Many people continue working well beyond the age of 65 when eligibility for Medicare kicks in. If you’re no longer working full-time by the time you’re 65, then you should definitely sign up for Medicare. You typically have a seven-month (three months before and three months after your birthday month) window to sign up for Medicare. Medicare while still working full time and having health coverage through your employer is a different story altogether.
Medicare While Working Full Time
If you’re still working at 65 or older, it may be wiser to delay enrolling in Medicare until you retire. Many people hold onto their employer’s health insurance and also enroll for Medicare under the assumption that they will spend less out-of-pocket with both policies. Well, that’s not necessarily the case.
There are several factors to consider when deciding whether to enroll for Medicare as soon as you’re eligible or delay the process until you retire.
Eligibility to Delaying Enrollment
If you or your spouse is still in active employment with a company that has at least 20 full-time workers and you get drug coverage and health insurance through them, then you’re most likely eligible to delay your enrollment in Medicare until either you or your spouse retires. However, there are a few exceptions. If you work with a company that has less than 20 employees or your insurance is through TRICARE or COBRA, then you’re better off joining Medicare at age 65. Nonetheless, there are plenty of factors to consider when choosing whether to delay or enroll in any of the parts of Medicare.
Delaying Enrollment in Medicare
Most people (with insurance coverage through their employer with 20 or more employees) will have their employer’s insurance coverage as the primary payer, and Medicare as their secondary payer. In such cases, Medicare will only pay your health bill if your employer’s cover pays less than what Medicare would have paid if it was the primary payer. However, most employer insurance will typically cover more of the cost than Medicare would, resulting in Medicare making no payment. Ultimately, you’re unable to benefit from any cost savings by having Medicare as well as your employer’s plan.
Since your employer insurance will usually cover more of the cost than Medicare, it would be more cost-effective to delay switching to Medicare and retain your employer health cover until you retire.
Overall, delaying enrollment in Medicare until you retire makes the most sense- especially if your employer’s health plan benefits are superior to those offered by Medicare. However, you may need to sign up for Medicare regardless of whether you have coverage- if your company employs less than 20 individuals.
When it comes to Medicare, be sure to do your due diligence. Read up on Medicare and find out how it works so that you’re able to make solid comparisons when the time comes to make a decision. Signing up late for Medicare can attract hefty penalties so the more you know about Medicare, the better equipped you are to make an informed choice.