How the Medicare Open Enrollment Period Affects Federal Retirees

The Medicare Annual Election Period (AEP) (also known as the Open Enrollment Period) is held annually from October 15 through December 7). During the AEP, individuals aged 65 and older and enrolled in Original Medicare (Medicare Part and Medicare Part B), can change their Medicare enrollment coverage. Any changes to Medicare coverage made during this year’s AEP will take effect on January 1, 2026.

This column discusses how the AEP affects federal retirees and the opportunities that federal retirees enrolled in Original Medicare have with respect to their health insurance coverage and choices offered through the Federal Employees Health Benefits (FEHB) program.

What Changes Can Be Made to Medicare Health Insurance or Drug Coverage for 2026 During the AEP?

Medicare beneficiaries can do the following during the AEP:

1. Join, switch or drop a Medicare Advantage Plan.

2. Join, switch or drop a Medicare prescription drug (Medicare Part D) plan, or

3. Switch from Medicare Advantage to Original Medicare.

It is important to explain what Medicare Advantage (MA) is and what MA 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 (Medicare prescription drug plan), 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 Original Medicare beneficiaries, including federal retirees. For 2026, the catastrophic drug spending limit is increased to $2,100 effective January 1, 2026.

How Does the AEP Affect Federal Retirees Enrolled in Original Medicare?

Federal retirees who are enrolled both in the FEHB program and in Original Medicare and who are considering enrolling in a Medicare Advantage plan for 2026 can enroll in a private MA plan during the AEP. However, the following are important considerations for federal retirees who are considering enrolling in a private MA plan:

• The FEHP program offers its own Medicare Advantage plans. A federal retiree who is enrolled in Original Medicare can enroll in a FEHB program sponsored MA plan during the 2026 FEHB program “open season” which runs from November 10,2025 through December 8, 2025. Enrollment in a MA plan through the FEHB program becomes effective January 1, 2026. Like other FEHB-program health plans, the federal government pays on average 72 to 75 percent of a federal retiree’s FEHB-program plan premium. If a federal retiree joins a private MA plan, the federal government contributes 0 percent of the premium costs.

• Federal retirees enrolled in an FEHB sponsored health plan and Original Medicare can enroll in a private MA plan during the AEP. To do so, the federal retiree must suspend his or her FEHB program enrollment. Suspending FEHB program enrollment means that the retiree is temporarily disenrolling from the FEHB program and is eligible to re-enroll in the FEHB program during a future FEHB program “open season.”

• 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 the spouse would have to be enrolled in Original Medicare in order to be included on the MA plan.

• During the last AEP in fall 2024, Medicare beneficiaries picking private MA plans faced some tough choices. The enrollment period for choosing an MA plan during the current AEP for 2026 is likely to be as difficult if not more difficult. For the second year in a row, private insurance companies that offered MA plans are getting rid of their Medicare Advantage plans or trimming popular benefits and increasing out-of-pocket costs such as deductibles and co-payments. Part of the reason behind this MA plan turmoil is that insurance companies offering MA plans have seen their profits squeezed by higher-than-expected medical spending and regulatory changes. According to HealthPilot (a brokerage that offers private MA plans), at least 1.2 million MA enrollees are likely to lose their 2025 MA plans for 2026 because the plans are being eliminated.

Federal retirees enrolled in Original Medicare and considering suspending 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 best meets their medical needs. Some insurance companies selling MA plans are also making hidden changes that affect the cost and quality of the MA plans they offer. Another factor to consider is that some insurance companies are cutting back on commission that they pay insurance agents and brokers to sell their MA plans, in particular less commission paid to sell less profitable MA plans that an insurance company does not want to grow. While these changes do not affect senior citizens including federal retirees, insurance agents and brokers tend to have no incentive to steer potential clients to purchase MA plans that do not pay any commission or minimum commission to an agent or broker.

Federal retirees who are considering enrolling in a private MA plan during the AEP are advised to do their homework to ensure they are seeing all of potential MA plan options. They should start by looking at the Medicare Plan Finder Tool. The nonprofit Medicare Rights Center maintains a national helpline at 1-800-333-4114.

During the AEP, federal retirees enrolled in Original Medicare can enroll in a private MA 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 by calling 1-800-MEDICARE can protect an enrollee in case there are any problems with the enrollee’s enrollment.