We talk a lot about “transitioning” to the Medicare health insurance system. We once in a while will have someone asks “what does that really mean and what do you really do?”
Here’s a perfect example for you. I’ll tell you about John and Linda, who I spoke with yesterday.
Linda is working for a large employer in Michigan and has her health insurance through that employer. She’s a few years away from retirement. John is turning 65 in July. John’s health insurance coverage is through Linda’s workplace. So, the first question they had was “Does John really need to sign up for Medicare like everyone tells him?”
How’s that for an answer. Medicare is full of “maybes” at times.
First question: How much are you paying, Linda, from your paycheck each month for each of you to have your coverage with your employer?” Answer: “Around $800 per month”
I asked Linda to get out some paper and start her list. She was already prepped with the notepad so I said “find out from your employer, how much it will cost each month for only YOU to be on the employer insurance vs having both of you on the plan”. Some employers will contribute a higher amount for the employee and charge the employee a much higher rate for the spouse OR they may not. So, there’s a place to start. If they learn that it would save $500 per month of that $800 that they currently pay, I’m going to then say “let’s look towards moving John to Medicare….”. If she says they’ll save $100 per month? I’ll suggest that John stay with her group plan until she’s ready to retire.
As we loop back to that “transition word”…. John may transition at age 65, he may not. Because he’s turning 65, we tell him that he now has Medicare’s health insurance program to look to as an option for coverage. Does he have to take it? No. He doesn’t because he has Linda’s insurance. But you can see that it requires some digging into to determine what is best to do.
Key questions to ask yourself:
- How much are you paying each month for the employer health insurance?
- Are you contributing to an HSA? If yes, don’t sign up for Medicare if you want to continue contributing.
- How is your health? Are you dealing with a medical condition requiring you to see doctors a lot and enduring procedures where you are incurring co-pay and deductible costs each month in addition to the premium you are paying for the workplace coverage? If these rack up, Medicare might be a better option. If you see a doctor 2x a year? You’re likely better off with the employer coverage.
- Is your employer one that has over 20 employees? If it is UNDER 20 employees, Medicare is mandatory to enroll into. Call us and we’ll tell you more.
- Determine how much premium you will pay to Medicare itself. Medicare rates are based on your modified adjusted gross income. Watch our video here to determine what you’ll pay. People often miss this step. Or, they hear from others that Medicare is extremely costly (and it can be to a high income earner) and they dismiss looking further into Medicare as an option because they assume it’s too costly….
- How much will it cost you to add a Medigap policy (a Medicare supplement) or to add a Medicare Advantage plan. These can vary incredibly. It could be $120 each month for a United Healthcare medigap plan. Or it could be a zero cost each month for a Priority Health plan in Michigan. You need to determine which path to Medicare coverage is best for you. We help people choose this part, along with handling the enrollment process for you to make things work smoothly.
The above type of conversation is part of the “transitioning to Medicare” service that we offer. Medicare, as a topic, is truly more of a process than just a product.
When someone calls us and says “I’m turning 65 next month, do I have to sign up for Medicare?” you can see why we suggest that you just curl up with a 30 minute phone call to us to work out your answer with us.
John and Linda above. He might need us now if he chooses the Medicare path. Or, he’ll need us later when he needs Medicare.
After Linda gets some answers to our questions, we’ll all know what to do for John.
Joanne Giardini-Russell is a Medicare Nerd & the owner of Giardini Medicare, helping people throughout Metro Detroit and the country transition to Medicare successfully. Contact Joanne at email@example.com or by calling 248-871-7756.