23 Aug Working Past 65
I’ll be 65 soon but I’m still working and covered under my employer’s insurance. Do I need Medicare? Will I be penalized if I don’t get it?
Here’s a question I am often asked: I’m about to turn 65 but am still working and covered under my employer’s insurance. Do I have to sign up for Medicare?
For most people the answer is no but here are a few things to consider:
Does your employer require you to sign up for Medicare Part A, Part B or both? How much do you pay for your current employer’s coverage? What’s the deductible and out of pocket maximum? Your human resources department should be able to answer these questions.
Now, it becomes a numbers game. You will want to compare costs. First, how much will Medicare Parts A and B cost? Will you pay the base rate or will you have to pay IRMAA (Income Related Monthly Adjustment Amount) You can learn more about IRMAA here. Once you know that number you need to compare how much would comparable coverage with a Medicare Supplement or Medicare Advantage plan cost? How would prescription drugs be covered under Medicare versus the employer plan you have. Which one will cost less? But make sure you are not only comparing monthly costs, but also in the case of a catastrophic health event like cancer. Then you can see if enrolling in Medicare makes dollars and “sense” for you.
The great majority of the time, however, I recommend that people delay enrolling into Medicare until they are ready to retire but each case is different. If you do delay Medicare, the good news is you won’t be penalized as long as your coverage is considered ‘creditable coverage’, meaning at least as good as Medicare’s coverage. The great majority of employer coverage is considered creditable.
I also recommend that you should start planning about 6 months from the date you know you’ll retire. This will give you plenty of time to enroll in Medicare Parts A and B and consider all your options.
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