Should you still be applying for Medicare as soon as you are eligible, or is it better to continue forward with employer health coverage?
The main thing to do is get ahold of your employer coverage agreement and really understand what coverage you are receiving – and what premiums and costs you are paying for it. Provided you have the eligible work history behind you, we tend to recommend that consumers apply for Medicare even if they are still receiving employer coverage – primarily because Part A will be free from premiums if all the eligibility boxes are ticked, and so in essence, you have nothing to lose by signing up.
If you choose to bypass Part B during the initial enrollment period, be aware that penalty premiums can come back to bite you if you sign up at a later date – unless you can get an application in during the Special Enrollment Period, which lasts for an extended time after your employer coverage ends.
Which Coverage Is Better - Medicare or Employer?
This will depend largely on your employer, with the following providing a good breakdown of areas you need to explore and find out more about to make a well-informed decision.
- Understand the premiums you are paying on your employer coverage, as well as additional expenses such as deductible, coinsurance, and Maximum-Out-Of-Pocket.
- Find out how much you can expect to pay for Medicare Part B and Part D – which are both determined by income.
- Find out if your employer coverage is creditable. If it isn’t, you may find that once you retire and turn to Medicare as your full-time coverage provider, you are faced with a fee for the rest of your life.
- Understand where your home State stands with regards to leaving employer coverage voluntarily – and whether you will have a chance to enroll in Medicare coverage as part of a special enrollment period or not.
- Get to know the drug and prescription medication coverage you get from your employer health coverage. You may find that your employer coverage is much more effective against drug costs than a Medicare plan would be, and that is one of the reasons why so many citizens choose to remain in work and under the coverage of their employer for as long as possible.
Understanding Which Is Right for You
It all comes down to which coverage is serving you in the best way possible. As a standard piece of advice, we always recommend that, where possible, individuals sign up for and enroll in Part A as soon as they are eligible. A long as you meet the requirements, it will come at no extra cost and you will be automatically enrolled. However, it is important to know your employer’s health coverage and understand what is involved.