Let’s say that you work full time and have an excellent medical insurance plan, but it’s costly, especially if you also have been covering the rest of your family. Say that the spouse is 60 and permanently disabled and has been told he’s eligible for Medicare. A common question is whether the working spouse should remove the disabled spouse from the employer’s coverage and go with Medicare. What’s the best option?
NJ Money Help’s recent article entitled “Should we take Medicare or keep an employer health plan?” explains that Medicare has different components to cover specific services: Medicare Part A, Part B, and Part D.
Medicare Part A helps pay for hospital and facility costs. Medicare Part B helps pay for medical expenses, like doctors and medical supplies. Medicare Part D is for prescription drug coverage. Most people don’t pay a monthly premium for Part A, but there are premiums associated with Part B and Part D coverage.
Suppose an individual is 65 and has received disability benefits from Social Security for 24 months or has received certain disability benefits from the Railroad Retirement Board for 24 months. In that case, they will automatically get Medicare Part A and Part B.
You should also know that you can decide to delay Medicare Part B by contacting Social Security after you become eligible and receive the card. Discuss this option with your employer’s health care benefit department to understand how Medicare may or may not work with your current coverage. This is because some plans and health benefit plans (especially those with fewer than 20 employees) become secondary to Medicare when an enrollee becomes eligible for Medicare.
If you decide to participate in Medicare Part B, understand that there’s a cost. The premium is based on your income, and the standard Part B premium in 2021 is $148.50 per month if your income was $176,000 or less in 2019 for a married filing joint return. The Medicare Part B premium increases as your income increases.
Medicare Part B pays for many of your medical bills. However, not all the costs for covered health care services and supplies are included. As a result, many seniors buy a supplemental insurance plan called Medigap. This plan will pay for some of the remaining health care costs, like co-payments, coinsurance, and deductibles that Medicare does not cover.
Remember that it’s essential to enroll in Medigap coverage within six months following Medicare Part B enrollment. Medigap is an additional cost along with your Medicare Part B premium and is sold through a private insurance company. To determine more cost-effectiveness, you’ll need to compare the Medicare costs with your employer plan.
Reference: NJ Money Help (Aug. 13, 2021) “Should we take Medicare or keep an employer health plan?”
