Considerations before turning 65

You're turning 65 years old

You're getting flooded by phone calls from Medicare call centers, your mailbox is full of Medicare advertising.

BUT - do you really need to do anything regarding Medicare when you turn 65?

We hear every day "but I called the Social Security office and they said that I had to enroll into Part A".  Wrong.

So, let's start with the very, very basics. You are turning 65 years old. Congrats, #1. Welcome to the world of Medicare chaos #2.

The very first step related to Medicare as you turn 65 is to answer this one question: "Do I NEED or WANT to enroll into the Medicare health insurance system?".  Understand that, very simply, as you turn 65 years old in the US, most people will become eligible to enroll into the Medicare health insurance system. We'll limit this conversation to those that are, indeed, eligible. (citizenship issues, lack of work credits, and other items will be excluded here as most people are eligible at age 65).

Find yourself in one of these situations below. Nothing fits for you? Oh boy, call us.

How do you receive your health insurance currently? (prior to age 65)

Certain situations will lead us to answer "yes, you need Medicare next" or "no, you are fine to enroll later". Let's tackle some of the common situations:

Currently enrolled through the ACA (Affordable Care Act)/Obamacare/Marketplace

We consider each of those rather one and the same. If you are enrolled in this fashion of health insurance, whether you receive subsidies for such insurance or not, you need to enroll into Medicare at age 65. Enroll in the initial election window which is three months prior to your birth month, includes your birth month and extends to the three months after your birth month. Advice? If this is you - enroll when your window of enrollment opens. You need to enroll, give the government processing time since you do need to enroll into Medicare.

Solution? You need to enroll into Medicare A/B and contact us for further products.

Drawing your Social Security benefits now, prior to your turning 65 years old?

If you ARE, then you will be automatically enrolled into both parts of Medicare - Part A and Part B. This next part is a big deal ---- just because you are automatically enrolled into Part B, this does NOT mean that you must keep it. If you have health insurance elsewhere that will qualify as a reason NOT to enroll into Part B, you may say "no thank you" to the government for Part B coverage. The government will not MAKE YOU take their insurance and pay the monthly bill for it. Call us to figure out if you are able to say "no thanks" to Medicare Part B.

Solution? You need to remain enrolled into Part A of Medicare. If you contribute to a Health Savings Account, you must cease those contributions beginning on the first month of your Medicare enrollment. If you are covered for your health insurance through your (or your spouse's employer and the employer has over 20 employees) you may defer your enrollment into Part B. Follow the instructions that arrive with your card to "give Part B back". You will later go back to the government to enroll when you need the coverage. This typically will happen upon your (or your spouses) retirement.

Currently working for a small employer or my spouse is the employee

This is defined as an employer with less than 20 (twenty) employees. This is number of employees, not the number of people possibly enrolled in their group insurance plan if one is provided. Medicare's secondary payor rules will apply if you do work for an employer with under the 20 employee threshold. See the top area of page 4 in this guide from CMS. In this situation, you will need to enroll into both Parts A and B of Medicare. You may remain on your group health insurance as well or purchase a Medicare product through us.

Currently working for a large employer or my spouse's employer

This is defined as an employer with over 20 (twenty) employees. Many people make the mistake of thinking that because they are enrolled in an employer's group health insurance plan (through their own employment or through their spouse's employment) that they must remain enrolled into the group insurance even though they are or will be eligible for Medicare at age 65.  Typically, the person eligible for coverage will enroll into Part A and B "for no real reason; I thought I had to"

Solution? First, follow our cost calculator worksheet HERE to see what your current costs and coverages are with your employer plan and compare to that to Medicare's cost and coverage for you. It's all about cost and coverage. Make an educated decision and know why, or why not, you are enrolling into the Medicare system. Also note that there can be other reasons that people voluntarily leave group insurance plans. Some are struggling with an illness and their current health plan's network isn't sufficient for their needs. Perhaps the maximum out of pocket is high and the person is using experience high usage of their health plan and incurring high costs. Sometimes, a person would like to control their own health insurance so that they can retire on a whim should they choose. Bottom line is that there are a number of reason that people could have to choose not to be enrolled in the employer health insurance plan.

Currently retired but still enrolled in the former employer's plan   

This is frequent in Detroit's Big Three auto insurance companies, as a great example. If you are a salaried worker from Ford, for example, and decide to retire at age 63, your health insurance will be provided by Ford until you turn 65 years old. At that point, you will dis-enrolled from their group insurance plan and you will join Medicare and purchase the appropriate product(s) to pair with Parts A and B. Commonly, Ford will provide you with a health reimbursement account with funds to assist in your purchases. People in this situation will then call us for help in setting up their Medicare plans as Medicare will be their "next step" at age 65.

You are currently on Social Security Disability AND on Medicare prior to age 65

This is an important one. Let's say that you were awarded Medicare at age 58, for example. Years have passed and now you are turning age 65 but you already have Medicare's Part A and B. Understand that this is your opportunity to gain your OPEN ENROLLMENT ability with Medicare and enroll into a Medicare supplement and not be penalized due to pre-existing conditions. This is a one-time window that will last for six months. It's extremely important to understand your rights here. READ OUR STUFF HERE.

You are currently under age 65, enrolled in Cobra coverage and am turning 65

If you left an employer and remained in their coverage via Cobra, all is well until you turn age 65. A couple of things can happen. (1) you may be no longer eligible for the Cobra any longer due to your Medicare eligibility or (2) you may remain on the Cobra coverage but you will need to enroll into Medicare Parts A and B. Due to Medicare's secondary payor rules, see here on page six, when you are age 65+ and enrolled via Cobra insurance coverage, Medicare is your primary payor. Therefore, you must enroll into Part A and Part B. You MAY, however, keep the Cobra coverage as your secondary coverage if you so choose. However, rarely does it make sense to do so. It's typically more expensive than Medicare products so please call us to talk through some better options.  See our video here about Medicare and Cobra coverage and how they don't play well together. Don't rely on your human resources department to provide good advice in this department.

Conclusion

What we're saying on this page is: As you approach age 65, don't just enroll into Medicare because someone told you that you had to. Don't enroll because you thought you just had to. Make a phone call to a good agency (we know one!) that can help you with your decision tree. We'll poke around and ask questions like those above.

The first step in the Medicare process is answering the basic question "Do I need or want to enroll into Medicare. Part A and/or Part B?"

Don't even attempt to think about Medicare products until you know you need Medicare! Makes sense, right?!