Though we associate Medicare with retirement, many people work past the age of eligibility for Medicare benefits. Working later is getting more common. Whether it’s for financial reasons or because you enjoy your career, working until age 70 is more common than it was for the previous generation. Retiring at age 65 may not appeal to someone who is healthy and energetic, enjoys working or chooses to delay Social Security in favor of a higher benefit. However, enrolling in Medicare at age 65 is required to avoid a late enrollment penalty. It is important to understand how Medicare works with private insurance while you or your spouse are employed, and the company provides coverage.
Required Medicare enrollment
If you are already collecting Social Security benefits, enrollment in Part A and Part B is automatic, and you can expect a Medicare card in the mail three months prior to your 65th birthday or on your 25th month of disability. If enrollment is not automatic, sign-up is mandatory during the initial enrollment period. The application process is done through the Social Security Administration website.
Some Medicare beneficiaries choose to enroll in Part C, also known as Medicare Advantage. Medicare Advantage plans are known for bundling Part A and Part B benefits, along with additional benefits, such as Part D prescription drug coverage. Part C plans can include a range of additional items not covered under Original Medicare benefits, such as transportation to the doctor, over-the-counter drugs, vision and dental care, and gym memberships.
Coordination of benefits
It is acceptable to be covered by both Medicare and a private health insurance plan simultaneously. This does not imply duplicate coverage but rather a coordination between the two plans based on established rules of who pays first. The company that pays first is considered the primary insurance plan. The secondary insurance carrier then reviews the claim to determine benefits for covering the unpaid portion.
Rules on who pays first
Medicare pays first if you:
- Have retiree insurance, i.e., from former employment (you or your spouse).
- Are 65 or more, have group health coverage based on employment (you or your spouse), and the company employs 20 people or less.
- Are under 65 and have a disability, have coverage based on current employment (you or a family member), and the company has less than 100 employees.
- Have Medicaid.
Your group health plan pays first if you:
- Are 65 or more, have group health coverage based on employment (you or your spouse), and the company employs 20 people or more.
- Are under 65 and have a disability, have coverage based on current employment (you or a family member), and the company has 100 employees or more.
A separate rule applies if you have Medicare due to end-stage renal disease.