Over Age 65 and Working? Medicare is an Option to Consider!

Medicare is not for old people!

If you are 65 it is your RIGHT to have it!

But do you want to enroll in Medicare even if you are covered by a plan from your Employer?

In many cases, I would argue the answer is, YES!

Why would someone who has a perfectly reasonable Employer based plan want to leave that plan an consider Medicare?

The first and most obvious reason is cost. Not simply premium but the entire gamut of what the out-of-pocket costs are.

Another reason is freedom. It puts control in your hands.

Note: when I refer to "Medicare" I am referring to the program in its entirety including Parts A, B, C, D & Supplements.

Let's have a look:

• Premiums #1...Medicare starts at $144.60/month for an individual. That is less than most pay for Employer based coverage even after any contribution is deducted! You may pay more, or less, depending upon your circumstances.
• Deductibles & Co-pays...Standard Medicare has fairly large deductibles and co-pays but fewer than 20% of enrollees have just Standard Medicare. Most opt for either a Medicare Supplement (Medigap) or a Part C Advantage plan, both sourced from a private carrier. As of 2020 you are required to pay your $194 Part B deductible if on a Supplement. But that's it! Aside from drugs you have a $194 deductible. Compare that to the many $1000s you most likely have on your private Employer plan. Put another way, you are covered from dollar $195. If your current health plan has a $3,000 deductible you are not truly covered until the dollar $3001.
• Freedom #1...How many people you know stay at a job, throughout their carriers, for the sake of Health Insurance. Now you don't have to. You have earned independence and can opt to reduce your hours, retire, start your own business, etc. without fear of losing coverage because you coverage is detached from your Employer.
• Options...Parts A&B are provided by the Federal Government and administered by the Centers for Medicare & Medicaid Services (CMS). Part A comes with $0 premium for most people who have worked/filed taxes in this country for 40 quarters or more. Part B has a "standard" rate of $144.60/mo that is subject to income adjustment up or down. Now for options you get to decide between a fixed cost plan with a $194 deductible or an Advantage plan with little or no premium. Both have pros and cons. Both are offered by private insurance carriers. You get to decide what is best for you!
• Freedom #2...If you opt for a Supplement to augment your Medicare A&B coverage, you have NO network. Talk about freedom! You can see ANY Provider that accepts Medicare, and by law, they are required to take your Medicare Supplement plan. Spend your winters in Florida, no problem, you can see any doctor anywhere. You also may not have ANY co-pays for ANY proceedure!
• Premiums #2...If you opt for a Part C Advantage plan you choose the carrier and the plan that best fits your needs. Human Resources doesn't dictate your choices, whatever carriers are available where you live are an option! Additionally, many have little or no premium or deductibles! Do you have to change doctors, no, just pick a plan that your Dr. accepts!
• Freedom #3...Part D Drug Plans. Maybe you take expensive meds that only a few carriers in your area fully cover. Maybe you take none. Why not choose a Drug plan that fits your needs? As a standalone plan, it needn't be from the same carrier as your Supplement, but it can be! Choose what is best for you based on coverage and costs.

Medicare is a confusing and complicated system with many rules and as many exceptions to those rules.

To make matters worse, few of us have ever bought our own Health Insurance. We pick from a curated list of options that the CFO of our company selected. Also, the option of having a fixed monthly cost, with no network or co-pays, is alien to most of us.

However, when you understand the program you can intelligently assess the coverage/costs/benefits with those from your Employer. No matter what your decision, by having an understanding of the Medicare system you are better prepared for when the time comes that you no longer have an Employer sponsored plan.

Approximately, 7 of 10 people I meet with, who are still working, opt to go with Medicare and leave their Employer's plan. Is it right for you? I can't answer that without understanding your health, your income, who your providers are, etc. I also need to know the details of your Employer's plan to compare.

Is it worth your time? The cost savings either in terms of wasted premium dollars or unnecessary co-pays could easily get into the thousands! In retirement, health costs have the potential to become a huge drain on resources. Knowing how to maximize health coverage while reducing costs is critical!

I encourage you to have a look at Medicare with a trained, independent representative who can explain the system, and help you compare all of your options!

One caveat, check with someone who knows the rules based upon where you live. While much of the program is Federal and the rules don't change, some states do not follow the Federal guidelines.

Thank you for reading. I welcome your comments.

Scott Maibor