Medicare Part B is one of the few retirement choices where the default answer is wrong for some federal employees and retirees and right for others. Coverage under the Federal Employees Health Benefits (FEHB) Program already pays for most doctor and hospital bills, so adding a monthly Part B premium can look like paying twice. For some enrollees it is. For others, the premium is largely offset by what the health plan gives back or stops charging.
The answer depends on a handful of numbers, and most of them are in the plan brochure. This framework walks through the questions in order, using 2026 premium figures from the Centers for Medicare & Medicaid Services (CMS), so the decision comes down to arithmetic instead of a coin flip.
Start With One Question: Are You Still Working?
For an active federal employee, FEHB coverage is generally the primary payer, and the Office of Personnel Management (OPM) says an active employee can defer Part B until retirement. A Special Enrollment Period, which generally lasts eight months after current-employment coverage ends, can allow Part B enrollment without the late-enrollment penalty. Part A is premium-free for most people, so many employees still on the job sign up for Part A and wait on Part B.
Retirees do not have that safety valve. Once you are retired and past your Initial Enrollment Period, delaying Part B without current-employment coverage can mean waiting for the General Enrollment Period (January 1 through March 31) and paying a penalty. That is why the decision is mostly a retirement-window decision. For the full enrollment rules, see how FEHB and Medicare coordinate benefits.
What Part B Costs in 2026
CMS set the standard Part B premium at $202.90 per month for 2026, which is $2,434.80 a year. The annual Part B deductible is $283, and Medicare generally pays 80 percent of covered services after that. The premium is typically deducted from a Social Security payment or, for annuitants who are not receiving Social Security, may be deducted from the federal annuity.
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CMS usually publishes the next year’s premium in November. The figures in this article use 2026 amounts, and the Medicare premiums page tracks the official update when it arrives.
The Decision Table: FEHB Alone vs. FEHB Plus Part B
The most important fact in this decision is easy to miss: adding Part B does not lower your FEHB premium. Part B is an add-on cost. It is offset only by what your plan reimburses or waives once Medicare becomes primary.
The table below uses hypothetical reimbursement amounts to show how the math works. The real number for a given plan is in the Medicare section of that plan’s brochure or in OPM’s plan comparison tool.
| Plan reimbursement of Part B premium (hypothetical) | Part B premium (2026) | Net annual cost of adding Part B | Out-of-pocket costs Part B must save to break even |
|---|---|---|---|
| $0 | $2,434.80 | $2,434.80 | $2,434.80 |
| $600 | $2,434.80 | $1,834.80 | $1,834.80 |
| $1,200 | $2,434.80 | $1,234.80 | $1,234.80 |
| $2,434.80 (full premium) | $2,434.80 | $0 | None; Part B costs nothing net |
Here is how to read it. If a plan reimburses nothing, Part B has to save at least $2,434.80 a year in deductibles, coinsurance, and copayments for the premium to pay for itself. A year with major surgery or a hospital stay can clear that bar. A year of routine visits and generic prescriptions usually will not. Some plans also waive deductibles, coinsurance, and copayments when Medicare is primary, and those waived amounts count on the savings side of the ledger.
There is a second comparison worth running. Having Part B can make it easier to move to a lower-premium FEHB plan that coordinates well with Medicare. In that case the real question is current plan alone versus a cheaper plan plus Part B. The FEHB premium rates page is the place to compare.
Questions That Tip the Decision
- Does your plan reimburse part of the Part B premium? This is usually the biggest swing factor, and it varies widely by plan.
- Does your plan waive cost-sharing when Medicare is primary? Waived deductibles, coinsurance, and copayments are the savings that offset the premium.
- How much care do you expect to use? Heavy users gain the most. Medicare does not set a fixed annual visit limit on medically necessary outpatient therapy the way some FEHB plans do, so check your brochure’s visit caps if you expect ongoing therapy.
- Do you want a Medicare Advantage plan through FEHB? Medicare Advantage requires both Part A and Part B.
- What is your income? Higher-income enrollees pay more for Part B, which changes the break-even math (see the IRMAA section below).
- Are you a Postal Service annuitant? Certain Medicare-eligible Postal Service annuitants and family members must enroll in Part B to keep Postal Service Health Benefits (PSHB) coverage, subject to statutory exceptions, so the choice may not be optional.
- Can you absorb the downside of waiting? The late-enrollment penalty is permanent, as the next section shows.
What Waiting Can Cost
The Part B late-enrollment penalty is 10 percent of the standard premium for each full 12-month period you could have had Part B but did not, and it lasts for as long as you have Part B. Two years of delay adds 20 percent. At the 2026 standard premium, that is $40.58 a month, or about $487 a year, for life. Because the penalty is a percentage of the standard premium, it also rises whenever the premium does.
That penalty is the real cost of choosing wrong in one direction. The cost of choosing wrong in the other direction is the net premium from the table above, and unlike the penalty, it can stop if Part B is later dropped. For a retiree without a Special Enrollment Period, the two risks are not symmetrical.
How Income Changes the Math
The Income-Related Monthly Adjustment Amount (IRMAA) raises the Part B premium for higher-income enrollees. It is generally based on the modified adjusted gross income (MAGI) on the tax return from two years earlier. The 2026 tiers from CMS are below.
| MAGI, single filers | MAGI, joint filers | Monthly Part B premium | Annual Part B premium |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | $2,434.80 |
| More than $109,000 up to $137,000 | More than $218,000 up to $274,000 | $284.10 | $3,409.20 |
| More than $137,000 up to $171,000 | More than $274,000 up to $342,000 | $405.80 | $4,869.60 |
| More than $171,000 up to $205,000 | More than $342,000 up to $410,000 | $527.50 | $6,330.00 |
| More than $205,000 and under $500,000 | More than $410,000 and under $750,000 | $649.20 | $7,790.40 |
| $500,000 or more | $750,000 or more | $689.90 | $8,278.80 |
Married enrollees who file separately and lived with a spouse during the year face steeper tiers: $649.20 a month above $109,000, and $689.90 at $391,000 or more.
For the decision, the point is that plan reimbursements are fixed dollar amounts while IRMAA is not. A higher tier makes the net cost of Part B larger, so the break-even bar rises. Enrollees who take Medicare drug coverage also pay a separate Part D adjustment of $14.50 to $91.00 a month at the same income tiers.
Because the look-back runs two years, a large Roth conversion or TSP withdrawal can raise the premium two years later. In the other direction, retirement can lower income sharply. People whose income dropped because they stopped working can ask the Social Security Administration (SSA) to use a more recent year, so contact SSA if the premium is based on a salary that has ended.
A Simple Way to Decide
- Step one: open the Medicare section of your FEHB or PSHB brochure and note any Part B premium reimbursement and any waived cost-sharing.
- Step two: take your Part B premium ($2,434.80 a year at the standard 2026 rate, or your IRMAA tier) and subtract the reimbursement. That is the net cost.
- Step three: estimate a realistic and a bad year of out-of-pocket costs under your current plan, using last year’s explanation of benefits as a starting point.
- Step four: price a lower-cost plan that coordinates with Medicare, using the premium rates page.
- Step five: weigh the permanent late-enrollment penalty against the net cost, especially if you have no Special Enrollment Period.
Where Part B Tends to Fit and Where It Does Not
Part B tends to make sense when the plan reimburses a large share of the premium, when the plan waives most cost-sharing under Medicare, when expected medical use is high, when a Medicare Advantage option through FEHB is the goal, or when the PSHB requirement applies.
Skipping or delaying it can be reasonable while FEHB is primary through current employment, or when a plan offers no reimbursement, health needs are modest, and the penalty and Special Enrollment Period rules have been checked first. This is educational information, not personalized advice, and it is worth confirming details with your plan brochure, OPM, and SSA before acting.
The open season window for changing FEHB plans is covered on the FEHB open season page, and the full list of Medicare costs is on Medicare’s official costs page.