Medicare Part B in 2027: What Federal Employees Should Know Before They Retire

Part B carries an income surcharge, the income-related monthly adjustment amount (IRMAA), and it looks back two years. For 2026, SSA says it generally uses the tax return filed in 2025 for tax year 2024. The surcharge starts when modified adjusted gross income (MAGI) tops $109,000 on an individual return or $218,000 on a joint return. The first tier adds $81.20 a month to the standard premium, and the tiers climb from there.

Why does a two-year lookback matter? It lands on your highest-earning years. Take an example GS-14 filing single who retires at 65 in 2027. Their 2027 premium generally rests on their 2025 return, a full salary year. The 2029 premium looks at 2027, which holds part of a year's salary plus the lump-sum payout for unused annual leave, a payment the IRS treats as wages. Both bills may reflect working income, not the smaller annuity that replaces it (the paperwork remembers your best years).

However, SSA will make a new decision when income drops after certain life-changing events, and "you or your spouse stopped working" is on its list. You file Form SSA-44 with proof such as a letter from your agency about your retirement. In my opinion, that letter belongs in the same folder as your retirement application, because you may need it within a year or two of leaving.

The Federal Employees Health Benefits (FEHB) Program does not require Part B. OPM's page for annuitants turning 65 puts it simply: the decision is yours. Your FEHB coverage continues either way, and its premiums won't drop if you enroll. Once you retire, Medicare pays first and your FEHB plan pays second.

So the choice comes down to a break-even. On one side is the Part B premium: $202.90 a month in 2026 for most people, or $2,434.80 for the year. On the other side is what Medicare would pick up, and your plan's brochure spells it out. Take the 2027 Blue Cross and Blue Shield Service Benefit Plan brochure as an example. When Part B is primary, Standard Option waives the deductible and its coinsurance and copayments for professional care, while Basic Option waives copayments and coinsurance and repays up to $800 a year of Part B premiums (neither waives drug cost sharing).

With that said, the cheaper choice today can cost more later. OPM says the Part B premium goes up 10% for each 12 months you could have had Part B but didn't take it. Thus skipping Part B is easier to decide than to reverse. Open Season (November 9 to December 14, 2026) is a good time to read your own plan's Medicare section, years before you need it.

If you work past 65, the rules are kinder while you do. While you're an active employee with Medicare, OPM says FEHB pays first and Medicare second. Coverage based on current employment also lets you delay Part B without the late penalty. Medicare.gov says the special enrollment period ends eight months after the employment or the group coverage ends, whichever happens first.

Keep in mind that for a retiree, those eight months count from separation, not from your first annuity payment. Annuitant FEHB doesn't buy more time, since Medicare.gov says the end of retiree coverage doesn't qualify. OPM's retirement quick guide puts the wait for your first regular payment at 3 to 5 months, so much of the window can pass on paperwork alone. If you're working past 65, put the Part B decision on the same checklist as your retirement application.

Postal employees face a firmer rule. Under the Postal Service Reform Act of 2022, OPM says certain Medicare-eligible Postal annuitants and their Medicare-eligible family members must enroll in Part B to keep Postal Service Health Benefits (PSHB) coverage. The exceptions are narrow for anyone still working. They cover annuitants who retired on or before January 1, 2025 and weren't already in Part B, and employees who were 64 or older on that date. People living outside the United States and its territories, and those eligible for certain VA or Indian Health Service benefits, are exempt too.

If you were a Postal employee under 64 on January 1, 2025, plan on the Part B premium as a fixed retirement cost unless another exception fits. That changes the FEHB break-even above: for you there is no break-even to run. Family members of an exempt annuitant are generally exempt too, so check the whole household.

The standard Part B premium for 2026 is $202.90 a month, up from $185.00 in 2025, according to CMS. The 2026 deductible is $283. The 2027 premium, deductible and IRMAA brackets will arrive together in the CMS announcement, so treat any 2027 estimate in the news as just that.

How you pay depends on whether you draw Social Security yet. If you don't (common for FERS retirees under 62), OPM says you can elect to have Part B premiums deducted from your federal annuity, or you're billed directly.

The premium also eats into each year's raise. For 2027, SSA puts the Social Security COLA at 3.6%, and OPM lists the annuity COLA at 3.6% for CSRS and 2.6% for FERS. Simply stated, a retiree's real raise is the COLA minus whatever Part B and FEHB add that year.

I hope this illustrates why Part B is a planning question, not just a form you sign at 65. Your retirement date and your health plan are choices you still control, and both move what Medicare will cost you. Settle the Part B question before 65, and the rest gets simpler.

The estimate runs in your browser, and your inputs never leave it. Keep your retirement letter where you can find it. Read the Medicare section of your FEHB brochure this Open Season. Watch for the CMS announcement this month.