Written by Carol Trehearn
Medicare is one of those topics that many people know about but don’t really understand.
For instance, you might have heard numerous times that you will qualify for Medicare when you turn 65. While this is correct in general, it does not mean that Medicare is the best and only option for everyone.
With this in mind, let’s take an in-depth look at Medicare and determine when and why someone may, or may not, be eligible and/or should skip signing up for Medicare coverage.
Is 65 Really the Magic Age of Medicare?
When you’re first eligible for Medicare, you have a 7-month Initial Enrollment Period to sign up for Part A and/or Part B. For most people, eligibility begins at age 65. In this case, the enrollment window includes the three months before your birthday month, your birthday month, and the three months after. Some people who are younger than 65 can also qualify for Medicare; this includes those with permanent kidney failure and people with certain disabilities.
What If I’m Still Working? Although you will become eligible for Medicare at 65, if you are still working and you have coverage with a group health plan through your employer—and your employer has 20 or more employees, then you don’t have to enroll in Medicare at age 65 unless you want to. But if you work for a small company with fewer than 20 employees, you will need to sign up for Medicare Parts A and B. This also applies if you have coverage through a spouse who is still working.
Enrolling Anyway Might Be Wise
Even if you already have health insurance through your employer and you have no plans to stop working, it might still be a good idea to consider enrolling in Medicare Part A when you turn 65. Medicare Part A is typically free, and this way, you will have it set up and ready to go as a secondary insurance option. It could also help pay for care that your main plan does not fully cover.
Rules Regarding Health Savings Accounts
If you have a health savings account (HSA) through your employer and you plan on continuing to contribute to it, you will not be allowed to do so if you are signed up for Medicare. Unfortunately, people who are enrolled in a Medicare plan cannot make any contributions to an HSA, even if you use the HSA to help cover co-pays and other out of pocket costs that are part of your employer’s health insurance plan. Looking at your monthly medical expenses and how not having an HSA will impact your finances should factor into your Medicare decision.
A Medicare Advantage Plan is Another Option
If you are planning on retiring soon and will no longer be covered at work, Medicare is definitely a great option for your health insurance coverage. While you will qualify for Medicare Part A and Part B, you may also want to look into different Medicare Advantage plans, which are commonly called Medicare Part C. If you are used to having vision and dental coverage as well as help with prescription drug costs, opting for a Medicare Advantage plan can provide you with health coverage that may be similar to what you had through your employer. Through private, Medicare-approved insurers, there are Medicare Advantage PPO and HMO plans; in the case of a PPO plan, you can choose which health care provider you get to see.
Make the Best Decision for You
Like many things in life, health care coverage for older adults is not set in stone. While many people should sign up for Medicare when they celebrate their 65th birthdays, others may wish to hold off until they retire. By doing your research, looking at costs and weighing your options, you will be able to make a well-informed decision about your health insurance.