When someone is about to turn 65 and is still working and eligible for health insurance through their employer, they will often ask for guidance from their employer’s Human Resources department about whether they should enroll in Medicare.
While this is understandable, there are two things you should know when seeking Medicare information from your employer.
First, your employer is prohibited by federal law from encouraging you in any way to leave the coverage you have through them and enrolling in full Medicare.
The reason for this is if you leave employer coverage to go on full Medicare, this shifts much of the cost of your health care from your employer to the federal government.
Purely for budget reasons, the federal government wants your employer to continue to pay for your health care.
Unfortunately, this is true even when it is in your best interest – both financial and health – to leave your employer’s coverage and go on full Medicare.
Second, you have the right to leave your employer’s coverage at any time to go on full Medicare beginning the first day of the month in which you turn 65 – or the first day of the month before if your birthday is actually on the first day of the month.
You do not have to wait for your employer’s yearly insurance open enrollment period. Your right to go on the Medicare you have earned through your lifetime of work overrides your employer’s election period timetable.
Also, you do not have to make this choice only when you turn 65. Once you are eligible for Medicare you can leave your employer coverage at any time to take full advantage of your Medicare – whether your are just turning 65 or at any time past your 65th birthday.
Why you may want to leave you employer coverage and go on full Medicare
There are several reasons leaving employer coverage and going on full Medicare may be your best option.
First, you may pay less every month with full Medicare than you pay for your employer coverage. This is often true because once you go on full Medicare the government subsidizes your health care by around $700 per month. At the same time, an increasing number of employers have reduced how much they subsidize their employee coverage.
In most states the cost of full Medicare is around $275 to $300 per month, This includes Medicare Parts A and B as well as a Plan G Medicare Supplement and a Medicare Part D drug plan. The costs are a little higher in some states such as New York, Massachusetts, Connecticut and Florida.
The second reason leaving your employer coverage and going on full Medicare is your annual deductible and out-of-pocket maximum is likely much less with full Medicare than it is with coverage from your employer.
Most employer coverage now has an annual deductible of at least $1,500 and some employers have much higher deductibles of as much as $4,000 or more.
The annual out-of-pocket maximum with most employer coverage is usually at least twice as much as the annual deductible – usually $3,000 to $6,000.
With full Medicare – including a Plan G Medicare Supplement, the annual deductible and out-of-pocket maximum are both $183.
After you pay the once-a-year Medicare Part B deductible of $183 all of your costs are covered 100 percent for the rest of the year.
The final reason leaving your employer coverage to go on full Medicare may be a good choice is with full Medicare you can go to any doctor or hospital anywhere in the country that accepts Medicare – as almost all do. With most employer coverage, you are either limited to a certain network of doctors and hospitals or you may have to pay more if you use a doctor or hospital outside of the plan’s network.
The restriction to having to use a doctor or hospital from a network can affect your health outcome if you have or develop a serious health issue.
In today’s information-rich world, you have the ability to research and identify the doctor or hospital you believe gives you the best chance for the best health outcome regardless of where they are in the country.
Full Medicare allows you to go to that doctor or hospital with all of your costs being covered 100 percent after the once-a-year $183 deductible.
This is not the case with most employer coverage.
Please click on the following link to read a blog I recently wrote about comparing your employer coverage to your Medicare options.
Whether you are about to turn 65 and become eligible for Medicare or if you are 65 or older and still on employer coverage, I would appreciate the chance to work with you to help you compare your employer coverage options with full Medicare.
Simply click on the link below to schedule a free, no-obligation Medicare consultation.
I look forward to talking with you soon.
p.s. If you know of someone who needs help with their Medicare, please share this with them.