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Yes You Can Sign Up for Medicare While You re Still Working

And your wallet might thank you - for many, Medicare is a better deal than their company's health insurance. (opens in new tab) (opens in new tab) (opens in new tab) Newsletter sign up Newsletter (Image credit: Getty Images) By Bethany Cissell last updated 11 October 2022 As inflation and a rocky stock market continue to eat away at the nest eggs of older workers approaching retirement, working longer than expected is increasingly on the table. But a recent Allsup survey (opens in new tab) found that fully one-third of those nearing retirement age (62-64) who plan to keep working past 65 don't understand they can sign up for what is often more affordable Medicare coverage, even while they're still employed.

A Medicare Surcharge That Might Surprise You If You're Not Careful – IRMAA With retirement perhaps further away for many, individuals need help understanding their options. Plus, employers can ensure their workforce has access to expert health insurance assistance to make the best decisions for their own situations. Here are some answers to common questions surrounding retirement postponement and Medicare coverage, including common misperceptions:

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When should I plan to retire And why is the average retirement age rising

Your retirement decision is entirely personal and dependent on your circumstances. Most employees now expect to retire around age 71. Employees in their 60s have been making the decision to work longer. While some are relatively positive about working past 65, about half of those individuals have continued working primarily to maintain their health insurance. Access to health coverage is one of the main reasons the average age at which people retire is increasing. In a survey of more than 1,000 American older workers, 31% of those with employer insurance say health care is their primary reason for working, and 53% say it's one factor. Whether you are continuing to work based on career fulfillment or health coverage, having a plan in place for how you'll handle your Medicare decisions before you turn 65 can streamline the transition off of your employer-sponsored health insurance.

Do I have to sign up for Medicare

For most working seniors, the answer is no. While enrolling in Medicare is often a viable alternative to their company's coverage, it's not required that all seniors make the jump as soon as they turn 65.

Medicare Costs to Go Down in 2023 However, there are some cases where it is mandatory and it's important to be aware of these exceptions to ensure there are no gaps in your coverage. For instance, in companies with fewer than 20 employees, Medicare is the primary payer, meaning that seniors must sign up as soon as they are eligible. If you delay your signup, you might end up paying for it: Your company's group plan can deny your claims if they find you are eligible for Medicare - footing you with the bill. On top of that, there are financial penalties for late enrollment, so if you work for a small company, it's essential you are ready to make the leap to Medicare coverage, regardless of your retirement plans.

Is Medicare better than my employer-sponsored coverage

Employees who are approaching retirement, and those who have reached retirement age, say they are mostly content with their employer health benefit packages. However, hesitation and misconceptions about Medicare prevents workers from shopping for potentially better plans. At Allsup, we found that one-third of employees 65 and older who are eligible have not enrolled in Medicare because they don't think coverage will be as good as their employer's insurance. However, our same research also found that 88% of those who are enrolled in a Medicare plan report having comprehensive coverage. On top of that, Medicare options could actually provide better coverage for many employees - and at a lower cost than an employer plan.

Watch Out: RMDs Can Trigger Massive Medicare Means Testing Surcharges If Original Medicare is unaccompanied by a prescription drug plan (Part D) or a Medigap supplement, it may not live up to your current employer-sponsored level coverage. But most individuals who sign up for Medicare (opens in new tab) do not sign up for Original Medicare by itself. It is highly recommended to pair your Original Medicare plan with a prescription drug plan and a Medigap plan. Each Medigap plan (plans A to N) offers a different level of coverage that demands careful consideration in terms of weighing which plan best fits your needs. Another option, aside from Original Medicare plus a Medigap plan, would be to elect a Medicare Advantage plan (Part C).The good news is Medicare Advantage plans tend to be inexpensive, with some having no monthly premium. In comparison, employer coverage can be susceptible to sudden changes in costs from year-to-year. As inflation climbs, employers often negotiate with health insurance carriers to reposition their offerings to place more out-of-pocket costs on the employee, such as higher deductibles and copays. If you find your employer-sponsored plan is increasing in price, Original Medicare plus a Medigap plan, or a Medicare Advantage plan, may be the better primary coverage for you.

What should I prioritize in my health care coverage

Premium cost is usually king when shopping for health insurance plans. But the variety of health insurance provisions, such as deductibles, co-pays and coinsurance – can lead some people to focus on total out-of-pocket costs. Our research found that those who are under 65 prioritize the financial aspects of their health care, but those who are over 65 tend to prioritize scope and quality of care in their decisions. You should recalibrate your health insurance plan annually, depending on your evolving health care needs and financial goals. If you need to cut costs, factors such as annual deductible costs and co-pays due at the time of service will take precedence. However, if you have certain prescriptions or medical services you seek on a regular basis, such as prolonged therapy, you may need to prioritize access and scope of coverage.

When is the best time to shop for Medicare

When you become eligible for Medicare, conducting side-by-side comparisons can help you identify the coverage for services across all types of Medicare and Medicare Advantage plans. It is always ideal to shop for plans during the Medicare Annual Enrollment Period, Oct. 15-Dec. 7, because coverage terms may change and care options may fluctuate with trends and networks from year-to-year.

7 Things You Can Do Now to Prepare for Medicare's Annual Enrollment Period Making a close comparison of premiums, deductibles, co-insurance, access to providers and benefits can help you save money and choose a plan that is more personalized to your changing health needs and financial goals. Bethany Cissell is a health care insurance services specialist at Allsup. This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC (opens in new tab) or with FINRA (opens in new tab). Explore More Building Wealth Bethany CissellAccount Manager and Health Care Benefits Expert, AllsupBethany Cissell, a health care benefits expert, has been with Allsup (opens in new tab) for about 10 years and has experience in federal disability and health insurance programs, such as Social Security Disability Insurance (SSDI) and Medicare. This includes knowledge of Medicare plan selection and Medicare benefits coordination with private health insurance plans. She serves as Health Care Insurance Services Account Manager and oversees the operations team assisting Allsup customers, including employees, former employees and retirees. She is regularly involved in the successful implementation and delivery of services to more than 250 organizations nationwide, including a large selection of Fortune 1000 employers. Latest 4 Ways You Can Take Advantage of a Down Market With markets down for the year, it may seem that all the news is bad. But now could be a good time to make some profitable moves. By Adam Grealish • Published 11 November 22 New, Used or Leased: Is Now the Time to Buy an Electric Vehicle? The Inflation Reduction Act created new tax breaks for electric vehicles. Here's a guide to which EVs count and the best time to buy. By Rivan V. Stinson • Published 11 November 22 You might also like 4 Ways You Can Take Advantage of a Down Market With markets down for the year, it may seem that all the news is bad. But now could be a good time to make some profitable moves. By Adam Grealish • Published 11 November 22 Finding Peace of Mind With Your Retirement Income Even in tough times, you can secure retirement income that lets you maintain your lifestyle, lasts a lifetime, adjusts for life events and leaves a legacy for the kids. By Jerry Golden, Investment Adviser Representative • Published 10 November 22 What to Do When an Unhappy Customer Threatens to Ruin Your Rep Some customers go too far when they feel they haven't been treated well, demanding unreasonable make-goods and even resorting to extortion. An attorney offers some advice. By H. Dennis Beaver, Esq. • Published 10 November 22 Rising Interest Rates Change the Math on Pensions for Some Would-Be Retirees Now is a good time to think about when and if to take a lump sum on your pension and what to do with it. Let's explore the pros and cons. By Michael Aloi, CFP® • Published 9 November 22 Counterattack: Tips for Thwarting a Will Contest From contentious relatives to scam artists, wills are not immune to the threat of a contest. If you have an inkling such a fight could be in your estate's future, here are some ways to limit the risk. By Linda Kotis, Esq. • Last updated 10 November 22 5 Steps to a Stronger Financial Plan It's impossible to be right all the time, but a strong plan and constantly assessing where you are can help you pivot when bad things inevitably happen. By Eric Roberge, Certified Financial Planner (CFP) and Investment Adviser • Published 8 November 22 Safe Harbor 401(k)s Can Help Small-Business Owners Keep Happy Employees Immediate vesting and contributions by the employer regardless of the employee's participation pump up workers. Employers get lower costs and tax benefits. By Mike Piershale, ChFC • Published 8 November 22 5 Survival Tips for the Bear Market It's been a painful year for investors, but focusing on the long term and implementing constructive actions can help weather the turbulence. By Daniel Kern, CFA®, CFP® • Last updated 8 November 22 View More ▸ kiplinger About Us (opens in new tab) Terms and Conditions (opens in new tab) Privacy Policy (opens in new tab) Cookie Policy (opens in new tab) Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site.
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