If you are 65 or older, you face a dilemma your younger coworkers do not, and that is this: Is your employer-provided health insurance plan really your best possible option? The honest answer is: Maybe. It depends.
To qualify for Medicare coverage, you must be at least 65 years old and a U.S. citizen (or a permanent resident who has lived in the U.S. for the last five years). You must have also paid into, or be married to someone who has paid into, Medicare taxes for 10 years. You may also qualify to enroll in Medicare if you’re under age 65 and will be on SSDI (Disability) after the 24-month waiting period.
Breaking Down Medicare (A, B, C, D…etc.)
• Medicare Part A – Covers hospital expenses, such as in-patient stays, hospice care, skilled nursing facilities, as well as some at-home health services. Note: It does not cover long-term assisted living care.
• Medicare Part B – Covers the medical expenses related to doctor visits, outpatient procedures and tests, along with therapy and assistance from aides or skilled nurses on a part-time basis.
• Medicare Part C – Also known as “Medicare Advantage.” Combines A, B, and D (drug plans) into a group HMO plan administered by an insurance provider and at a very cost-effective price. (Sometimes at no charge!)
• Medicare Part D – Covers medications or prescription drugs.
• Medicare Supplemental Plans – These are also known as “Medigap plans” that provide you with supplemental insurance (supplemental to Medicare Parts A, B, and D).
If you are 65 or older and working in an office with 20 or fewer full-time employees, you are required to have both Medicare Part A and Part B. Your employer is the secondary payer in this situation and has no requirement to pay for coverages and services that are covered by Medicare (the primary payer). An employee not enrolled in both Medicare A and B is at risk of being financially responsible for any Medicare coverages, copays, and coinsurance payments. One instance of hospitalization could quickly escalate into thousands of dollars of debt. If you are part of a company with 20 or fewer full-time employees, it is recommended that you sign up for Medicare A and B now to avoid this risk.
Signing up for Medicare A and B is optional for employees who are 65 or older and working for an employer with 21 or more full-time employees. There are a number of reasons why an employee would choose not to enroll now. The most common is that the employee’s spouse is younger (under age 65) or the employee still has dependents (under age 26) that are enrolled in a group medical plan. Other considerations would include if the employer offers a Health Reimbursement Account (HRA) or Flexible Spending Account (FSA) plan and the employee wants to continue participating in these plans.
Contrary to what you may have heard, Medicare can actually provide you with more comprehensive coverage and at a lower cost – in some cases a significantly lower cost – than your employer-sponsored group medical plan. Premiums for employer-sponsored group plans have seen a steady trend in increase each year, while coverages have been downgraded to lower cost/reduced coverage plans with higher deductibles and copays.
Medicare-qualified employees have options. When declining the employer group health plan and changing to Medicare, the cost for insurance often becomes much less. For example, Part A and Part B is as low as $144.60 a month, depending on income, and the level of coverage is often increased in the form of lower copays, lower deductibles, and lower out-of-pocket expenses. It is really important for anyone over age 65 or nearing age 65 to look closely at his or her options in order to make the most informed and best decision.
When it comes to the cost of medical insurance, the level of coverage and quality of care, your best choice might just be Medicare. To learn more, contact CAP’s Medicare Licensed Agent Bill Graham at Ashbrook Clevidence for a free consultation. Call Mr. Graham at 800-447-4023, or email billg@aclevidence.com.