Health insurance can be a huge benefit when accepting a job. Often times, employers work out special plans to offer exclusively to their employees at a lower cost and with additional benefits than an individual could purchase on their own in the Marketplace. Whether you work for a large company or a small business, you likely have employer sponsored health benefits. But if you’re getting ready to turn 65 you’ve likely started receiving information about Medicare. Do you have to stay on your work insurance if you’re working past age 65? The answer is no, but there’s a lot more to it than that.
What is Medicare?
Medicare is federally funded health insurance for people who are age 65 and older. In addition, some individuals who are under 65 may qualify if they have certain disabilities. Medicare has multiple components and can be challenging to understand.
Medicare Part A
Medicare Part A is hospital insurance. It helps cover costs you might incur from inpatient hospital visits, as well as Hospice and home health care.
Medicare Part B
Medicare Part B is medical insurance. It helps cover other medical expenses like doctor visits, outpatient procedures, and preventive services like screenings, vaccines, and wellness check ups.
Together, Medicare Parts A and B are referred to as “Original Medicare.”
Medicare Part D
Medicare Part D is the prescription drug portion of Medicare. Original Medicare does not include prescription drug coverage, but it can be “added on” by purchasing a Part D plan through a private insurance company. Coverage and pricing varies by plan.
What about Part C?
Medicare Part C is a bundled version of Medicare Parts A, B, and typically D, and is also referred to as Medicare Advantage. These are plans that are offered by private insurance carriers. They help cover medical costs and often include Part D coverage. Many also include additional benefits.
Medicare Supplement plans, also known as Medigap, are an alternative to Part C and are also offered by private insurance carriers. These plans help fill “gaps” in Original Medicare coverage. Medicare Supplements do not cover medications, so a Part D plan would need to be purchased separately.
There’s a lot to consider
Making decisions about your healthcare shouldn’t be taken lightly.
Here are the main factors you need to consider:
How much coverage do you need? Do you have dependents or a spouse who needs coverage? Which offers me more value for my needs, my employer coverage or one of the options on Medicare? These are some of the important questions to consider when comparing Medicare and your employer’s plan. The amount of coverage varies from plan to plan, but in many cases Medicare can provide more coverage than private plans. Thinking through your current health history and any predisposed medical conditions, you should compare the benefits of your employer’s plan with Medicare. It’s also important to remember that Medicare is an individual plan. Meaning, if you cover other individuals on your current plan, you won’t be able to cover them on Medicare.
Employers often negotiate with insurance companies to offer their employees insurance plans at a lower or bundled rate. However, they can still be costly depending on the plan. Many employer plans have medical deductibles to be met before your plan coverage starts. On the other hand, most individuals do not pay a premium for Medicare Part A and pay smaller premiums for Parts B and D, Medicare Advantage or Medicare Supplement plans.
Late Enrollment Penalties
By now you’re probably accustomed to your employer’s annual enrollment period, typically around the end of the year. This is your opportunity to make changes to your plan, activate your Medicare or change plans entirely, unless you qualify for an exception due to an extenuating circumstance, like moving. You become eligible to sign up for Medicare 3 months before your 65th birthday through the 3 months after your 65th birthday. If you don’t enroll in Medicare during this Initial Enrollment Period you may incur lifetime fees when you do enroll in Medicare after you are no longer working. Medicare late enrollment fees can be costly, up to 10% of your premium per 12 months you delay enrollment, for as long as you’re enrolled. We suggest speaking with a Licensed Insurance Consultant so you can understand why and when a penalty may occur.
Which Is Better?
The final verdict: it depends. We recognize that health insurance needs and goals look different for everyone. Our Licensed Insurance Consultants help you make the right choice by using a kinder and gentler approach to the world of Medicare insurance. We take the time to understand your needs, to help you find a plan that fits your needs and budget, and we are available year after year to ensure your plan is still working for you. If your current insurance offers you the most value, we’re going to advise you to stay right where you are. If there’s options that offer you more value, we will walk you through those options and help you change to one of them, if that’s what you want to do.
Schedule an appointment with one of our consultants today to find out if Medicare or your work insurance is better for you. There are never any fees for any of our services.