Byron Moore, CFP® and Mike Jones

Medicare Options for Those Working Beyond 65

By Byron Moore, posted October 15, 2018
Originally published in the News-Star and the Shreveport Times on Sunday, October 14, 2018.
 

Question: I turn 65 this year, but I’m still working. Do I need to sign up for Medicare? I don’t really understand how it works.Retired couple_small.jpg

Answer: Like so many other things in life…that depends. 

According to www.medicare.gov, you can sign up for Medicare (part A and/or B) during the so-called Initial Enrollment Period - anywhere from three months prior to the month you turn 65, the month you turn 65 and three months after the month you turn 65. That’s seven months total if you’re counting. 

So, what’s this about part A & part B? This is the original Medicare. 

Back when Medicare was first created (1965), it was conceived as a combination hospitalization and medical plan. So, part A pays for hospital stays and most of the charges relating to that. 

Part B pays for so-called medical costs (most often related to visits to your doctor’s office, rather than the hospital). 

Later, Parts C & D were added. They are provided by private insurance companies. 

Signing up for Medicare part A (hospitalization) is required for most people, not optional. And if you are eligible for Social Security benefits, you will most likely pay no premium for part A, so signing up will likely cost you nothing. 

Signing up for Medicare part B (medical insurance) is not required at age 65, though in many cases, you’ll have to pay a late penalty to get back in if you do not sign up at age 65. 

The standard Medicare Part B premium is $134 per month. If your income is high enough (over $85,000 for a single person), you could pay more. For example, if the income of a single person exceeds $160,000, their monthly premium would be $428 per month.

Your situation is an exception to the rule of signing up for Medicare at age 65. If you are still employed at age 65 and working for an employer with 20 or more employees that offers health insurance, you are not required to sign up for Medicare. You may choose to do so, but you are not required to do so.

You only are only required to sign up for Medicare once – either during that seven-month period surrounding your 65th birthday, or within 8 months after you lose access to your employer group health insurance coverage if you work beyond age 65. 

If you are working after age 65 for an employer with 20 or more employees and which offers health insurance, your employer’s health insurance is first in line to pay for your covered healthcare costs. Medicare (if you are sign up for it at that time) is secondary. 

However, if you sign up for Medicare at age 65, you can no longer put money into a Health Savings Account (HSA). So, you’ll have to decide which is more important for you – to have Medicare as your back up insurance if you are working past age 65 or retain the option of putting money in an HSA when working past 65.

If you sign up for Social Security at age 65, they will likely sign you up for Medicare at the same time. If that’s not what you want, you’ll need to be sure to tell them. 

This can all be a bit overwhelming; and believe me I’ve only begun to scratch the surface.

I have a generic summary of Medicare Parts A, B, C & D. It’s yours free for the asking by emailing me at bmoore@argentadvisors.com

About one in four Americans choose to work past age 65. For some, they work because the must. Others work because they cannot see themselves doing anything else. Still others maintain a passion for what they do as see work as a privilege. 

Be sure to educate yourself on your Medicare options if you choose to work past age 65. You’ll need to do some homework, talk to your employer, check out the www.medicare.gov website to understand your options and understand the deadlines in play.

One way or the other, retirement is a transition. Be sure to bring enough healthcare coverage along with you on the journey.

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