After the article What is Secondary Payer in Medicare/August 20, 2022, we received more questions about options when you turn 65. Below is an excellent description of how this works.
Baby boomers are turning 65 with an average of 10,000 new Medicare beneficiaries daily starting in 2018. We also had more working adults over 65 than we have since Medicare was created in 1965, but then came the Great Retirement with some new Medicare beneficiaries switching from commercial to Medicare. Others kept their spouse’s commercial coverage and are covered by this plan. This means that 65+ year olds have insurance options. Let’s go through some choices as we develop a spreadsheet to complete the comparisons below.
Decision points and appropriate research to support decisions.
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Work: Continue with your employer-sponsored insurance plan.
What is your monthly premium? What is your deductible and copayment for services? What do you pay for drug benefit – generic drug options? What is your upper limit on out-of-pocket expenses?
End your employer-sponsored plan and switch to Traditional Medicare.
What would be the monthly premiums of Traditional Medicare? Part B/outpatient, Part D/drugs, and optional, supplemental insurance to cover deductibles and co-pays when services are used? What is the out-of-pocket cost without co-pay for Part A/Inpatient Hospital and All Outpatient Services/Part B when used? Your personal health history plus historical use must be included to make an assessment. How much would you pay for your prescription drugs – as this can be a significant difference depending on the drug? MyMedicare.gov has a free Medicare and You brochure with an excellent description of the services and resources that are included in Traditional Medicare.
Terminate your employer-sponsored plan and switch to Medicare Advantage/Part C.
Costs will be different than traditional Medicare, but there will still be a monthly Part B premium (covers doctor visits, outpatients, and durable medical equipment) with plan-specific monthly Part D (prescription drug) premiums included in the monthly premium under Part C. Each Medicare Advantage plan has its own coverage packages and monthly premiums.
Note: If you choose to continue with your employer-sponsored plan, you can still add Medicare Part A for free to your employer-sponsored plan. Medicare will become a “Secondary Payer” because you are still working and have an employer-sponsored plan, with the employer’s insurance plan being primary. Once you retire, even if you have an employer pension benefit, Medicare will become primary.
Summary: Depending on the monthly premiums, deductibles and co-pays of your current employer-sponsored insurance plan – and your current health status – review your Medicare options. Pay special attention to drug benefits with your employer plan, as all Medicare plans have “tiers” of drug coverage—higher-priced drugs can usually have significantly higher co-pays. There is also an annual enrollment period after initial/age 65, so you can decide what works best for you each year.
Do your “happy dance” when you turn 65 and explore your insurance options! Yes
Day Egusquiza is the President and Founder of the Patient Financial Navigator Foundation Inc. – an Idaho-based family foundation. For more information, call 208-423-9036 or go to pfnfinc.com. Have a topic for Health Care Buzz? Please share at [email protected]