For many federal employees, healthcare is one of the biggest unknowns in retirement.
A common question is:
How much will FEHB actually cost me once I retire?
The answer depends on your plan, coverage type, and whether you enroll in Medicare.
The Short Answer
You will continue to pay monthly FEHB premiums in retirement, just like you do while working.
The government continues to subsidize a large portion of the cost.
What You Pay vs What the Government Pays
In retirement:
- You pay roughly 25%–30% of the premium
- The government pays the remaining 70%–75%
This is the same structure as when you are an active employee.
Typical FEHB Premium Ranges
Monthly costs vary widely depending on your plan:
Self Only
- ~$150 to $400/month
Self Plus One
- ~$350 to $800/month
Family
- ~$400 to $1,000+/month
These are rough ranges and depend on:
- Plan type (HMO vs PPO)
- Coverage level
- Location
Annual Cost Example
Family plan at $800/month:
$800 × 12 = $9,600/year
This is a major recurring expense that must be included in your retirement plan.
What Happens at Age 65?
At 65, you become eligible for Medicare.
You now have a decision:
- Keep FEHB only
- Add Medicare Part B
- Coordinate both
FEHB + Medicare Strategy
Many retirees choose:
- FEHB + Medicare Part A (automatic, no cost)
- Optional Medicare Part B (additional premium)
Medicare Part B Cost
- ~$170–$600/month depending on income
This is in addition to FEHB premiums.
Why People Keep FEHB
Even with Medicare, many retirees keep FEHB because it provides:
- Nationwide coverage
- Lower out-of-pocket costs
- Coverage for spouses
- Flexibility outside the VA system
Total Healthcare Cost Example
Age 65+ scenario:
- FEHB: $800/month
- Medicare Part B: $200/month
Total:
$1,000/month healthcare cost
Why This Matters
Healthcare costs can:
- Reduce your net retirement income
- Increase over time
- Impact your withdrawal strategy
Many retirees underestimate this expense.
5 Common Mistakes
- Ignoring FEHB in retirement planning
- Assuming costs stay the same
- Not understanding Medicare coordination
- Dropping FEHB too early
- Not budgeting for long-term healthcare
How to Plan for FEHB Costs
- Include premiums in your monthly budget
- Model different plan options
- Compare FEHB-only vs FEHB + Medicare
- Adjust TSP withdrawals accordingly
Key Takeaway
FEHB is one of the most valuable benefits in federal retirement—but it is not free.
Understanding and planning for the cost is essential for a realistic retirement plan.
What to Do Next
Estimate your full retirement expenses:
Compare:
- Income vs healthcare costs
- Different retirement ages
- Medicare scenarios
Disclaimer
This article is for educational purposes only. Premiums and rules change annually. Always verify with official sources.