- May 13, 2020
We've been in the business of helping people go on Medicare for a long time, and through the years, we’ve had people ask us thousands of Medicare-related questions. But do you know what the #1 most common question we’ve heard over the years is? It’s this: “Should I start Medicare A and B at age 65?”
Maybe you’ve had the same question. If so (and for the record, it’s a pretty important question you need to address), we’re going to answer it for you here. So let’s get into it.
Should You Start Medicare A & B at Age 65?
First, you need to know that the answer to this question is not a one-size-fits-all. Rather, it depends on your unique situation. So let’s find out a little bit more about you to determine if you should start Medicare A and B at age 65.
To do this, you’ll need to answer the following question:
Are you or your spouse still working?
If the answer is "no," meaning you no longer have a group plan available through you or your spouse’s active employer coverage, then you must enroll into Medicare. It is your only health insurance option.
If you're receiving Social Security, they will automatically enroll you into Medicare A and B. Your card will show up in the mail about 100 days prior to when your Medicare begins (which is on the first day of your birth month). However, if you’re not on Social Security, you'll have to initiate that enrollment by enrolling yourself in Medicare.
But let's say you answered “yes,” meaning you or your spouse are still working. If that’s where you are right now, then deciding if you should go on Medicare A and B when you turn 65 is a little more complicated. The main thing you'll need to do is compare your employer-provided plan to what your Medicare options are to figure out which one is better for you.
First, you’ll need to know what your premium is. In other words, what does it cost you out-of-pocket (or out of your check) to be covered by the work plan? Obviously, your employer is paying for some of it, but more than likely you’re covering some of it as well, probably through a payroll deduction process. So first, figure out what your monthly premium is.
Another thing you’ll want to consider with your work coverage monthly premium is how much extra you’re paying for your spouse’s coverage. Depending on how much extra you’re paying for your spouse, sometimes it’s smarter to continue with the employee-only coverage while switching your spouse to Medicare when they turn 65.
We actually had this happen recently. A husband and wife (both of them with medical issues) turned 65. The wife was still working, but she realized she was paying $450 extra for her husband to be on her work insurance. Since her husband is Medicare eligible, she made the wise decision to stay on with her employee-only coverage but switch her husband to Medicare A and B along with a supplemental plan.
A good rule of thumb to keep in mind when considering if you should go on Medicare based on your work plan’s premium payment is this: if you’re spending $250 or more a month on your premium, then it’s probably in your best interest to explore switching to Medicare while you’re working.
Next, you’ll need to consider what your deductible amount is. Some people’s deductibles are relatively low (in the $500 to $1,000 range), while others can be quite high (anywhere from 5 to 10k dollars). If your deductible is on the higher side, you may be better off switching to Medicare because you can get that deductible down to around $200 pretty easily.
Third, you need to figure out what your work plan’s maximum out-of-pocket amount for the year is. In other words, if you got a serious diagnosis (maybe cancer, a hip replacement, open-heart surgery, or something like that) what would be the most you would have to spend out of your own pocket for the year? Every plan varies on this -some are $2,000 others are $10,000 - so find out what your specific work plan’s policy on maximum out-of-pocket is. Then compare your work policy to Medicare coverage. Medicare Plans + a good Supplemental plan such as a Plan G can lower your Max-Out-Of-Pocket to only a couple hundred dollars.
Fourth, before you decide to start Medicare A and B when you turn 65, you’ll need to consider your spouse’s age, their work status, and your children’s age. If you have a younger spouse who is no longer working and is covered by your employer insurance, the second you get off that employer insurance and switch to Medicare, they are no longer covered (so please be careful). Second, if you have children below the age of 26, switching to Medicare could adversely affect them as well. Remember, children can be covered by their parent’s plan until they turn 26, but if you switch to Medicare, they will no longer be eligible for your insurance.
Fifth and finally, it’s important to determine what your work's prescription drug co-pay costs are (essentially, the amount you’re paying out of pocket for meds) versus what your co-pays on Medicare would be. If you’re on expensive medications it's sometimes better to stay with your work plan because the co-pay costs can be more expensive on Medicare. This isn’t true in every case, so do your research and find out what your co-pay costs are before you make the switch to Medicare.
So should you start Medicare A and B at 65? If you and your spouse are no longer working, then yes, you should get on Medicare A and B when you turn 65. However, if you or your spouse are still working, you’ll need to consider things like how much your monthly premium is, how much your deductible amount is versus what it would be on Medicare, what your work plan’s maximum out-of-pocket per year is, whether or not your spouse and children will be affected if you switch to Medicare, and whether your co-pay costs for medications will increase if you get on Medicare.
We understand that this can be an tough decision to make with so many factors to consider. If you would like any help working through this decision our Medicare School Guides would love to help (for free of course!). Click here to schedule an appointment or call us today at (800) 864-8890.
MedicareSchool.com started in 2009 to provide an unbiased and education-focused service to individuals approaching Medicare enrollment. Since then, MedicareSchool.com has helped over 100,000 people find and enroll in the best Medicare plans that fit their budget.