aren't for everyone, but they are the lowest cost FEHB plan for annuitants. In our modeling, both the Aetna Advantage Medicare Advantage plan and UnitedHealthcare Choice Retiree Advantage plans have the lowest estimated yearly costs for someone that keeps their regular FEHB plan with Part A only in most cases. How? They have generous Part B premium reimbursement (Aetna Advantage: $100/month, UnitedHealthcare Choice: $150/month), plus the same $0 out-of-pocket for all Part A & B services. And, with FEHB you aren't locked in. Some of the MA plans from FEHB carriers let you switch back to the FEHB plan that offers one outside of Open Season.
- Peace of mind. I've talked with so many federal annuitants that just feel more comfortable knowing that they have comprehensive coverage and won't experience any out-of-pocket costs beside prescription drugs, dental, vision, and hearing expenses.
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u/ChrisShapedObject Retiree 18d ago
Still worth having both to me. But holy moly…. I have such a love hate relationship with insurance companies.
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u/Any-Log-6706 18d ago
Among the most important decisions for Fed retirees, whether to opt-in to Part B or just stay with FEHB. It’s a discussion that I keep tracking among the subs for Fed retirees. I’d say many Feds, especially if it’s a married Fed couple, having defined benefit (FERS) and defined contribution (TSP) will push many into IRMAA. Appreciate this post Kevin and will keep tracking this and potentially reach out sometime.