In the United States, Medicare is a public health insurance program that most people associate with retirement. The reason for this association is most likely because people qualify for Medicare benefits at the age of 65, which is also a common retirement age for so many. And those who are getting retirement benefits at this age are automatically enrolled in Medicare.
But today in this country, not everyone collects Social Security or Railroad Retirement Board Benefits when they turn 65. In fact, the average retirement age in the U.S. is now 66.85 years old, and the official full retirement age for people born after 1959 is 67 years old. This means that you could still be working when you qualify for Medicare.
If you’re still employed when you turn 65, and you have health care insurance through your employer, you might be wondering whether you should enroll in Medicare. While this is a common concern for many people, it’s a personal decision that you should base on your health care needs and economic capabilities. This article can give you some insight into whether you should enroll in Medicare while you’re still working.
Who is eligible for Medicare?
In 1965, the U.S. federal government set the age for Medicare qualification at 65. However, Medicare benefits aren’t restricted to this age group alone.
Those who qualify for Medicare are American citizens, or permanent residents for at least five years, have paid (or whose spouse has paid) Medicare taxes for at least 40 quarters (about 10 years), and meet one of these qualification requirements below:
- Are 65 years old or older
- Are under 65 years old but have a qualifying disability and have been getting Social Security Disability benefits for 24 months or more
- If you have End-Stage Renal Disease your Medicare benefits kick in three months after beginning dialysis or immediately after a kidney transplant.
- If you have amyotrophic lateral sclerosis (ALS) your Medicare benefits begin immediately after you begin collecting disability benefits.
Can you get Medicare coverage if you’re still working?
If you continue working after the age of 65 and you meet the eligibility requirements, you can enroll in Medicare. You can even enroll in Medicare if you are enrolled in a group health care plan through your employer, although it’s not mandatory. However, if you delay Medicare enrollment, you might have to pay a penalty.
You are eligible for premium-free Medicare Part A if you have reached age 65 and you or your spouse have paid Medicare taxes for 40 quarters. If this is true, you really have nothing to lose by enrolling in Medicare Part A. If you decide to enroll in Medicare while you still have coverage through your group plan, Medicare acts as the secondary payer. This means it could fill in coverage gaps in your employer’s plan without additional expenses.
If you work for an employer who has fewer than 20 employees, or if your employer’s insurance plan has minimal coverage, you should seriously consider enrolling in Medicare Parts A and B as soon as you’re eligible. In this instance, Medicare is your primary payer and can offer more comprehensive coverage.
You can enroll in Medicare during your Initial Enrollment Period which is a seven-month period beginning three months before your 65th birthday and ending three months after the month of your birthday. If you have comparable health care insurance through an employer and don’t enroll in Medicare when you are first eligible, you may be eligible for a Special Enrollment Period when your employer’s coverage ends.
If you aren’t eligible for premium-free Medicare Part A, you might end up paying more out-of-pocket to have both your employer coverage and Medicare. The Part A premium is $274.00 per month (in 2022) for those who have paid Medicare taxes for 30 to 39 quarters, and this amount goes up if you’ve paid for less than 30 quarters. If you add this amount to what you pay monthly for your employer’s plan, it might not make sense for you.
Furthermore, if you keep your employer’s plan and enroll in Medicare Part B, you’ll be paying the Part B monthly premium which is $170.10 in 2022. Part B also has an annual deductible of $233.00 (2022).
One other factor you should consider before enrolling in Medicare while you are still working is whether you contribute to a health savings account (HSA). This is because when you enroll in Medicare you won’t be able to continue these contributions.