Great news – whether or not you retire at age 65, you are still eligible for Medicare!
If you, or your spouse, are still employed you may have health insurance through that employer. The first step you should take before you enroll in Medicare is to talk with your human resources department. You will need to know which kind of health plan you are currently enrolled in and how (if at all) that health insurance will change if you enroll in Medicare. This information will help you evaluate your Medicare choices and decide which plan is best for you.
Medicare Part A, which is hospital coverage, is premium-free for most people. It’s a good idea to enroll in Part A as soon as you’re eligible, as long as you qualify for it premium-free. However, if your employer plan is a Health Savings Account (HSA) – speak to your employer first. They may stop contributing to your account if you enroll. This is why it is very important to learn exactly how Medicare will change your current benefits.
Medicare Part B, which is doctor and outpatient coverage, does charge a premium. For the year 2018, the premium starts at $134 per month with increasing premiums for people with higher incomes. Many people who are still working and have group health coverage delay enrolling in Part B in order to postpone paying this premium. Also, the Medicare Part B benefits may be of limited value to you as long as your group health plan is the primary payer of your medical bills.
Also, be aware that Original Medicare – Parts A and B – do not include coverage for your prescriptions, as does a traditional HMO or PPO plan from your employer. For this you’ll need to enroll in a Part D plan that’s available in your state. Medicare prescription drug plans start at less than $20 per month.
As with your employer’s health plan, Medicare does not cover all costs. Parts A and B have co-insurance and deductibles baked in, and they are pretty hefty. After you pay the deductibles, Original Medicare covers 80 percent of approved costs, leaving you on the hook to pay the rest. This can be devastating if you don’t buy supplemental insurance, called a Medicare Supplement or Medigap plan. They are called Medigap plans because they cover the insurance gaps. They can range from about $120 to $500 per month, depending on where you live and how much coverage you need.
PLEASE NOTE: If you work for a small company (20 employees or less), speak to your employee health benefits administrator before making any decisions. In this case Medicare is the primary payer and your group health insurance would be the secondary payer.