Published on June 24, 2022

Nearly Medicare Age but Still Working? Here’s What to Know About Health Insurance Choices

couple talking with insurance agent

One sign that you’re reaching age 65 is a firehose of envelopes and flyers about Medicare filling your mailbox.

“It starts when you turn 64, and you can expect many letters and offers,” said Janice Lewis, sales associate for Avera Health Plans. “It can be overwhelming, and that’s why finding a trusted source for your questions is important.”

So what do you do when you have that 65th birthday – even if you’re still in the workforce?

More People Joining Medicare

The share of workers age 65 or older grows each year, and will soon be one-third of all workers. When it’s your turn, there are decisions. But there’s one simple step anyone can take.

“I recommend that people sign up for Medicare Part A when they’re eligible,” Lewis said. “Then you’re enrolled, and you can compare your current health insurance to the other parts of Medicare.”

Medicare Part A is hospital coverage that is usually premium-free, if you or your spouse paid Medicare taxes for a certain amount of time while working.

Lewis said there are a few basic ideas to also remember:

  • What your current plan looks like, costs and how it’s worked for you.
  • What the costs and copays of a Medicare program, such as Plan B, looks like for you. Medicare Part B covers medically necessary services and preventive care.

While you’re not required to sign up for Medicare at 65, timing is important.

“There’s a seven-month enrollment window that includes the month of your birthday, as well as the three months before and after,” Lewis said.

You may end up being covered by Medicare Part A for hospital care in addition to your employer plan for other aspects of coverage, like doctor visits and prescriptions.

The size of your business is another factor. “If you work for an employer with 20 or fewer employees, your Medicare Part A will be your primary coverage for hospital care. In larger companies with more than 20 employees, your employer-offered coverage is the primary payor for care if you have both Medicare Part A and employer coverage,” Lewis said.

Understanding Enrollment Periods

Once that initial enrollment period ends, there are other chances to enroll in Medicare, including Part A for hospital care, Part B for medical services and Part D for prescription drug coverage.

They include:

  • Special Enrollment: These come up when you voluntarily leave your employer’s coverage or move from one state to another. You usually have a 60-day window to make changes in these situations.
  • Annual Enrollment: These open each year, as the name implies, on Oct. 15 and continue through Dec. 7. If you end up having a special enrollment and use it, you cannot use the annual one to change things.

When you have health insurance through a job and are still working it’s considered a “special situation” and you can sign up for Part A and Part B any time as long as:

  • You have group health plan coverage.
  • You or your spouse (or a family member if you’re disabled) is working for the employer that provides your health coverage.

You have eight months to sign up after you stop working or lose group health plan coverage (whichever happens first).

Supplements for Medicare

Once you’re enrolled in Medicare, you might consider a supplemental coverage to ensure your health insurance meets your needs – and fits your budget.

“You won’t have to make decisions of this sort until you enroll in Part B,” Lewis said. “The critical thing is supplements only vary in price.” Each supplement is mandated to offer the same coverage.

Supplements are important because Medicare doesn’t cover everything and can result in unexpected out-of-pocket costs. Also, there’s no cap on out-of-pocket expenses with Medicare. Your bills could keep increasing in the case of a catastrophic health event.

Provider networks – a choice in doctors – can also impact the cost of a supplement. Supplements are not the same as Medicare Advantage.

“Supplements can fill out your coverage and help you tailor it for your health and budget,” said Lewis. “Medicare Advantage is more like a plan you’d get from your employer – and MA plans vary greatly.”

A Medicare Advantage plan may have $0 monthly premiums. But it may include a wide range of cost-sharing requirements, like co-pays, coinsurance and other fees. Premiums increase as co-pays and/or coinsurance decrease.

“Supplements let you know exactly what your health care coverage is going to cost – every Advantage plan can vary, sometimes greatly,” Lewis said. “Educating yourself on what’s covered and your out-of-pocket costs is important before you make final decisions."

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