The Help Desk

Your tough questions. MONEY's smart answers.
Presented by

Is my federal employee health plan a better deal than Medicare?

September 20, 2012: 6:30 AM ET

I am a retired federal government employee. My wife and I are covered through the Federal Employees Health Benefits Program (FEHB). I have been advised to not sign up for Medicare because the coverage overlaps and FEHB is a better deal. Is it? — Robert J.

The two programs cover similar expenses in many areas, but there are a number of important differences. For example, FEHB covers emergency care outside the United States, while Medicare covers certain orthopedics, prosthetics and medical supplies not covered by FEHB. "The right program is a matter of your individual circumstances and needs," says Ron Naumann of Oregon Pacific Financial Advisors in Medford, Ore.

There also can be some variation in FEHB benefits depending on what government group you worked for, according to Naumann. So be sure to contact your Office of Personnel Management administrator to get the details on your benefits.

That said, Naumann does suggest signing up for Medicare Part A as soon as you are eligible because it covers some hospital-related costs not covered by FEHB. What's more, Medicare Part A doesn't require a premium if you or your spouse have paid into Medicare for at least 10 years. For Medicare parts B, C and D, however, just remember that premiums are risk-adjusted, so the longer you wait to enroll, the higher the premiums you will have to pay.

In the end, Naumann says, if you can't afford or don't plan on buying Medicare part B, your FEHB plan is the more economical choice.

— Austin Kilham

Got a question for the Help Desk? Send it to

Posted in: Family Money, Retirement
Join the Conversation
Help Desk

Got a question about your money? We want to hear it! Each week we're answering your questions on CNN, Headline News and

Your email or phone number won't be published; we'll use it to get in touch if we need more information about your question.
Help Desk Video
  • NEXT
    Not enough money in America's 401(k)s
    Despite the surging stock market bringing balances to record highs, the average Fidelity 401(k) account has less than $100,000 in it. That's just not enough. Play
  • NEXT
    Explaining Obama's myRA
    President Obama unveiled a new savings plan for retirement accounts, aimed at encouraging people to start building their nest egg. But how exactly does it work? Play
  • NEXT
    Tricks on how to save in your 20s
    Saving for your retirement in your 20s doesn't have to be a financial burden. Prioritizing your expenses is usually the first step in building a nest egg. Play
  • BACK
    Don't get fooled by Black Friday sales
    Here are some of the tricks that retailers use to make you think you're getting a deal. Keep an eye out for them while shopping this Black Friday. Play
Best Tips
Some of the nation's leading business owners, investors, and thinkers share their thoughts on rebuilding your wealth. More
These strategies can help you manage the challenges -- both emotional and financial -- of helping an aging parent from afar. More
You don't need to be fanatical to get to 780. Those in the know say these moves matter most. More
Featured Newsletters

Tips for saving and spending smarter.

Search This Column
View all entries from this: Week, Month
Help Desk
More help for your career, your investments and your budget.
Powered by VIP.