Retiring at Age 66 or Still Working
Proper planning for your health care coverage in retirement is just as important as proper investment planning. While most people are eligible for Medicare at age 65, the “full retirement age” for Social Security retirement benefits for people born between 1943 and 1954 is 66. Whether you plan to work just until you’ve reached your full retirement age or into your 70s, be sure you understand how Medicare works, when you can enroll and what your health plan options are.
I’m over 65 and plan to continue working for a few more years. When do I switch from my employer medical plan to Medicare?
It depends. If you’re covered by a group health plan, Medicare may already be paying benefits under Part A. When you’re ready to retire and your group coverage will be ending, you’ll qualify for a Part B Special Enrollment Period and have an 8-month window to sign up for Part B medical insurance.
What do I need to know about Medicare enrollment since I just started COBRA coverage?
If you’re 65 or over and have COBRA coverage on an employer’s policy, you must sign up for Part B during the first eight months you have COBRA to avoid the Part B late-enrollment penalty in the General Election Period (January 1 – March 31 of each year). You will not get a Special Enrollment Period when your COBRA coverage ends.
Do I need to have Part B before I can join a Medicare Supplement (Medigap) or Medicare Advantage plan?
Yes. You need to have both Medicare Part A and Part B in order to enroll in either type of plan. On the flip side, if you are thinking of joining a Medicare Prescription Drug Plan (PDP), you only need to have Part A or Part B.
How do I choose between a Medicare Supplement and Medicare Advantage plan?
First you need to carefully examine all the benefits and details of both plan types, and select the type of plan that best meets your current financial and health care requirements. Both types of plans help fill in the gaps not covered by Original Medicare, but work differently. Medicare Advantage plans use provider networks and except for emergencies, you may be limited to the plan’s doctors and need referrals. With a Medigap plan, you can see any doctor and use any hospital that accepts Medicare. On the other hand, Medicare Advantage monthly plan premiums are typically much lower than Medigap premiums.
If I enroll in a Medicare Advantage HMO plan, can I join a different plan for drug coverage?
It depends on the type of Medicare Advantage plan, and whether the plan offers prescription drug benefits. Private Fee-for-Service (PFFS) plans typically do not include prescription options, so you can join a stand-alone drug plan if you enroll in a PFFS plan. HMOs and PPOs typically do include prescription options, and require you to get your Medicare prescription drug benefits through the plan.
What happens if I join a Medicare Advantage plan but decide a few months later that it’s not right for me? Can I drop it and if so, what are my options?
When you join a Medicare Advantage plan for the first time (such as when you first enroll in Medicare Part B), you have a lot more flexibility than you may later on. If after joining the plan you change your mind, you can drop it anytime within the first 12 months after enrolling and return to Original Medicare. At that time, you can add a Medicare Supplement (Medigap) policy and/or a stand-alone Medicare Prescription Drug Plan (PDP).
Are there limits to when I can switch Medicare health plans?
Yes. In general, you can make one “election” during the Annual Election Period between October 15 and December 7 of each year, for coverage effective on January 1 of the following year. This includes enrolling in a prescription drug plan, a Medicare Advantage plan or a Medicare Advantage plan with prescription drug benefits for the first time — or switching from one plan to another. There is also an Annual Disenrollment Period (January 1 – February 14 of each year). During that time, if you’re in a Medicare Advantage plan, you can leave your plan and switch to Original Medicare. If you switch to Original Medicare during this period, you will have until February 14 to also join a Medicare Prescription Drug Plan to add drug coverage.
For more about Medicare Enrollment Periods, call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048. Or visit www.medicare.gov.