Author: Bob Braunstein, Federal Benefits Specialist

Federal retirees weighing their healthcare options have likely encountered two similar-sounding programs: Medicare Part C (Medicare Advantage) and FEHB (Medicare Advantage). While both are types of Medicare Advantage plans, they differ significantly in structure, eligibility, benefits, and coordination with other coverage. Understanding these differences will be critical for optimizing your healthcare coverage and costs.

Medicare Part C (Medicare Advantage):

Medicare Part C, commonly known as Medicare Advantage (MA), is an alternative to Original Medicare. Offered by private insurance companies approved by Medicare, these plans bundle Part A (hospital insurance) and Part B (medical insurance) and often include Part D (prescription drug coverage). 

Medicare Part C:

• Is available to any Medicare beneficiary enrolled in Parts A and B.
• Replaces Original Medicare coverage.
• Often includes extra benefits like dental, vision, and hearing.
• May have lower premiums than FEHB but can include copays and coinsurance.
• Enrollment allows FEHB enrollees with Medicare A and B to suspend their FEHB premiums.

FEHB (Medicare Advantage):

FEHB (Medicare Advantage) or FEHB MA plans are a newer option offered by some FEHB carriers, specifically designed for Federal retirees enrolled in both FEHB and Medicare Part A and B. These plans integrate Medicare Advantage benefits into the FEHB structure, allowing retirees to keep their FEHB coverage while benefiting from enhanced features. 

These plans are:

• Only available to eligible Federal retirees and annuitants who are enrolled in both Medicare A & B and an FEHB plan that offers a Medicare Advantage option.
• Plans may have lower premiums and eliminate most out-of-pocket costs for subscribers.
• Offered by major FEHB carriers like Aetna, Blue Cross Blue Shield, UnitedHealthcare, and others.
• Part of the FEHB program as opposed to Medicare.

Whether Medicare Part C (Medicare Advantage) is better than FEHB Medicare Advantage depends on your personal situation and the value you place on cost, coverage, and provider access. These and other important factors can vary considerably between the two coverages. 

More specifically, FEHB MA plans offer partial to full Part B premium rebates. They also waive cost-sharing – the annual deductible, copayments for provider visits, and coinsurance for medical tests, procedures, and services. More recently, FEHB MA plans have begun including free Medicare prescription drug coverage. And if you still have family members not yet enrolled in Medicare, FEHB MA plans offer them stand-alone coverage comparable to other non-MA FEHB offerings. FEHB MA plans do not stand alone and to be enrolled, one must pay the monthly premium for the plan that offers it.

In contrast and perhaps equally compelling to those who are relatively healthy when becoming Medicare eligible, Medicare C offers many premium free plans along with the same perks as FEHB MA plans like gym memberships, dental and vision coverage, and wellness programs.  Those who enroll in Medicare A and B can suspend their FEHB premiums when participating in a Part C plan.  But many of the plans have smaller networks and cost-sharing is still a subscriber responsibility. These plans can only cover Medicare A and B subscribers – so you would need to maintain your FEHB plan or other insurance for your non-Medicare eligible family members.

Final Considerations:

While both Medicare Part C and FEHB Medicare Advantage plans offer enhancements to Medicare A and B, they provide unique benefits, and you should weigh the differences between the two coverages carefully.  FEHB MA options blend the reliability of Federal employee coverage with the savings and enhancements of Medicare Advantage. They also offer stand-alone coverage for family members who are not enrolled in Medicare A and B. Part C plans can save enrollees a lot of money when they are healthy as many have no premiums and enrollees (with Medicare A and B) as well as offering dental, vision, and other perks usually not found in FEHB MA plans; but they only cover those with Medicare A and B and often have limited provider networks. As always, evaluating your specific healthcare needs, preferred providers, and financial situation will be key to making the best choice for your healthcare needs.

Bob Braunstein is a retired Federal employee who was last employed as a Senior Human Resources Consultant with the Office of the Comptroller of the Currency (OCC) at the Department of the Treasury. During his Federal career, he served in a full range of HR positions spanning recruitment, staffing, employee relations, retirement and benefits, and position classification/management disciplines.  He is a retirement and benefits instructor for NITP. 

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