Medicare and Federal Employees Health Benefits Programs: Their Coordination

FEDER-41, EMPLOYEES and annuitants and their dependents who are aged 65 and over are potential beneficiaries of two Federal health insurance programs-health insurance for the aged (Medicare) and lie&h insurance for active and retired Federal employees. The two programs are in considerable measure duplicatory and most Federal employees and nnnuitnnts aged 65 and over are unable to take full advantage of both. A greater degree of coordination between the two programs would be desirable. More than half of all aged persons have private health insurance coverages that, complement or supplement Medicare benefits-that is, to a greater or lesser degree, they meet the deductible or coinsurance payments under LMedicare and/or provide additional days of care in a hospitai or extended-care facility and other benefits not provided under Medicare.l At present, for those Federal employees and annuitants who are covered under bot,h parts of the Medicare program, the coverage they may have under the Federal employee health insurance programs is largely duplicatory. It functions as complementary coverage, but it is not well adapted for this purpose and is often too expensive for the potential benefits. Probably the major impediment to the development of suitable complement,ary coverages for active and retired aged Federal employees is that these persons are not all in t,lie same situation with respect to eligibility for hospital benefits under Medicare. (Medicare’s supplementary medical insurance (SMI) is open on a voluntary basis to virtually anyone aged 65 or over.) Medicare’s hospital benefits were originally made available to