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65 and Still Working – Should I Enroll in Medicare? (Part 2)

What do you think about when you turn 65 in this country?   For most people, Social Security and Medicare will quickly come to mind.  Last week were talking about the basics of Medicare.  This week we’ll pick up where we left off with Medicare Part B.

Part B covers doctors’ bills.  It is possible to sign up for Part A but not Part B.   Part B carries a separate premium (unlike Part A which has none) that, when you collect Social Security, is deducted from your Social Security payment.  The premium ranges from $96.40 to $110.50 for most people.  Because it is optional, some may decide to delay signing up for it if they have other insurance, through their employer or former employer, for example.  If you wait, however, you could be hit with higher premiums, 10% more for each year you could have signed up and didn’t.  And that lasts for the rest of your life.

 But, the rules on when you need to sign up are confusing.  Most should enroll at age 65 or when they retire, whichever is later – maybe. If you still have health insurance through your employer or your spouse’s employer you might be able to delay signing up, as long as there are at least 20 employees in your company.  Otherwise, you should enroll.  There are also special rules for federal government workers and other groups.

 Medicare Part D is the prescription drug coverage introduced a few years ago.  Part D rules differ from Parts A and B.  Enroll too late and there is also a premium penalty, 1% for each month you wait. If you have “creditable” drug coverage from your employer’s plan, then the penalty may not be imposed.   Your employer must tell you each year whether its’ plan is better than Medicare’s.

 Medigap insurance covers what Medicare doesn’t.  So, for example, it may cover some of your Medicare co-pays.  These plans are regulated by the government, meaning there are a few basic plans that will cover certain standard things, the more comprehensive the plan the higher the premium.  Switching in and out of these plans can be tricky. If you want to change plans without going through a medical screening process there are separate rules that apply.

 Another option that Medicare offers is called Medicare Advantage.  Most Advantage plans are HMO managed care plans.  If you are enrolled in one of these plans you don’t get Parts A and B and you don’t need a Medigap policy.  The premium will generally be lower but the negatives to these plans are similar to other HMOs in that your options for treatment may be more limited.

 Turning 65 is a milestone.   Making a decision on Medicare enrollment will have long term ramifications so do your research and choose wisely.


  • Howard Attermann

    January 25, 2011

    Yale, I enjoy reading your newsletter, especially as I get older, and my parents get older! I am 59, my parents are mid 80s. It occurs to me that it would make sense to sit with you for a consultation. The theme that jumps out in your columns is to prepare early. My parents and I may be at two extremes, that is, I’d be on the early side, they the “late” side.

    How do you suggest we proceed?

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