Jeffrey Wade
Whether to stick with your employer's health insurance or switch to Medicare is a complex decision that requires careful consideration. Several factors come into play, including age, retirement status, Social Security eligibility, cost comparison, and the specific benefits offered by each plan. It is essential to understand the pros and cons of both options before making an informed choice. While Medicare offers flexibility and additional benefits, employer-provided insurance may provide more comprehensive coverage, especially if you are still working.
| Characteristics | Values |
|---|---|
| Medicare eligibility | When you turn 65 |
| Medicare Part A | Covers hospital expenses |
| Medicare Part B | Covers doctor's bills and other outpatient expenses |
| Medicare Part D | Drug plan |
| Medicare Advantage | Alternative to Original Medicare for health and drug coverage |
| Medigap | Supplemental insurance to cover gaps in Medicare coverage |
| Employer health insurance | Can remain on employer health insurance if still working |
| Primary payer | Pays up to the limits of its coverage |
| Secondary payer | Pays if there are costs the primary payer didn't cover |
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What You'll Learn
Medicare and private insurance can be used together
When you turn 65, you become eligible for Medicare. However, if you are still working and are covered by your employer's health insurance, you may want to consider whether to stick with your employer's insurance or switch to Medicare. In some cases, you can have both private insurance and Medicare, for example, if you're covered under private insurance through your employer. This is known as "dual coverage".
When you have both Medicare and private insurance, one provider will pay for healthcare services first, and the other provider may cover the remaining costs. This depends on your situation and the type of private insurance you have. The "primary payer" pays up to the limits of its coverage and then sends the rest of the balance to the "secondary payer". If the “secondary payer” doesn't cover the remaining balance, you may be responsible for the remaining costs.
Having both types of health insurance can provide additional coverage and potentially lower out-of-pocket costs. However, it can also be more complex to manage your benefits and claims. It's important to understand how the two types of health insurance work together and to review your coverage carefully to ensure that you are getting the best possible coverage for your needs.
If you have questions about how Medicare works with private insurance, don't hesitate to contact Medicare, the SSA, or your local SHIP for assistance.
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Employer insurance and Medicare: which is primary?
When you turn 65, you become eligible for Medicare. However, if you are still working and are covered by your employer's health insurance, you may want to consider whether to stick with your employer's insurance or switch to Medicare. By law, employer group health insurance plans must continue to cover you at any age as long as you are still working. Turning 65 does not force you to take Medicare as long as you are employed. The only exception is if your employer has fewer than 20 people (or fewer than 100 if you are disabled). In this case, you would need to get Medicare, and your employer plan would become the secondary payer of health claims.
If you have Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage, and the "secondary payer" covers the remaining balance. If the secondary payer does not cover the remaining balance, you may be responsible for the remaining costs. If your employer coverage is the secondary payer, you may need to sign up for Medicare Part B before they pay. This order of payment is called "coordination of benefits". If the insurance company does not pay the claim promptly (usually within 120 days), your doctor or healthcare provider may bill Medicare. Medicare may make a conditional payment to pay the bill, and then later recover any payments the primary payer should have made.
If you have employer coverage and get Medicare drug coverage, you may lose your employer health and drug coverage. If this happens, you may not be able to get your employer coverage back. When an employer has 100 or more employees, the health plan it offers is called a "large group health plan". Medicare cannot pay for items or services that workers' compensation will pay for promptly.
In most situations, it is better to keep your employer health insurance. If you have decided that Medicare is a better deal, then you can leave your employer's plan. However, this could be a one-way trip, as the plan might not take you back if you change your mind.
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$94.99 $132
Medicare Part A and B: what they cover
Medicare is federal health insurance for anyone aged 65 and older, as well as some people under 65 with certain disabilities or conditions. It is divided into several parts, each covering different aspects of healthcare.
Medicare Part A, also known as Hospital Insurance, covers inpatient hospital care, skilled nursing facility care, hospice care, and home health care. Part A is free for those who have worked and paid Medicare taxes for at least 10 years or those who are eligible due to their spouse's work.
Medicare Part B, or Medical Insurance, covers doctors' services and tests, preventive services, and outpatient home health care. Most people pay a monthly premium for Part B, with the exact amount depending on their income level.
Together, Parts A and B make up Original Medicare, which can be used with any doctor or hospital that accepts Medicare across the United States. It is important to note that Medicare does not cover everything, and certain services like long-term care, dentures, and routine physical exams are excluded.
Individuals can choose to supplement Original Medicare with additional coverage options, such as Medicare Part D, which helps cover the cost of prescription drugs. Medicare Advantage (Part C) is another alternative, which is a bundled plan offered by private companies that typically includes Parts A, B, and D. These plans often have different out-of-pocket costs than Original Medicare and may offer additional benefits.
When deciding whether to stay on insurance or switch to Medicare, it is essential to carefully compare the coverage and costs of both options. Employer group health insurance plans, for instance, are required to cover employees at any age as long as they remain employed, unless the employer has fewer than 20 employees (or fewer than 100 if the employee is disabled). In such cases, Medicare becomes the primary insurance, and the employer plan becomes secondary. Individuals should also consider their specific healthcare needs, medication requirements, and potential out-of-pocket expenses when making this decision.
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Medigap policies: filling Medicare gaps
When you turn 65, you become eligible for Medicare. However, if you're still working and are covered by your employer's health insurance, you may want to consider whether to stick with your employer's insurance or switch to Medicare.
If you have Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage and then sends the rest of the balance to the "secondary payer". If you have employer group health insurance, they are obliged to continue covering you at any age as long as you are still working. The only exception is if your employer is very small (fewer than 20 people, or fewer than 100 if you are disabled). In this case, you would need to get Medicare, and your employer plan would become the secondary payer.
Medigap is a form of supplemental health insurance coverage for Medicare beneficiaries. It is also known as Medicare Supplement Insurance. Individuals in traditional Medicare may want to obtain Medigap insurance because Medicare often covers less than the total cost of the beneficiary's healthcare. Medicare is divided into two coverage components, Part A and Part B, and both programs have gaps in coverage that may be covered by Medigap.
Medigap policies are standardized and, in most states, are named by letters, like Plan G or Plan K. The benefits in each lettered plan are the same, no matter which insurance company sells it. The price is the only difference between policies with the same letter sold by different companies. Generally, you must have Original Medicare (Part A and Part B) to buy a Medigap policy, and you need to buy a Medigap policy within 6 months of getting Part A and Part B. A Medigap policy only covers one person, so spouses both need their own policy.
Medigap plans sold after 2005 don't include prescription drug coverage. If you want prescription drug coverage, you can join a separate Medicare drug plan (Part D).
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Medicare Advantage: an alternative to Original Medicare
Medicare Advantage, also known as Part C, is a privately issued alternative to Original Medicare. It is one of the two main ways to get your Medicare coverage. While Original Medicare is administered by the federal government, Medicare Advantage plans are offered by private companies.
Medicare Advantage plans may offer Part A, Part B, and Part D (drug coverage) all in one plan. In 2024, nearly 9 in 10 MA plans included prescription coverage. Medicare Advantage plans have become increasingly popular, with nearly 33 million people enrolled in an MA plan in 2024. The average enrollee has 43 plans to choose from.
Medicare Advantage plans have provider networks that limit you to their doctors, and they may not pay for out-of-network providers. You will likely have a primary care physician who directs your care, and you will need a referral to see a specialist. It is important to ensure that the doctors you want to see are in the plan's network.
Original Medicare allows you to see any doctor or hospital that accepts Medicare anywhere in the US, while Medicare Advantage plans have geographic limits. Original Medicare generally does not cover routine dental, hearing, and vision care, while most Medicare Advantage plans provide some coverage in these areas.
When deciding between Original Medicare and Medicare Advantage, it is important to consider your specific needs and preferences. Factors to consider include the network of doctors and hospitals included in the plan, the coverage for prescription drugs and other services such as dental, vision, and hearing care, your health history and anticipated healthcare needs, and the associated costs and deductibles.
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Frequently asked questions
The initial enrolment period for Medicare is 7 months, starting 3 months before you turn 65 and ending 3 months after you turn 65.
Yes, but you will have to pay full price for it. You may also be required to pay a premium for Medicare Part A.
Firstly, you should compare plans and see which ones provide better deals on your medication. You should also check if you can get manufacturer discounts for your medication. Secondly, if you are on your spouse's insurance plan, you should understand how the insurance works and whether the drug coverage is credible.
