Medicare or Group Health Insurance
When you are still working but approaching the age of 65 and trying to choose Medicare or Group Health Insurance it can be complicated and a little confusing. Each individual's situation is different and needs to be evaluated. It does not take a rocket scientist and by the time you finish this article you can sit down with a calculator and a computer and see what your best options are.
Let's start by saying if you are going to continue working past 65 and will be staying on the group health insurance plan do not enroll in Medicare Part B. One, you will lose your Open Enrollment Period (No Health Questions - For Any Plan), which is the first 6 months that you are enrolled in Part B and are over the age of 65.
Two, this will cost you an additional $100 per month minimum when you do not need these benefits with your group health insurance plan already in place. There are one or two scenarios I would disagree with what I just said:
- You are extremely sick and need all the coverage you can get.
- Medicare is primary (under 20 employees) and/or your group health insurance doesn't cover much and has a high deductible/out of pocket (over $2,500)
Medicare or Group Health Insurance
Medicare is definitely great insurance. It provides 80% coverage roughly and has a low deductible compared to most group health insurance plans. Many business owners approach us and ask if they should go on Medicare, Medicare Part D and a Medicare Supplement. We let them know this is a very good option but it depends on several factors:
- Are you considered a high income earner according to Medicare? Click on the Medicare Part B link above to see this years high income earner brackets as well as the penalty that goes along with it. The high income earner category starts at $88,000 for individuals.
- How much is your current plan costing you? This is basically so you can compare whether Medicare or Group Health Insurance will cost you more over the course of the year.
- If you are paying the majority of your health insurance costs with your employer coverage you should probably look into your options. If you are planning on stopping work and just want to see if Medicare or Group Health Insurance is better, 999 times out of 1,000 you need to choose Medicare and a Medicare Supplement over COBRA options.
If you are a business owner you can not encourage or tell your employees to go onto Medicare when they turn 65! This is just an important note for business owners out there.
Terminating Group Health Insurance
When you are deciding to retire or stop working you will want to get a few things in place prior to retirement. If you did as we recommend above and did not take Medicare Part B when first eligible you will now want to call Social Security and let them know that you would like to have Medicare Part B added to your Medicare card.
If you did not have group health insurance or credible coverage there is a penalty for delaying Medicare Part B. However, as this article discusses you are not required to have Medicare Part B when you have group health insurance, the penalty is waived.
After getting Medicare Part B added for a specific date in the future which will be the 1st of a month you will need to get a Part D plan and supplemental coverage in place. Part D covers prescription drugs and you are required to enroll in this plan or you will receive a 1% penalty per month you are not enrolled.
The supplemental coverage we recommend is a Medicare Supplement (MEDIGAP PLAN). These plans pick up the gaps in Medicare without taking over your Medicare, like a Medicare Advantage Plan does. Medicare Supplement Insurance varies in pricing across the country by age and zip code. If you would like to get a quick quote click here, this will help you evaluate your Medicare or Group Health Insurance options.
MWG Senior Services and Medicare Insurance Finder helping you discover your Medicare or Group Health Insurance needs.