Medicare Open Season decisions for federal retirees

1. Why Open Season is not optional for retirees

For most federal employees, Open Season is a working-years routine — check the new premiums, decide whether to switch, and move on. In retirement, the same window looks like a quiet annual housekeeping task. Reviewing the FEHB letter is something many retirees skip in favor of letting the current plan auto-renew.

That’s a mistake. Open Season is the one time each year when several federal retiree decisions are actually changeable. Skipping it means accepting whatever rises in premiums, formulary changes, or coverage shifts the carrier made for the new year — and Medicare Open Season also runs concurrently, with its own set of decisions about Part D, Medicare Advantage, and EGWP coverage that genuinely affect the household budget.

For 2026, the stakes are unusually high. FEHB premiums rose 12.3% on average — the second straight double-digit year after 2025’s 13.5% increase. Combined, that’s roughly a 25% premium hike in two years. Medicare Part D’s out-of-pocket cap rose to $2,100, making the Part D / EGWP option more attractive for retirees with substantial drug spending. And the new Postal Service Health Benefits (PSHB) program is in its second year of operation with its own rules. None of these are static.

Two windows govern the choices:

• FEHB Open Season: typically November 10 through December 8. For retirees, all changes are effective January 1, 2026 — with premium changes first appearing on the February 1, 2026 annuity payment.
• Medicare Annual Election Period (AEP): October 15 through December 7. All changes effective January 1.

They overlap, but they are separate. FEHB decisions are made through your retirement system; Medicare decisions are made through SSA or directly with the Medicare plan. A federal retiree may need to make changes in both windows in the same year — and most do not realize they’re handling two different processes.

2. The three decisions every year

Every federal retiree faces the same three categorical questions during Open Season. The answers may not change from year to year, but the questions need to be asked annually.

Decision 1 — Review your FEHB carrier and tier. Should you stay with your current FEHB plan? Switch to a different plan with the same carrier? Move to a different carrier entirely? Adjust your enrollment tier (self only, self plus one, self and family)? This is the most familiar Open Season decision.

Decision 2 — Medicare Part D and the EGWP option. If you’re Medicare-eligible (typically age 65+), should you enroll in your FEHB plan’s Employer Group Waiver Plan (EGWP) for prescription drug coverage? This carries you out of the FEHB drug benefit and into a Medicare-tied drug plan with a $2,100 annual out-of-pocket cap. It can be the biggest single change for a Medicare-eligible retiree.

Decision 3 — Suspending FEHB for Medicare Advantage or TRICARE. Should you suspend your FEHB enrollment entirely and switch to a private Medicare Advantage plan, TRICARE, or other eligible coverage? This is rarely the right move, but for specific retirees — particularly military retirees with TRICARE-for-Life — it can produce significant premium savings while preserving the right to come back to FEHB later.

The decision tree for a Medicare-eligible federal retiree:

For most retirees, only one or two of the three decisions actively change in any given year. But the decision tree still needs walking — knowing the right path matters whether or not you end up moving.

3. Decision 1 — Review your FEHB carrier and tier

The FEHB plan-review decision rests on three questions:

Are your prescriptions still on the formulary? Plans revise formularies every year. A medication that was tier 2 last year might be tier 3 this year, or removed entirely. If you take chronic medications, pull up the new year’s formulary on your carrier’s website and confirm coverage for every drug you currently fill. A formulary change is the single most common reason people who never switch should switch.

Is your provider network still intact? Hospital systems, physicians, and specialty providers come in and out of FEHB networks. Verify that your current doctors are still in-network for the 2026 plan. Out-of-network costs can dwarf premium differences.

Does your tier still match your household? Federal retirees often hold the same tier through life events — adult children aging out, a spouse becoming Medicare-eligible (which may reduce the tier needed), or a divorce. Each of these can shift the tier from self plus one or self and family back to self only, which often produces meaningful premium savings.

A few specifics for 2026:

The “switch is rarely done” reality. OPM data consistently shows that fewer than 5% of FEHB enrollees actually switch plans during Open Season — most stay with their current carrier even when better options exist. Premium increases of 12-13% over two consecutive years should prompt more retirees to compare, but inertia is the norm. The retirees who do switch typically save 10-25% on annual premiums for comparable coverage.

4. Decision 2 — Medicare Part D and the EGWP option

This is the decision where the biggest dollars often move for Medicare-eligible retirees, and it’s the one most likely to be misunderstood.

Since 2024, most FEHB plans have offered an Employer Group Waiver Plan (EGWP) — a Medicare Part D drug plan built specifically for FEHB plan enrollees. To win OPM approval, the EGWP must provide drug coverage equal to or better than the FEHB plan’s standard drug benefit. For 2026, the headline feature is the $2,100 out-of-pocket cap on covered drug costs (up from $2,000 in 2025), plus the $35/month insulin cap and $0 copays on ACIP-recommended vaccines (shingles, RSV, COVID, flu, pneumonia, Tdap).

How the EGWP works:

• Your FEHB plan continues to handle medical and hospital coverage
• The Part D EGWP takes over your prescription drug coverage entirely — replacing the FEHB plan’s drug benefit
• Premiums for the EGWP are often partially or fully subsidized by Medicare (roughly 75% of EGWP costs are paid by Medicare)
• You cannot pick and choose — you cannot keep FEHB drug coverage and also have the EGWP

The 2026 Part D structure simplified considerably:

When the EGWP makes sense:

Yes, consider EGWP if:

• Your annual out-of-pocket drug costs are likely to exceed $2,100
• You take insulin (the $35/month per-product cap is meaningful savings)
• Your FEHB drug benefit has high coinsurance on specialty drugs
• The EGWP formulary covers your specific medications well

Probably not, if:

• Your annual drug costs are low (under ~$1,000) and stable
• Your income is high enough to trigger Part D IRMAA at a level that erases the savings
• You live abroad part of the year — Medicare drug coverage doesn’t extend outside the U.S.

The IRMAA factor matters. Enrolling in Part D triggers a Part D IRMAA surcharge if your income exceeds the threshold ($109,000 single / $218,000 MFJ in 2026, based on a 2-year lookback to 2024 income). The first IRMAA tier for Part D is about $14.50/month — modest, but it adds up over a year. Higher tiers go up from there (Tier 5 reaches roughly $91/month). For most middle-income retirees, the IRMAA surcharge is small relative to the EGWP savings. For high-income retirees, the math can flip. (See IRMAA explained for the full mechanics.)

The EGWP / Part D decision is the largest annual dollar swing in most federal retirees’ Open Season. The $2,000 cap (now $2,100) is saving the average affected Medicare beneficiary over $1,500 a year on medications. For low-drug-cost retirees, the EGWP adds complexity without saving money. The answer depends entirely on your specific drug list.

5. Decision 3 — Suspending FEHB for Medicare Advantage or TRICARE

The third Open Season decision is the rarest but the highest-stakes: should you leave the FEHB program entirely in favor of other federal-eligible coverage?

This is a decision available to a small subset of retirees:

Military retirees with TRICARE or TRICARE-for-Life. Federal civilian retirees who also have military retiree status can suspend FEHB and rely on TRICARE for medical coverage. TRICARE-for-Life specifically pairs with Medicare and acts as comprehensive secondary coverage, often eliminating FEHB premiums entirely. For dual-status retirees, this can save $5,000-$10,000+ per year in FEHB premiums while preserving the right to return to FEHB in any future Open Season. (See TRICARE for Life and FEHB for the full analysis.)

Retirees eligible for CHAMPVA, Medicaid, or Peace Corps coverage. Less common but eligible for the same suspend-and-return rule.

Retirees considering private Medicare Advantage. Some private Medicare Advantage plans (not the FEHB-affiliated EGWP plans) offer zero-premium options with broad coverage. A retiree may suspend FEHB to enroll in a private Medicare Advantage plan, then resume FEHB at a future Open Season if the Advantage plan isn’t working.

The suspension mechanism:

• Form RI 79-9 — the official OPM form, titled Health Benefits Cancellation/Suspension Confirmation
• Check Box D on page 2 for TRICARE/TRICARE-for-Life, Peace Corps, or CHAMPVA suspension
• Check Box C for Medicare Advantage / Medicare HMO suspension
• Submit to OPM Retirement Services (1-888-767-6738 for a mailed copy)
• Suspension typically effective at the end of the day before the new coverage begins
• You retain the right to return to FEHB during any future Open Season, or immediately if you involuntarily lose the other coverage
• There are no limits on how often you can suspend and unsuspend FEHB

Why this matters: when the math says you could save thousands per year by leveraging TRICARE-for-Life or another federally-eligible alternative, suspending FEHB captures the savings without giving up your safety net. Done with Form RI 79-9, you preserve the option to come back. Done with a cancellation (the wrong form, or the wrong box on the same form), you lose that option forever. Which is exactly the topic of the next section.

6. Cancel vs suspend — the most important rule

This rule is so important that it deserves its own section. Among all the federal retirement decisions a retiree can make, canceling FEHB in retirement is one of the few that cannot be undone. Once canceled, you generally cannot re-enroll. Ever.

Form RI 79-9 itself is named Health Benefits Cancellation/Suspension Confirmation — the same form handles both actions, distinguished only by which box you check. That makes it easy to use the form correctly, and also easy to use it wrong.

Why people cancel by accident. A common scenario: a federal retiree turns 65, enrolls in Medicare, picks up a Medicare Advantage plan they like, and decides FEHB is now redundant. They contact OPM to “drop” their FEHB coverage. If the form is submitted with a cancellation box checked rather than the Medicare Advantage suspension box, the door closes. If the Medicare Advantage plan later changes drastically, drops a provider network, or the retiree moves to an area where it isn’t offered well, there is no return path to FEHB.

The rule of thumb: if you have any FEHB-eligible alternative coverage (TRICARE, Medicare Advantage, CHAMPVA, Medicaid, Peace Corps) and are considering leaving FEHB, always suspend, never cancel. Form RI 79-9 with Box C, D, or E checked requires documentation of the other coverage and protects your right to return. Box A or B (cancellation) looks like a faster solution but closes a door that took decades of federal service to earn.

The same rule applies to a surviving spouse who inherited FEHB through a survivor annuity — suspending preserves the family’s option to return; cancellation forfeits it.

7. The PSHB picture for postal retirees

The Postal Service Health Benefits (PSHB) program launched in 2025 as a separate program for postal employees and retirees, carved out of FEHB. It’s now in its second plan year, and postal retirees face slightly different Open Season decisions than other federal retirees.

Key points for 2026:

• PSHB has 75 plan options across 17 carriers in 2026 — a smaller universe than FEHB’s 132 plans / 47 carriers
• 2026 PSHB premiums rose 11.3% on average — lower than FEHB’s 12.3% but still significant. The total premium increase (government + enrollee share) was about 9%
• Medicare-eligible postal annuitants and their family members must enroll in Medicare Part B to access PSHB benefits — a rule that doesn’t apply to general FEHB
• PSHB benefits are otherwise aligned with FEHB, with the exception of prescription drug coverage

If you’re a postal retiree:

• You participate in PSHB Open Season, not FEHB Open Season
• The Part B requirement for Medicare-eligible enrollees is non-negotiable — missing it forfeits PSHB coverage
• The Decision 2 (Part D EGWP) and Decision 3 (suspend for Medicare Advantage or TRICARE) frameworks above still apply, but worked through PSHB carriers rather than FEHB

The PSHB transition is still settling — some postal retirees experienced enrollment hiccups in 2025, and OPM has expanded support resources for the 2026 plan year. If you’re a postal retiree confused about which program covers you, contact OPM Retirement Services (1-888-767-6738) for specifics on your case.

8. The Open Season action checklist

A practical step-by-step for federal retirees handling Open Season:

3 weeks before Open Season opens (late October):

• Pull your current FEHB plan brochure and verify your covered services and providers
• List every prescription you take and confirm it’s still on your plan’s formulary for the new year
• Check your Medicare Part D / EGWP status if Medicare-eligible
• Pull last year’s out-of-pocket spending — premiums, copays, drug costs — to know your starting point

Week 1 of Open Season (early-to-mid November):

• Run the OPM plan comparison tool at opm.gov/healthcare-insurance using your ZIP code and Medicare status
• Compare your current plan to the 2-3 best alternatives for your situation
• If considering EGWP, verify every drug on your list is on the EGWP formulary
• If considering FEHB suspension, gather documentation of the alternative coverage (TRICARE ID card and Medicare A+B card for TFL; Medicare Advantage enrollment confirmation for MA)

Mid-Open Season (late November):

• Make your decisions: stay, switch plans, change tier, enroll in EGWP, or suspend
• Submit FEHB changes through your retirement system (OPM Retirement Services for most retirees) — retirees use retireefehb.opm.gov
• For suspension, submit Form RI 79-9 with the correct box checked and documentation
• For Medicare AEP changes, submit through Medicare.gov or your Medicare plan directly

Close of Open Season (December 8):

• Confirm changes were processed — print or save confirmations
• Update your records with new plan IDs, member numbers, and effective dates
• If you suspended FEHB, retain the suspension confirmation for any future return to FEHB

January (new plan year begins):

• Verify the new plan is active when your first prescription, doctor visit, or claim hits
• Confirm premium amounts on your February 1 annuity payment (the first one to reflect the new premium)
• Address any errors immediately — contact your retirement system and the carrier

A reviewed Open Season is rarely dramatic — most years, the right answer is to stay with your current plan. But the review itself is what produces the confidence that staying is genuinely the right choice. The retirees who skip the review and absorb 12-13% premium increases for two consecutive years often don’t realize how much money has quietly walked out the door. (For the related FEHB enrollment-history rule, see the FEHB 5-year rule.)