Medicare Part B Decision Calculator for Federal Employees (2026)

Should you enroll in Medicare Part B at $202.90/month when you already have FEHB coverage in retirement? The answer depends on your income (IRMAA surcharges can push the cost to $365–$610/month), how often you use healthcare, and how well your FEHB plan coordinates with Medicare.

This calculator does the arithmetic for your situation: annual Part B cost with your IRMAA tier, estimated reduction in FEHB out-of-pocket costs when Medicare is primary, and whether Part B pays for itself over 5, 10, and 20 years.

How the calculation works

The core question is simple: does the annual out-of-pocket reduction from Medicare coordination exceed the annual Part B premium cost?

When Medicare Part B is primary, it pays 80% of the Medicare-approved amount for covered outpatient services after the $283 annual deductible.¹ Your FEHB plan then pays secondary — often covering the remaining 20% entirely. The result is that most outpatient care costs near zero when you have both. The calculator estimates your OOP with Part B using a coordination benefit factor by plan tier:

• Good coordination plans (BCBS Standard, GEHA Standard, Aetna Direct, MHBP Standard): Waive their deductible and most copays when Medicare pays first. Saves roughly 85% of your current FEHB OOP costs.
• Average coordination plans: Standard secondary payer rules, some residual cost-sharing. Saves roughly 65% of your current FEHB OOP.
• Limited coordination plans (HDHP, restricted-network HMOs): Less favorable coordination mechanics or network conflicts with Medicare. Saves roughly 45% of current FEHB OOP.

These estimates are averages — your actual savings will vary based on the specific services you use. High-cost inpatient care typically generates the largest absolute savings; low-utilization retirees see minimal OOP reduction regardless of plan tier.

2026 IRMAA tiers: what high-income retirees actually pay for Part B

IRMAA (Income-Related Monthly Adjustment Amount) adds surcharges to Part B premiums for beneficiaries above certain income thresholds. It uses your MAGI from two years prior — so your 2026 Part B premium is based on your 2024 income.²

For federal retirees, MAGI includes FERS/CSRS annuity income (fully taxable), TSP traditional withdrawals (fully taxable), up to 85% of Social Security, and any investment income. A GS-15 retiree drawing a full annuity plus TSP distributions plus delayed Social Security can land in Tier 2 or Tier 3 — paying $365–$447/month instead of $202.90.

Source: CMS 2026 Medicare Parts A & B Premiums and Deductibles.²

The late enrollment penalty: a permanent surcharge

If you don't enroll in Part B when first eligible and later change your mind, you pay a permanent 10% monthly premium surcharge for each full 12-month period you delayed.¹

Important exception for active federal employees: If you are still working and enrolled in FEHB as an active employee (not retiree FEHB), your FEHB counts as employer-sponsored coverage. You have a Special Enrollment Period — 8 months after you retire — to enroll in Part B without penalty. Most federal employees who work past 65 use this window when they retire. Missing the 8-month window after retirement triggers the penalty permanently.

FEHB plans with the strongest Medicare coordination benefit

Not all FEHB plans coordinate equally with Medicare. The key language to look for in your plan brochure (Section 5, under "Coordination of Benefits") is whether the plan waives its deductible, copays, or coinsurance when Medicare Part B is the primary payer.

• BCBS Service Benefit Plan (Standard and Basic): Standard option waives most cost-sharing for Medicare primary enrollees, reducing OOP to near zero for many outpatient services. This is one of the most enrolled FEHB plans and one of the best Part B coordination plans.
• GEHA Elevate Plus and Standard: GEHA waives most outpatient cost-sharing when Medicare is primary. Good coordination for regular outpatient care.
• Aetna Direct CDHP: Designed as an HDHP alternative for Medicare-eligible retirees; Medicare coordination is a specific selling point.
• MHBP Standard and Value: Generally coordinates well with Medicare; waives most outpatient cost-sharing for Part B enrollees.
• HDHP plans (any carrier): HDHPs are efficient during active employment alongside an HSA. In retirement, once you enroll in Medicare, you can no longer contribute to an HSA — so the tax benefit disappears. And HDHPs typically have weaker Medicare coordination than their standard counterparts. Most federal retirees switch from HDHP to a standard option at retirement.

Verify your specific plan's current coordination language each open season. Plans occasionally change their Medicare coordination provisions, and open season (mid-November to mid-December) is your annual window to switch FEHB plans without a qualifying event.

When Part B is clearly worth it for federal retirees

• You have a chronic condition, take specialty drugs, or see multiple specialists regularly — high outpatient utilization produces large dollar savings from Medicare coordination.
• Your income is below $109,000 (single) or $218,000 (joint) — the standard $202.90/month premium is low enough that even moderate utilization makes Part B pay off.
• You're enrolled in BCBS Standard, GEHA, or another plan that waives its cost-sharing when Medicare is primary — you get near-zero OOP for covered services.
• You have a spouse also on FEHB self-plus-family — Part B benefits extend to the whole family plan.

When Part B may not pay off

• You're in excellent health with very low outpatient utilization — the $2,435 annual premium exceeds OOP savings at low utilization levels even with a good FEHB plan.
• Your income triggers Tier 3 or higher IRMAA — paying $365–$610/month for Part B requires very high healthcare utilization to break even.
• You were using an FEHB HDHP with an HSA — enrolling in Medicare (including Part A) disqualifies you from making further HSA contributions, eliminating a meaningful tax benefit.
• You live in a rural area with poor Medicare network coverage — FEHB as primary may be more practical.