Seniors working past 65 with medicare questions – There are over 44 million seniors relying on Medicare for health coverage in retirement. It is important that baby boomers understand when to enroll so they have make the most of the benefits while avoiding costly penalties.
Talking with an insurance agent can make choosing a healthcare plan easier. Agents are licensed, educated and have a fiduciary responsibility to you, as their client.
Seniors Who Will Work Past 65
If you decide to continue working when you turn 65 and your employer provides you with health insurance, you will not need to sign up for Medicare when you are first eligible. You will want to contact the benefits coordinator in the office that you work to be sure your coverage is considered creditable coverage through Medicare.
If your employer sponsored plan is considered creditable coverage you may still want to sign up for Medicare Part A. You can qualify for premium-free Part A if:
- You already get retirement benefits from Social Security or the Railroad Retirement Board
- You are eligible to get Social Security or Railroad Retirement benefits buy have not filed
- If you or your spouse had Medicare-covered government employment
- You received Social Security or Railroad Retirement Board disability benefits for 24 months
- You have End-Stage Renal Disease (ESRD) and meet certain requirements
Even if you have employer health coverage, having Medicare Part A can provide you with a secondary form of insurance in case you need it. If you will be eligible for and intend to take advantage of a health savings account, you will want to wait to enroll in Medicare Part A.
When your group plan or company stops offering your health coverage or your coverage runs out, you will qualify for a special enrollment window to sign up for Medicare. This window is open for eight months and if you enroll during that time frame you will get the coverage you need without a penalty.
If you signed up for Social Security before turning 65 you will be automatically enrolled in Medicare Part A and Part B when you turn 65. You can then cancel Part B if you are going to receive coverage through a group health plan.
If you will not have employer coverage come age 65 then enrolling in Medicare during your initial enrollment window would be a good idea. You will want your healthcare needs taken care of and enrolling when you are first eligible can save you long-term on penalty costs.
Part A Late Enrollment Penalty
If you do not sign up for Medicare when you are first eligible you could incur a Part A penalty. Most people receive Part A of Medicare premium-free, those who do not pay up to $422 each month in 2018.
If you do not sign up for Medicare Part A when you are first eligible, you could face a late enrollment penalty when you do enroll. The Part A penalty is a 10% higher monthly premium for twice the number of years you were eligible for Part A but did not enroll.
If you did not enroll in Medicare Part A when you were first eligible for, and the after 3 years signed up, you would have to pay the higher premium for 6 years. If you meet certain conditions that allow you to sign up for Part A during a special enrollment period, you will not have to pay a Part A penalty.
Part B Late Enrollment Penalty
For most seniors, eligibility for Medicare Part B is the same as for Part A. Many people are automatically enrolled into Part A along with Part B. If you don’t qualify for automatic enrollment, you will want to sign up manually.
There is a monthly premium for Medicare Part B, $134 per month for 2018. This amount is typically taken out of the social security check each month, some seniors may receive a bill.
If you enroll in Medicare Part B late or drop coverage, a late enrollment penalty may apply to you when you sign up or re-enroll. The penalty is a 10% higher premium for every full 12-month period that you were not covered under Medicare Part B. In some cases, you may qualify for a Special Enrollment Period, this allows you to enroll without a penalty.
If you have limited income and resources your state may help you pay for Part A, and/or Part B. You may qualify for Extra Help to pay for your Medicare prescription drug coverage.
Part D Late Enrollment Period
You are first eligible for a Medicare Prescription Drug plan when you become eligible for Medicare Part A or Part B and live in the service area of a Medicare Prescription Drug Plan. Part A and B of Original Medicare cover certain prescription drugs in specific situations, they do not cover most of the drugs you would take at home.
If you need a prescriptions drug plan you can enroll in a Medicare Part D or Medicare Advantage Prescription Drug plan. It is best to work with a licensed agent in your state, so you can find the most beneficial plan for you.
If you do not enroll in a Medicare Part D plan when you are first eligible, and you go without creditable prescription drug coverage for more than 63 days in a row, you may face a late enrollment penalty.
Creditable prescription drug coverage is coverage that is expected to pay as much as standard Medicare Part D coverage.
The Part D penalty depends on how long you go without creditable prescription drug coverage. You can determine the penalty by multiply 1% of the national base premium times the number of full months you were eligible for Medicare Part D but did not enroll and did not have creditable coverage. The amount is rounded to the nearest $0.10 and added to your Part D Plan premium.
If you owe a penalty when you sign up for a Medicare Prescription Drug plan, you could have to pay this increased premium for as long as you have a Medicare Part D plan.
Avoid Late Enrollment Penalties
Signing up for Medicare Part A, Part B, and Part D when you are first eligible is the easiest way to avoid late-enrollment penalties with Medicare.
The three months before you turn 65, including the month you turn 65 and three months after are usually considered the Initial Enrollment Period. Medicare enrollment and eligibility work differently if you qualified for benefits before age 65.
If you are not confident that you will qualify for a Special Enrollment Period, talk to your employment-based health plan administrator or call Medicare.
If you do not qualify for a Special Enrollment Period or if you let yours expire, be aware that the longer you postpone enrollment, the higher the penalty will be if you ever decide to sign up for this coverage.
Individuals with limited incomes may qualify for the Medicare Savings Programs, which help pay for premiums, deductibles, coinsurance, and co-payments. The Medicare Extra Help program is available to help with Medicare Part D costs. You should contact the Medicaid or State Health Insurance Assistance program in your state for more information on these programs.