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When to start thinking about Medicare before retirement
First things first: if you’re going to work past the age of 65 and continue employer-sponsored health insurance, be sure to inform Social Security. Failing to do so can result in a premium penalty for the rest of your life. This is not a good thing.
While Medicare to those in their thirties and forties is nothing more than a far-off notion, people in their sixties face an overly-complicated comparison of employer-sponsored programs and Medicare’s associated insurances. If you are in a situation where you ask yourself, “when can I start Medicare,” we’ve found the following answers to be of chief importance for our clients who are in this situation. They will give you a general idea of how much your Medicare insurance will cost, while also addressing similar concerns.Will your employer-sponsored benefits change at 65?
This is the most common situation with our clients. No matter how strong their employer plans are before 65, upon hitting that birthday their benefits often change. Normally this change comes by way of reduced benefits and rising premiums.
A simple call or email to your Human Resources department should settle this. Ask them what happens to your insurance at age 65. Does your premium change? Do your copays, network, or deductible change? Is there anything else you, as an informed beneficiary, need to know?
Once you have these costs in order, you can begin to make a proper comparison against Medicare’s offerings.
If you have a spouse who is on your employer-sponsored insurance, ask the same questions about their benefits and costs.
Will your employer subsidize your Medicare insurance costs?
Employers sometimes have contracts with organizations to facilitate insurance for their employees over 65. Most of the time this means the employer will pay for some or all your Medicare insurance premiums.
Ask if they will still subsidize premiums should you purchase a plan from somewhere else. They may still help pay but at a lower percentage. This comes into play if the organization they’re contracted with does not offer the best premium rates in the market.
How much will Medicare cost you?
For 2017, the standard Part B premium is $134. (We skip to Part B because Part A comes to most people without charge.) Additional costs to consider are other insurance plans to supplement your Medicare Part A and Part B. You have several options and several price points to choose from, so speaking to a nationally-licensed agent is your best bet to keep it simple.
Medicare Part B Premium + Medicare Insurance + Drug Plan + Plan Costs You Incur = Your monthly out of pocket cost*
*This is the number you need to compare to your employer’s offering.
Finally, do you have health issues?
In other words, will you use your insurance on a regular basis? Though you have guaranteed issuance into any Medicare insurance policy when first starting Part B, the frequency with which you use your insurance can affect how you view the potential efficacy of different plans.