You’re 65 and Working: What about Medicare?
Retirement used to be closely linked to turning 65. No more. The full retirement age for anyone born in 1943 or later is at least 66. It’s 67 if you were born in 1960 or later. Full retirement age is the age at which you can receive 100% of your social security retirement benefit.
Medicare eligibility still begins at age 65, even if retirement does not. The question is: What do employed 65-year-olds do about Medicare?
Medicare Before You Retire? Maybe
If you or your spouse is working, then you may have health insurance through an employer. It’s important to understand how Medicare can work with your existing insurance.
Before you do anything about Medicare, you need to talk with your employer human resources department or health plan administrator. Questions you may want to ask include:
- What kind of health plan do I have? For example, many employer plans are HMOs (health maintenance organizations).
- How would my health insurance change if I enrolled in Medicare?
- How much is deducted from each paycheck for health insurance? (Remember that you do not pay taxes on payroll deductions for health insurance. You need to consider the tax savings to determine the total value.)
This information will help you evaluate your Medicare choices and decide what’s best for you.
Enroll in Medicare Part A? Probably
Most people enroll in Medicare Part A (hospital coverage) when they turn 65, whether they are working or not. This is because Part A is premium free for most people. You earn this benefit by paying into the Medicare program while you’re working. You qualify for premium-free Part A if you or your spouse contributed to Medicare for at least 10 years.
In general, hospital expenses are covered first by your employer plan. Part A may not contribute much. It’s still a good idea to enroll as soon as you’re eligible, as long as it doesn’t cost anything. That way you won’t have to worry about signing up later.
You may want to delay Part A if your employer plan is a Health Savings Account (HSA). If you enroll, your employer may stop contributing to your account. You could be caught short when paying health care expenses. It’s very important for you to learn how Medicare may change your benefits.
Enroll in Medicare Part B? Depends
Medicare Part B (doctor and outpatient coverage) charges a premium. In 2012, the premium amount starts at $99.90 per month. It’s more for people with higher incomes. Medicare.gov lists the Part B premium amount by income.
Many people who have employer coverage delay enrolling in Part B to postpone paying the premium. You can sign up later during a Special Enrollment Period without penalty.
Part B may be of limited value when you have other health insurance. Exceptions may be people who are self-employed or who work for an employer with less than 20 full-time employees. In these cases, health expenses would be paid first by Part B.
It’s very important to find out how Part B would work with your employer plan before making your decision.
Explore Your Choices
You have a number of Medicare decisions to make when you turn 65. This is especially true when you have other health insurance. You may want to start learning about your choices ahead of time. Preparation can help you get the coverage that best meets your needs and avoid unnecessary costs.
–This information was provided by Medicare Made Clear
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