During Medicare’s Open Enrollment (Annual Election) Period, those individuals enrolled in Medicare (Medicare “beneficiaries”) can change their coverage. Changing their coverage includes switching between Original Medicare (Medicare Part A and Medicare Part B) and Medicare Advantage (MA) and changing one’s Medicare D (prescription drug coverage) plans. Between October 15,2025 and December 7,2025, individuals may make multiple changes, with the last change submitted by December 7, 2025. All changes take effect on January 1, 2026.
Original Medicare, which consists of Medicare Part A (hospital insurance) and Medicare Part B (medical insurance), is offered directly through the federal government and run by the Centers for Medicare and Medicaid Services (CMS). MA plans provide Medicare benefits through private insurance companies who contract with the federal government.
Federal retirees become eligible for Medicare when they become age 65. About 70 percent of federal retirees do enroll in Original Medicare. In addition to being enrolled in Original Medicare, most federal retirees are eligible and keep their Federal Employees Health Benefits (FEHB) program health insurance in retirement.
Medicare Open Enrollment Period (OEP)
During Medicare’s Open Enrollment (Annual Election) Period, those individuals enrolled in Original Medicare can change their Medicare coverage, including switching between Original Medicare and MA and Medicare Part D plans.
It is important to explain what MA is and what an MA plan has to offer to federal retirees enrolled in Original Medicare. MA plans are health insurance plans administered by private insurance companies under rules set by the Center for Medicare and Medicaid Services (CMS). These plans offer an expanded number of health-care related insurance benefits. Most plans include in addition to medical care benefits, vision care, hearing care and dental benefits. One restriction is that an MA enrollee has to use health care providers, doctors, dentists, pharmacies and optometrists in the MA plan network in order to minimize any out-of-pocket costs. Also, an individual has to be enrolled in Original Medicare in order to enroll in an MA plan.
With respect to Medicare Part D (prescription drug coverage), this part of Medicare allows Medicare beneficiaries to have separate drug coverage to cover catastrophic drug expenses. As a result of the passage of the Inflation Reduction Act (IRA) in 2022, the catastrophic drug spending limit was lowered to $2,000, effective January 1, 2025. Medicare Part D prescription drug coverage may therefore be attractive to more Medicare beneficiaries including federal retirees. For 2026, the catastrophic drug spending limit is increased to $2,100 effective January 1, 2026.
Federal retirees enrolled in the FEHB program and also enrolled in Original Medicare are eligible to enroll in a private MA plan during the current OEP. To do so, they must suspend their FEHB program enrollment during the upcoming FEHB program “open season” (November 10,2025 through December 8,2025).
However, there are a number of factors that federal retirees enrolled in Original Medicare need to consider before suspending their FEHB program enrollment in order to enroll in a private MA plan and a Medicare Part D prescription drug plan. These factors are:
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- The FEHB program offers its own MA plans. Like other FEHB program health plans, the federal government pays on average 72 to 75 percent of a federal retiree’s FEHB-program MA plan premium . If a federal retiree joins a private MA plan, the federal government contributes 0 percent of the MA plan premium costs.
- If a federal retiree is married and the spouse is included in the retiree’s FEHB program coverage, then if the federal retiree enrolls in an FEHB program-sponsored MA plan or a private MA plan during the AEP, the spouse has to be enrolled in Original Medicare in order to be included on the Medicare Advantage plan.
- During the last AEP during fall 2024, federal retirees and other Medicare beneficiaries picking private Medicare Advantage plans faced some tough choices. The enrollment period for 2026 MA plan is likely to be as difficult if not more difficult for choosing a Medicare Advantage plan. Keep in mind that private insurance companies offer MA plans, paid by the federal government to offer these plans. For the second year in a row, large insurance companies are getting rid of some MA plans, cutting back on popular benefits, and increasing out-of-pocket costs such as deductibles. Behind this turmoil is that health insurance companies offering MA plans have seen their profits squeezed by higher-than-expected medical spending and regulatory changes. As a result, many of the biggest insurance plans offering MA plans are trying to improve their profit margins by dumping unprofitable products and by controlling costs better. The bottom line: MA plans in 2026 will likely be less appealing. The industry is projecting that enrollment in private MA plans will continue to shrink in 2026.
- For the second year in a year, the number of stand-alone Medicare Part D drug benefit plans is dropping significantly. The 2026 offerings will include 360 plans, down from 404 plans in 2025 and 709 plans in 2024. Both the stand-alone plans and the drug benefits offered through MA are also affecting Medicare Part D beneficiaries with higher charges. For example, drug deductibles, the amount that a Medicare Part D beneficiary pays up from before prescription drug coverage kicks in, are significantly increasing for many Part D beneficiaries. Finally, in a number of Part D plans, medications that now come with a flat copayment will, in 2026, require coinsurance, a charge that represents a percentage of the medication’s total cost.
Federal retirees enrolled in Original Medicare and considering the suspension of their FEHB program enrollment in order to enroll in a private MA plan should be aware that they are responsible for selecting an MA plan that meets their medical needs. The insurance companies that offer MA plans are also imposing some hidden changes that will affect the cost and quality of MA plans and Medicare Part D prescription drug plans. In addition, many of these insurance companies are cutting back on commissions that they pay insurance agents and brokers to sell MA plans, generally less commission paid to those agents and brokers who sell less profitable plans. While the cutbacks in commissions paid do not affect senior citizens purchasing MA plans, insurance agents and brokers tend to have no incentive to steer potential clients to MA plans that do not pay commissions or minimum commissions.
Federal retirees who are considering enrolling in a private MA program during the AEP are advised to do their homework to ensure that they understand all the options for an MA plan they have been advised to enroll in, including those MA plans that do not pay commissions. They should start by looking at the Medicare Plan Finder tool at https://www.medicare.gov/health-drug-plans/health-plans/your-health-plan-options/compare. The nonprofit Medicare Rights Center maintains a national helpline at 1-800-333-4114.
During the OEP ending December 7, 2025, federal retirees enrolled in Original Medicare can enroll in a private Medicare Advantage plan through the Medicare Plan Finder by calling 1-800-MEDICARE (1-800-633-4227), by contacting the plan directly, or through an agent or a broker. Enrolling directly through Medicare Plan Finder or calling 1-800 MEDICARE can protect an enrollee in case there are any problems with the enrollee’s enrollment. Federal retirees who enroll in a private MA plan during the AEP are reminded to suspend their FEHB program health insurance during the OPM “open season” occurring between November 10,2025 and December 8, 2025.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
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Ed Zurndorfer, EA, ATA, CFP®, CLU®, ChFC®, CEBS®, ChFEBC℠: Federal Employee Benefits Expert
A former career Federal employee, Ed has published a staggering 1,200+ separate articles on Federal Benefits and Retirement!
Just “Google” his name, and you are likely to find a plethora of sites that contain his writings. Drawn to its mission to reach, teach
and serve Feds, Serving Those Who Serve is the only financial planning practice with which Ed has chosen to affiliate in over
20 years teaching. In addition to conducting Federal Benefits seminars for Serving Those Who Serve, you can find Ed’s
writings here on our blog in the FedZone, and on Fed-Soup, MyFederalRetirement, FederalNews Radio and NITP.
He is a member of the Maryland Society of Accountants, the National Association of Enrolled Agents, the International Society of Certified Employee Benefits Specialists, the Financial Planning Association, the National Association of Health Underwriters,
and the Society of Financial Service Professionals. Since 1999, Ed has taught many thousands of Federal employees about
their benefits, in person and at Federal agencies all over the country. Ed is a true national treasure.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.