Should I continue to take my employer provided health insurance? If so, what Parts of Medicare do I need to sign up for? 

Question from John: I’m approaching my 65^th birthday and Medicare eligibility. I’m currently working, getting health insurance through my employer and the plan is to remain with the same company full time for a few more years. Should I continue to take my employer provided health insurance? If so, what Parts of Medicare do I need to sign up for? 

Answer: This is by far the question we get most often from prospective clients who are turning 65. However, there isn’t a one size fits all answer. It needs to be analyzed for each individual based on what is being taken out of paychecks for health insurance, how much the deductible and out of pocket expenses are, one’s overall health status, as well as current prescription drugs being taken. 

Part B late enrollment penalty myth

Let me first clear up the myth that in John’s case, if he doesn’t take Part B when turning 65, he will face a late enrollment penalty. That’s false. Those who continue to work past 65, or have a spouse who does, and get health insurance provided by an employer can out of Part B and then enroll at a later date of their choosing without penalty. 

Keep employer coverage or opt out and go on Medicare?

The choice is easy for almost everyone who is provided employer sponsored health insurance at no cost to them; Stay on your work policy and opt out of Part B which now costs $203/month. In this case there’s almost no scenario where Part B, at a cost of $2,400 per year, is of value. 

However, if you’re paying for health insurance and there’s a sizeable deductible and other out-of-pocket costs, it’s not cut and dry at all. 10 years ago, we rarely ran into people who were better off dropping employer coverage and going on Medicare A and B at age 65 or older. However, with group health insurance seeing historic rate increases and many employers forced to pass more of those costs onto their employees in the form of large deductibles and/or higher paycheck deductions, that’s changed. I estimate that 25% of those who are Medicare eligible and get their insurance from an employer are best to go on Medicare and a Supplement or Advantage Plan. If $200 or more per month is being deducted from your paycheck for your health insurance, and that or more is being taken out for your spouse, reach out to us at The Health Insurance Store. We will analyze the health plan and your situation and then make a recommendation on the best option. We don’t charge for this service, and you will always get unbiased advice. 

Should I Enroll in Part A, B or both?

As far as what Parts of Medicare to enroll in, that too has multiple answers. 

The majority of those who decide to stay on employer coverage that has more than 20 employees on the policy should enroll in Part A and opt out of Part B. Part A is provided at no cost and can help pay a large portion of your deductible and some or all other out of pocket costs in the event of an inpatient surgery or hospitalization. There’s one exception to this. If your policy is a High Deductible Qualified Health Plan (HDQHP) that utilizes a Health Savings Account, it’s almost always necessary to out of both Parts A and B.

Those who are 65 or older and work for an employer that has less than 20 employees on the health plan may not be able to opt out of Part B. Some companies, including UPMC, force those on “small group” plans to enroll in Part B and will not cover any outpatient services for anyone 65 and older who doesn’t have it. 

The best advice I can give is to never opt in or out of either Medicare Part A or B before reaching out to one of the experienced agents at The Health Insurance Store. Do not rely on friends, family members, anyone at work, or even someone at Social Security to give you the correct information! We’ve met hundreds of people who were given a bad recommendation at a cost of tens of thousands of dollars in unnecessary premiums paid or late enrollment penalties. 

For questions, or to make and appointment, give us a call at 724-603-3403 or email me personally, Aaron@GetYourBestPlan.com.