People are living longer. They are healthier. And they often work well past retirement age and well past when they are eligible for Medicare at age 65. As a senior, you may already have health insurance through your employer (or through your spouse’s employer) and might wonder whether you really need to or even should enroll in Medicare just yet. Well, it depends. Today, we’ll explain in general how Medicare works with other insurance.
First, if you are covered by your employer’s insurance (or your spouse’s employer’s insurance), you will want to consult with a benefits counselor to see if and how Medicare might impact that coverage.
However, you should probably go ahead and enroll in Medicare Part A (if you aren’t automatically enrolled), which is usually free and covers institutional care in hospitals, skilled nursing facilities, and certain home health care and hospice care services.
How Medicare Part B Works with Other Insurance
As for Medicare Part B, which has a monthly premium and covers general outpatient medical expenses like doctor visits, preventive care, and diagnostic tests, you are supposed to enroll during an eligibility period that begins 3 months before the month of your 65th birthday and continues the following 3 months. If you don’t enroll during that period, you might have to pay a 10% premium penalty for every year you don’t sign up.
Even if you’re working and have health insurance, you may still be required to sign up for Medicare Part B if your company has fewer than 20 employees. Medicare becomes your primary insurer and pays before your employer’s insurance. If you don’t have Medicare, your employer’s insurance may deny payment on services that would have been covered by Medicare.
On the other hand, if your company employs more than 20 people and has a group health insurance policy, you don’t need to sign up for Medicare Part B when you turn 65. If you do sign up for Medicare in this instance, your employee’s health plan would be the primary insurer, and while Medicare might make up some of the expenses not covered by the primary insurer, you will want to consider whether the additional premium is worth the additional benefits. Once you retire, you will have a special 8-month period to sign up for Part B, with no penalty.
About Medicare’s “Coordination of Benefits”
If you do end up with both employer-provided health insurance and Medicare, Medicare’s “coordination of benefits” rules decide who is the primary insurer and who is the secondary insurer.
- The primary insurer pays first, up to the limits of its coverage.
- The secondary insurer pays leftover costs, if any.
- Keep in mind the secondary insurer (which could be Medicare) may not pay all uncovered costs, and you may still have out-of-pocket expenses.
Even if you are not retired, you still can choose Medicare over your employee’s insurance (just keep in mind the enrollment period). If you have Medicare, you also have access to SGIC’s Medicare Supplement (Medigap) plans that work hand-in-hand with Medicare to help you cover some of your out-of-pocket costs for Medicare-approved services. Contact our Medicare Supplement Insurance Customer Service Center at (833) 552-0828 to get more information about how SGIC can help you find the best Medicare Supplement plan for you.