Q: Why Don't My FEHBP Premiums Decrease When I Sign Up for Medicare Parts A and B?

A: Many people ask this question. They assume that, because Medicare is paying the preponderant share of their medical and hospital expenses, their FEHBP plans are paying out a lot less for them than they do for people who are not covered by Medicare. Therefore, they reason that their own FEHBP premiums should be reduced because of Medicare having assumed the role of the primary insurer. People often ask for separate FEHBP coverage for Medicare-eligible enrollees, or self-plus-one coverage, again assuming they will pay a lower premium than other retirees and employees pay.

There is no provision in law for an FEHBP-Medicare option or self + 1 in health plans. One thing to remember is that the FEHBP covers people over their lifetime in many medical circumstances. The plans do not charge different rates as your health and family circumstances change. These are group plans covering all group members.

More important, however, the facts of the matter do not support creation of an FEHBP-Medicare option. Data from OPM show that there are no significant savings in the FEHBP because retirees are covered by Medicare.

Therefore, the answer to the question, "Why don't my FEHBP premiums decrease when I sign up for Medicare?", is that there are not enough savings to the FEHBP because of enrollment in Medicare to justify lower the FEHBP premium.