Skip to comments.Should You Apply for Medicare Even Though You're Still Working?
Posted on 07/28/2013 9:14:44 AM PDT by Kaslin
Dear Carrie, I'm turning 65 next year and plan to work for a couple more years. Should I apply for Medicare even though I have coverage through my employer? --A Reader
Dear Reader, This is an important question that affects a growing number of workers. In fact, data from the University of Michigan's Health and Retirement Study (2006 to 2010) sponsored by the National Institute on Aging shows some eye-popping trends. According to the study, 79.5 percent of respondents expect to work past age 65, with 65.2 percent expecting to retire by age 80 -- and 22.4 percent planning never to retire at all!
Your question is doubly important because, while enrollment in Medicare is automatic if you've already filed for Social Security, if you're still working and not receiving Social Security, enrollment is in your hands. And it's not just a question of whether or not you need Medicare coverage right now. You must apply for Medicare within a certain time window to avoid getting hit with a penalty for late enrollment.
Know your options and timing
Even if you're not receiving Social Security benefits at age 65, you're still eligible for full Medicare benefits. This includes the premium-free Part A (hospitalization), as well as Part B (doctors visits and outpatient care) and Part D (prescription drugs), for each of which you pay a premium. But it's up to you to contact Social Security to sign up, and you must do this within what's called your Initial Enrollment Period. Generally, this period extends from three months before the month you turn 65 until three months after the month you turn 65 -- a seven-month period in total. If you want your Medicare benefits to start right when you turn 65, you have to sign up during the three months before your birthday.
If you miss this Initial Enrollment Period, you may have to wait until what's called the General Enrollment Period, which runs from Jan. 1 to March 31 each year. There are a couple of drawbacks to waiting. First, your benefits won't start until July 1 of the year in which you enroll. And second, you may have to pay a penalty.
Apply at least for Medicare Part A
The good news is that, in a situation such as yours, you don't have to enroll in all parts at once. If you have insurance coverage through an employer plan, you can apply for the premium-free Part A only and still meet the enrollment deadline. Part A might help pay for some of the costs not covered by your group plan. And as long as you have group coverage, you won't be penalized for delaying Part B; you can choose to enroll at any time while you're still covered by that plan. When your employment or group coverage ends, you then have eight months in which to sign up.
Consider whether you need Part B
Whether to enroll in Medicare Part B is a cost/value decision. Monthly premiums range from $99.90 to $319.70, depending on your income and filing status. So your decision to enroll in Part B while you're still working might depend on how much money you're making.
You also need to consider what you're getting. If you work for a company with 20 or more employees, your group health plan is still the primary payer of your medical bills, making your Medicare benefits of limited value.
However, if your company has fewer than 20 employees, Medicare would be the primary payer and your company plan the secondary payer. In this case, it's best to talk to your employee benefits administrator. The Part B coverage may well be worth the monthly premium.
What if you want to drop Part B?
It's not unheard of for insurance needs to change as people move in and out of the work force. So what happens if you retire, enroll in Part B and then find yourself back at work with employer coverage once again? In this situation, you can drop Part B while working and reenroll at any time while you have group coverage or during the eight months after your employment ends without risk of penalty or higher premiums.
Stay on top of the dates
For now, I'd mark the dates of your Initial Enrollment Period on your calendar. Then when the time comes, call the Social Security Administration at (800) 772-1213 to sign up. You can also go to medicare.gov for more detailed information. No matter how long you choose to work, there's no reason not to take advantage of the benefits you've earned.
Most employers will kick you off your plan as soon as you reach 65.
What if you don’t want any of this crap. Can you get a refund?
No. Just bend over......
I am retired Air Force, and got kicked off when I turned 65. I had no say in the matter, even though I am still working.
If you can continue a private plan insurance, you have another factor to consider. Does your doctor take Medicare patients? Do you have health needs that require specialists who either take no insurance or only private plan insurance?
There is an existing lawsuit fighting over the legal mandate to enroll in Medicare upon age 65; the rulings so far are that you have to sign up for Medicare when you take Social Security or you can opt not to use either, but there is not either/or of SS but no Medicare or Medicare but no SS.
Medicare Lawsuit Update
It was my understanding that I had to enroll in part A at 65 although still working. I started Social Security and Part B when I turned 67 and continued to work. The following April Uncle Sam wanted a big bite of those SS payments as they become taxable while working. My employer no longer carries any coverage for me but reimburses me for the supplement. All things considered, I came out ahead although those extra big quarterly payments to IRS are painful.
Bottom Line when you turn 65:
You are entitled to Medicare A (Hospitalization) if you worked for 10 years or 40 quarters where money was deducted from your paycheck and paid to the US treasury for you.
You do not have to enroll in Medicare B if you have group insurance that is as good as or better than Medicare B benefits. By not joining until you lose your group insurance benefits, you save the monthly premium of $104.90 (minimum).
One may be penalized if one does not have a prescription drug plan as good as or better than Medicare Part D if they do not enroll in a Part D plan when first entitled to Medicare A or enrolled in Medicare B and wants to enroll in a Medicare Part D Drug plan at a later date. The penalty for enrolling at a later date is 1% times the monthly national average for a stand alone Part D Plan. If valid, this amount is taken out of one’s Social Security benefits every month they are subsequently enrolled in a Medicare Part D prescription drug plan.
I am putting what would've been my monthly payments aside in case I need them for futrue medical care.
Same here. I am a retired Marine and it was a problem finding a doc who would now take medicare in our area..it was existing pts only or not taking new pts...so I go to a concierge doc, former Navy doc...membership is 2500.00 for me ( other plans for families) and it is great..I get a superbill and send it to TFL. Best of all, she calls back, I can get in anytime ( she takes only 200 pts) and has several military retirees..
Also if you do take medicare out later than at age 65 you get fined and if you are drawing social security you are paying for part B anyway.
Let me ask you, do you still pay homeowners insurance even though your mortgage might be paid off?
How many fires have you had?
Do you get my point? YOU WILL BE SICKER IN 5 YEARS than you are today, unless of course you are dead by then. You are planning the future based on your past.
That is a VERY stupid thing to do. Your past is NOT a crystal ball into your future, not at all!
You are wrong.
I have MANY clients who do not draw Social Security yet ARE on Medicare Part A AND Medicare Part B.
Likewise, I have a client who did not take Medicare Part B until he was over 80 years old, as he continued to work until then, but he DID draw Social Security for many years before he took out Medicare Part B.
Please do not post nonsense, this is serious business.
I do this for a living and you should not advise people
FWIW, my past experience with doctors and medical treatments has caused me to decide to stay as healthy as I can for as long as I can.
Thanks for the cautionary information.
I just hit my initial enrollment period, retired but I won’t be taking SS benefits until 67.
I think I need more information from my HR dept on my secondary insurance before I actually do the Medicare application.
We were notified by our insurance companies that on our 65th birthday our insurance would be canceled.
we’ve both been on medicare for over 10 years and still work.
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