Posted on July 19, 2021 by Kyle Walton
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Posted on July 19, 2021 by Kyle Walton
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Want to hear something that may surprise you? According to recent reports, more Americans over the age of 65 are choosing to stay at work. According to the Bureau of Labor Statistics, Americans between the ages of 65 and 69 years old will make up 36 percent of the workforce by 2024. Perhaps even more surprisingly, between July 2017 and July 2018, more than 250,000 American workers were older than 85. That’s an all-time record.
These stats bring up a lot of questions, specifically pertaining to health insurance coverage. Currently, 65 years old is the age of eligibility for individuals to get on Medicare, but what happens if you’re still working at that age? Is it a wiser choice to remain on employer healthcare benefits, or switch to Medicare for your coverage needs? The truth depends on a number of factors.
Before we get into the details regarding the benefits of Medicare vs. employer coverage, there is one question that should be addressed right away: is it mandatory to sign-up for Medicare when you turn 65? Technically, the answer is both yes and no.
Basically, if you are no longer working and considered retired, then you will be required to sign-up for at least Medicare Part A (and usually Medicare Part B) as soon as you are eligible. Neglecting to do so can result in late enrollment penalties. Late enrollment penalties can also be incurred if the company you work for does not offer significant healthcare benefits. Typically, this applies to smaller companies with fewer than 20 employees.
However, if you are still working and the company you work for has more than 20 employees, you can delay Medicare enrollment without incurring penalties. If your employer’s group health coverage works for you, then delaying Medicare enrollment may be an option.
If you are still working at the age of 65 or older, weighing the benefits of employer health insurance vs. Medicare can become increasingly complicated, especially because Medicare has multiple parts. The basic parts of Medicare are as follows:
With Medicare Part A, you can receive coverage for most hospital expenses, including inpatient stays, hospice, and some home-health services. If you work for a company with fewer than 20 employees, it is mandatory to sign up for Medicare Part A in order to avoid gaps in coverage and/or late enrollment fees.
Medicare Part A makes up one half of what is called “Original Medicare,” while Medicare Part B makes up the other half.
Medicare Part B covers some additional expenses that Medicare Part A does not, including doctor’s visits and many types of therapy and health assistance that isn’t needed on a full-time basis. If you are still working and your company employs fewer than 20 people, enrolling in Medicare Part B at the age of 65 is usually required as well.
It can be beneficial to enroll in both Medicare Parts A and B even if you opt to keep employer coverage because as soon as you turn 65, your employer may no longer be required to pay for healthcare needs that would otherwise be covered by Original Medicare.
Also known as “Medicare Advantage,” Medicare Part C often takes the form of additional health insurance coverage plans that are provided by insurance companies. Medicare Advantage plans can often expand Medicare coverage for needs like vision, hearing, and dental assistance.
If you opt to continue relying on employer-provided health insurance after the age of 65, Medicare Part C is not required and may not be needed.
Medicare Part D is quite simple, it is an additional Medicare option that is designed to pay for prescription drug needs. Like with Medicare Part C, Medicare Part D is not automatically offered and not required for those enrolling in Medicare for the first time.
Enrolling in Medicare may still be good practice. Even if you are still working and want to keep yourself and your spouse on your employer’s plan, you can still have Medicare as a secondary coverage option. In many ways, Medicare can often provide better coverage than an employer plan, and it may even result in lower out-of-pocket costs.
Signing up for Medicare parts A and B should typically be done as you prepare to turn 65 years old.
While there may be a few reasons why you may choose not to enroll, such as wanting to remain on your large employer’s coverage, continue contributing to your employer-provided health coverage savings account, or if your spouse is younger and unable to receive Medicare benefits just yet.
Nevertheless, enrolling in Medicare may still be good practice. Even if you are still working and want to keep yourself and your spouse on your employer’s plan, you can still have Medicare as a secondary coverage option. In many ways, Medicare can often provide better coverage than an employer plan, and it may even result in lower out-of-pocket costs.
Recently, healthcare inflation has led to a dramatic increase in insurance premiums. In turn, many employers have been shifting costs to their employees in the form of higher deductibles and copays.
If you’re on the fence about whether to go with Medicare or remain on employer health insurance, keep in mind that most people do not pay premiums for Medicare Parts A, while Part B premiums can actually be quite affordable depending on income.
Medicare can also sometimes provide more comprehensive coverage for specific services, especially with Medicare Advantage. For these reasons, older Americans are encouraged to research and compare plan options in order to arrive at the most budget-friendly decision for themselves and their loved ones.
Feel free to contact MedicareInsurance.com by phone to speak to a licensed agent about your options or utilize our free online comparison tool today.
Kyle is a professional writer with several years of experience helping to inform the public on many diverse topics and industries, including healthcare. He is a Kutztown University graduate, Class of 2017.