According to Medicare.gov, whether or not you retire at age 65, you are still eligible for Medicare! In this MedicareWire article, we’ll go over what you need to know if you’re still working after your 65th birthday.
Working After Age 65
If you, or your spouse, are still employed after age 65 you may have health insurance through your employer. The first step you should take before you enroll in Medicare is to talk with your employee health benefits administrator.
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.
The ABCs of Medicare
As you near your 65th birthday, you’ll need to make a few important decisions about your Medicare health insurance. These decisions are often confusing, so give yourself some time to think them over.
Here are the decisions you will need to make:
- Determine your Initial Enrollment Period;
- Decide whether to enroll in Medicare Part A and Part B when you turn 65; and
- Find out how to sign up for Medicare Part A and Part B (or opt-out of Part B)
First things first, let’s get a handle on the two parts of traditional Medicare.
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 2020, the premium starts at $144.60 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.
More Things You Should Know About Traditional Medicare
Also, be aware that traditional 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 Medicare 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 gaps built into Medicare coverage. They can range from about $120 to $500 per month, depending on where you live and how much coverage you need. You can learn more about Medigap plans and compare your options here.
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.
What to Do If Your Employer Forces You Out Of Your Employee Health Plan
By law, if a company has 20 or more employees, it must offer the same coverage to employees 65 years or older as it does to its younger employees. Plus, the company can’t modify coverage or charge older employees more. When you turn age 65 you can choose to keep your employers group health coverage or drop it in favor of Medicare.
Smaller companies have different options. A company with fewer than 20 employees can:
- Exclude employees 65 and older from group coverage. Those employees are then covered by Medicare.
- Let employees age 65 and older keep the coverage. In this case, the group plan is a secondary payer to Medicare. Be aware that the 65-year old employee must enroll in premium-free Medicare, Part A, during their Initial Enrollment Period (IEP). The benefit of staying in the group health plan is that it will help pay some of the expenses that Medicare does not cover. If the prescription drug plan is not credible, it may be necessary to enroll in a Medicare Part D plan.
If you’re planning to work after age 65, it’s important to understand your health insurance options. It takes time to get all of the answers, so be sure to get started early. You can enroll in Medicare as early as three months before your 65th birthday.