If you’re still working past the age of 65, should you switch to Medicare?
Unfortunately, there’s no clear answer, because every situation is unique. We do find that for most people, switching to Medicare with a Medicare Supplement can save a lot of money, but this isn’t always the case.
There are 4 main reasons to switch from your employer’s group coverage to Medicare:
Copayments
Coinsurance
High monthly premium
High deductible
The average premium for a single employee’s group plan is $500+ per month (according to the Kaiser Family Foundation). It’s common to see deductibles of $1,500+, and copayments can cost you an average of $20 - 40 per visit. Factor in coinsurance, which is usually 20%, and you’re shelling out quite a bit to be on your employer’s group health plan.
The exception here would be if your employer aids in these costs. Perhaps you don’t have to pay a monthly premium, which only leaves you responsible for the deductible and copayments. Even then, these costs add up, so it can be to your advantage to take a look at the costs involved with Medicare and a Medigap plan.
Medicare Part A is free. Part B costs $135.50 per month for the majority of Americans (it costs more if your income is a higher tier).
If you choose Medigap Plan F, you won’t pay any deductibles or coinsurance associated with Medicare, but you will have a monthly premium. This premium varies depending on a variety of personal factors.
If your employer covers your monthly premium, the decision becomes a little tough. Speaking with a licensed HRBC agent can clarify the situation as well as your options. We recommend setting up a short appointment to go over these.
If you’re working past age 65 and want to enroll in Medicare, there are certain times when you’re allowed to do so.
Note: There are many moving parts to Medicare, and the smallest difference can change your entire enrollment process. For example, each state has different regulations that affect your Medicare enrollment. Other examples include whether you work for the railroad or take a prescription that isn’t on the formulary.
Enroll in Medicare Part B when you lose your group plan or when you know that your group coverage is going away. You can do this up to 3 months before you lose your coverage.
If your group plan has credible drug coverage, you should sign up for Part D the month before you’ll need to replace it. This is called a Special Enrollment Period (SEP) for those moving from an employer’s group plan to Medicare.
For example, if you know you’re losing your group coverage on May 1, you should sign up for a Plan D drug plan during the month of April. This will ensure that you are covered starting on May 1.
Choosing a Medicare Supplement can happen up to 6 months before you enroll in Medicare Part B. You won't have to pay for that supplement until your Part B becomes active. During this time, you can select any supplemental plan with no health questions.
If you already signed up for Part B (over 6 months ago), you have 60 days after you lose your group coverage to sign up for a supplement. This is a Guaranteed Issue (GI) situation, which means there are no health questions. The downside? You’re limited to Plans A, B, C, and F. If you can pass health questions, you can go through underwriting and choose any plan you like.
We always recommend speaking with an HRBC representative before making big changes to your health insurance, especially when you’re working past age 65.
For detailed information on HRBC services, and what Medicare Advantage health plans are for your specific needs, call us at 1-877-651-7526 TTY: 711