You need to be 65 if you want to avail Medicare. However, Medicare might not be your priority if you are on the verge of attaining the age of 65 and receiving medical coverage with the health insurance provided by your employer. Not everyone needs Medicare.
But there are many who need to enroll themselves to avoid shelling out penalties for late enrolment. You might have to continue paying the penalties for a long time. If you assume that you don’t require to sign up for Medicare, it can be a grave mistake. So, should you get Medicare or not? Here is what you must know.
How Many are 65 and Still Working?
If the recent reports are to go by, something in the ballpark of 45 million workers belongs to the age group of 65 and older. According to the Bureau of Labor Statistics, around 17.9% of the total number of people from that age group. The share has been rising over the past few years. This is despite the economic crisis from the COVID-19 pandemic forcing people to retire. Aside from that, many have lost their jobs due to the crisis.
In January 2020, when the pandemic didn’t yet start wreaking havoc, 19.7% of the people from the age group of 65 and older were found to be working. A lot of people aged more than 65 lost their jobs when the pandemic unleashed its devastation. Post that, many opted for Medicare for primary health coverage. That pace has decelerated quite a bit. Unless there is an exception like being covered by an employer-provided health plan, you have seven months in your hand – three months before you turn 65, the month you turn 65, and three months after you turn 65, to enroll for Medicare.
Medicare is usually of two types – Part A, i.e., hospital coverage, and Part B, i.e., outpatient care services. You needn’t worry about premiums in the case of Part A if you have a minimum work history of 10 years throughout which you have made contributions to the plan through payroll taxes or self-employment taxes.
There is a monthly premium that you have to pay for Part B. For 2021, the standard amount is $148.50. However, beneficiaries who earn more pay more. 43% of those who sign up for Medicare prefer to have their Medicare Part A and Medicare Part B benefits catered to them through Part C or the Advantage Plan. The Part C plan also comprises Part D, which deals with prescription drugs. There might be or might not be a premium associated with that.
The remaining 57% choose basic Medicare and might attach the Part D plan and the Medigap Policy. People with higher earnings shell out more in case of drug coverage. The penalties you incur for late enrolment can be lifelong. For Medicare Part B, the fine is 10% each year. For the Part D plan, you will have to shell out a penalty that amounts to 1% of the base premium, which, in 2021, amounts to $33.06.
Working for a Big Business
If you work for an organization with over 20 employees, you can postpone your Medicare enrolment until you take retirement. Most individuals with group health insurance tend to enroll for Part A (as it’s free) but postpone signing up for Medicare Part B.
If you pair it with your health savings account with a high-deductible health insurance policy through your employer, you won’t be able to contribute to your plan. This is after signing up for Medicare, even if your enrollment is for Part A. If you decide to stick to your current coverage and delay signing up for any Medicare plan, ensure that the plan has coverage making you eligible for Medicare Part B and Medicare Part D.
Working for a Small Business
If you are receiving health coverage through a company with an employee strength below 20, signing up for Medicare by the age of 65 is a good idea. This is irrespective of whether you stick to the employer plan.
However, deciding to opt out of employer coverage and choose Medigap and Medicare Part C or Part D plans might prove to be cost-effective. Individuals working for small businesses happen to shell out higher premiums than those who work for big businesses.
The Medicare enrollment rules would change based on the organization size if you already have insurance coverage from your workplace. If you miss the enrolment window, you might have to face penalties for delaying.