Tags: Franklin-Prosperity-Report-Medicare

Franklin Prosperity Report Reveals What Workers Over the Age of 65 Must Know About Medicare

By    |  

The following article is from the May 2014 issue of The Franklin Prosperity Report. To find out more about The Franklin Prosperity Report, click here.

You’re 65 and Still Working — Is Medicare for You?

Longer life expectancies, the desire to remain relevant, and retirement nest eggs cracked by the Great Recession mean many workers age 65 and older are still on the job. With that decision comes questions like, “Can I remain with my employer’s healthcare plan?” and “Is Medicare a better option than an employer plan?”

Cal Hero, MedicareMall.com marketing manager, says part of the answer to those questions is simple. “Almost everyone who is eligible should sign up for Part A, the premium-free portion that covers the costs of staying in a hospital or skilled nursing facility.”

Editor's Note: Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

Anyone who has paid into the Medicare system (through payroll taxes) or whose spouse paid into the system for at least 10 working years, is eligible at age 65. “Over 98 percent of seniors are eligible for premium-free Part A coverage,” Hero says. The exception to that rule is if you’re enrolled in a high-deductible health plan. Internal Revenue Service rules say you’re not allowed to contribute to a health savings account if you are enrolled in Medicare or are receiving Social Security.

Here’s what you need to know to sort out the ABC’s and Part D’s of Medicare.

How Big Is Your Employer?

The size of your employer factors heavily into whether you must enroll immediately in Medicare Part B (the part that covers medical) and Part D (the one that covers prescription drugs). If you’re insured by an employer with 20 or more employees or you’re under a spouse’s plan that’s through an employer of 20 or more employees, you don’t have to sign up for Medicare. Your current plan will remain the primary payer for medical bills for physicals and trips to the doctor. And Hero says if you put off signing up for Medicare, you’re entitled to a “Special Enrollment Period” to enroll without penalty up to eight months after you retire.

However, if you’re working for a company with fewer than 20 employees, Medicare Part B is a must because it’ll become the primary payer for medical bills. Your employer plan reverts to the role of secondary payer. “Part B coverage runs between $105 and $336, depending on income,” Hero says. So don’t forget to enroll in Part B or you risk being left 100 percent on the hook for medical bills that your employer plan may not cover.

Just don’t give in to pressure from your employer to drop its plan and elect Medicare. It’s in your employer’s best interest for you to drop the plan and enroll in Medicare, Hero points out. “Employers can see significant premium savings if they advise their 65 and older Medicare-eligible workers to enroll in Medicare Part A and B, along with a Medicare Supplement Plan.”

Once you sort out whether you have to enroll, you can decide what parts of Medicare might be right for you.

Assessing the Benefits

Coverage benefits vary based on an employer’s plan. As a result, Medicare Part B may result in lower out-of-pocket costs for trips to the doctor’s office. Or your employer-provided health plan may have limited drug benefits — Hero points out not all employer health plans offer robust Rx coverage.

“Medicare could offer the most cost-effective alternative,” he says. “On the flip side, you may be taking a specialty drug that’s covered under your employer plan that’s not covered by Medicare Part D. An employer group plan may include providers that Medicare doesn’t in its network.”

When Medicare Isn’t Mandatory

If you’re happy with your current plan, Hero says you can limit your Original Medicare enrollment to Part A. “While there is a monthly premium for everyone enrolled in Medicare Part B, staying enrolled in Part B isn’t mandatory. If your current plan provides good medical coverage, you can disenroll from Medicare Part B.”

Hero cautions that even if you’re delighted with the coverage your employer currently provides, workers 65 and older shouldn’t neglect weighing the long-term financial implications of not enrolling in Medicare upon initial eligibility.

“If you opt out of Part B but decide to enroll later, in most cases, you’ll have to pay a penalty of 10 percent of your Part B premium for every 12-month period you could have had Part B coverage but didn’t,” Hero says. This penalty will stick with you as long as you remain on Medicare.

Currently, the late enrollment penalty associated with Medicare Part D is 1 percent of the average Medicare prescription drug plan premium. “In 2013, that averaged a little over $30 per month,” Hero says. “You may be able to avoid the Part D penalty if you had similar or better drug cover¬age during the time you were eligible for Medicare Part D coverage but weren’t enrolled in a Part D prescription drug plan.”

Think maintaining your employer health plan while also joining Medicare might be your best bet? You’ll need to note this decision on your “Initial Enrollment Questionnaire.” “About three months before you enroll, Medicare will send you a letter with a username and password for MyMedicare.gov. That’s where you will fill out your IEQ,” Hero says.

The Franklin Prosperity Report is dedicated to helping its readers save money each month with creative ways to cut your costs on groceries, insurance, travel, and everyday expenses so you can save more and spend less this year. To join The Franklin Prosperity Report, click here.

Franklin Prosperity Report, Franklin, Prosperity, Report

Related Stories:


© 2018 Newsmax Finance. All rights reserved.

1Like our page
The following article is from the May 2014 issue of The Franklin Prosperity Report. To find out more about The Franklin Prosperity Report, click here.You're 65 and Still Working - Is Medicare for You? Longer life expectancies, the desire to remain relevant, and retirement...
Thursday, 24 April 2014 02:36 PM
Newsmax Media, Inc.

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved