Enrolling in Medicare is an important milestone in your life. To gain the maximum benefits from your health care, however, you have to sign up at the right time. If you’re considering getting Medicare before you stop working, make sure you understand the impact this decision could have on your health care options as well as on your finances. Find out whether you should enroll in Medicare before retirement, and learn whether you will have other health care options if you keep working past the age of 65.
When are you eligible for Medicare?
As the U.S. Department of Health and Human Services explains, you typically become eligible for Medicare when you turn 65. However, people who are younger than 65 but have certain disabilities and people with End-Stage Renal Disease (ESRD) or Lou Gehrig’s Disease (ALS) are also eligible for Medicare coverage.
In addition, you may be eligible to receive Medicare Part A without having to pay a monthly premium. If you meet one of the following qualifications, you can get full Medicare Part A benefits:
- You’re 65 or older and either you or your spouse has worked and paid Medicare taxes for 10 years or more.
- You’re eligible to receive or are already receiving retirement benefits from Social Security or the Railroad Retirement Board.
- You or your spouse had government employment covered by Medicare.
If none of these criteria apply to you yet you still meet the basic Medicare eligibility requirements, you can typically buy Part A. If you want Part B, you’ll have to pay a monthly premium. Part D, which includes prescription coverage, and Medigap policies, which fill in coverage gaps, are also available for a monthly premium.
Should you get Medicare if you keep working?
While many people retire at the age of 65 when they begin collecting Social Security and Medicare benefits, others continue working for months, years, or even decades to come. As soon as you become eligible for full Part A benefits, consider enrolling right away. Since there’s no monthly premium, you’ll simply gain more comprehensive coverage for hospital stays, among other things.
If you’re like most people, you’ll eventually want to enroll in Part B, too. If you continue working, however, you may prefer to keep your existing insurance coverage. Keep in mind that when you turn 65, your existing coverage may change even if you don’t proactively make any adjustments to your plan.
If you work for a company with fewer than 20 employees, Medicare becomes your primary insurer. At that point, the plan that you have through your employer becomes secondary, and the coverage may be much more limited. In this scenario, you’ll need to enroll in Part B to ensure that your health care needs are covered.
When you work for a company with at least 20 employees, your employer-sponsored plan continues to offer the same benefits it did before you became eligible for Medicare. In this scenario, you can delay your Part B enrollment until you eventually retire and cancel your employer-sponsored plan.
You’d typically have to pay a late enrollment fee for signing up after your Initial Enrollment Period, but in this case, you’d be granted a special enrollment period. Your spouse would also get a special enrollment period, which means neither of you would be penalized for late enrollment.
Certain personal circumstances may encourage you to hold off on enrolling in Medicare right away. For instance, if you have a younger spouse who isn’t working and depends on your employer-sponsored insurance, you may opt to keep your existing coverage. Spouses aren’t eligible for Medicare unless they’re 65 or meet the other requirements listed above, so ensure that you’re making the right decision for both of you before you change coverage options.
How does Medicare work with other types of insurance?
It isn’t uncommon to have both Medicare and another plan, such as one sponsored by your employer. As Medicare.gov explains, in this scenario, each provider is considered a payer. The primary payer pays first, up to the limits of the coverage provided. If there are remaining costs, the secondary payer pays them up to the coverage limits.
Keep in mind that the secondary payer won’t necessarily cover all of the remaining costs. If you’re considering getting Medicare and another plan, talk with a knowledgeable advisor or your benefits administrator to understand what each payer covers.
Now that you understand the basics of Medicare while working, you can make an informed decision about timing enrollment. Spread the knowledge and share this article with family or friends who are also considering Medicare options as they approach retirement age.
Medicare & the ACA Marketplace
Published: January 1, 2019