Medicare needs your attention at age 65 even if you’re still working
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Medicare is not only for retirees.
Anyone who plans to keep working when they reach the eligibility age of 65 should evaluate how — or if — Medicare will fit into their health-care coverage.
The general rule of the program is that you will face penalties for late enrollment if you do not sign up within a period of seven months that begins three months prior to your 65th birthday and ends three years after that.
Qualifying insurance from your employer is one exception. Not all coverage is the same. It could also lead to costly mistakes down the line.
Co-founder and CEO of Boomer Benefits Insurance, Danielle Roberts said that the biggest error is to believe you don’t require Medicare.
These are the things you need to know.
Part A is for hospital coverage and Part B is for outpatient care. Basic Medicare includes both Parts A and B.
You don’t have to pay a premium for Part A if you have worked in the industry for at least 10 years and contributed through either self-employment taxes or payroll. Part B comes with a standard monthly premium of $170.10For 2022, however, beneficiaries with higher incomes pay more via monthly adjustments. See the chart below.
Over 40% of beneficiaries opt to have their Parts B and A benefits delivered by an Advantage Plan or Part C. This typically includes prescription drug coverage or Part D and can or may not include a premium.
Restricted beneficiaries may continue with Medicare, but they might be eligible for a combination of it and a “special” Medicare. Medigap policy A stand-alone Part B plan or a standalone Part D plan. The chart below shows that drug coverage costs are higher for beneficiaries of higher income.
Late-enrollment penalties last a lifetime. The surcharge for Part B is 10% per 12-month period that you were supposed to have enrolled, but weren’t. The penalty for Part D is 1%. national base premium —$33.37 in 2022 — multiplied by the number of months you didn’t have Part D or creditable coverage.
For workers in companies that have at least 20 employees, the general rule is to delay signing up for Medicare if your group insurance ends, which means you are either retiring or leave your job.
Many of those in such a situation will delay Part B and sign up to Part A, even though it is free, as long as there has been ten years worth of payroll tax payments.
Roberts said, “It’s not hurt you to possess it.”
She said that if your HSA is paired with an employer-sponsored high-deductible plan, you will not be able to make any contributions until you are enrolled in Medicare.
If you are able to keep your existing coverage while delaying any or all of Medicare, ensure the plan meets both Part D (or Part B) requirements.
You can always ask your insurer or human resource department if there are any questions about signing up.
“I find it is always good to just confirm,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans.
To avoid any penalties later, it is a good idea to sign up for Medicare if your company has fewer than 20 workers.
This applies regardless of whether or not you remain on your employer’s plan. You can choose to stay on the plan, but Medicare will be your primary coverage.
Additionally, anyone who gets insurance through the public health exchange — either healthcare.gov or a state marketplace — is expected to switch to Medicare at age 65.