Turning 65 Means More Choices for Boomers Comparing Medicare, Employer Healthcare Plans

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Factors such as family status and veterans benefits are key to choosing healthcare coverage

Your healthcare needs are unique to you, so it can be important to have help in determining which plan best meets your needs.

Reaching 65 is an important turning point for many baby boomers—whether they are retiring from work or not. If they remain employed, however, boomers have the added complexity of factoring Medicare into their employer-provided healthcare decisions, according to Allsup, a nationwide provider of Medicare plan selection services and Social Security disability representation.

In the past 10 years, the number of people working past age 65 has climbed 52 percent, according to U.S. Bureau of Labor Statistics data. More companies also are taking steps to coordinate their healthcare coverage options for employees who are eligible for Medicare.

“One of your first steps is learning what your employer will provide you once you reach 65,” said Adrienne Muralidharan, senior product specialist for the Allsup Medicare Advisor®. The Allsup Medicare Advisor is an impartial Medicare plan selection service that helps people understand and choose the most affordable and appropriate Medicare coverage for their healthcare needs. (Allsup is not a Medicare plan provider and does not accept commissions from insurance providers.)

The number of large companies offering retiree health benefits has declined from 40 percent in 1995 to 28 percent in 2010, according to the Kaiser Family Foundation. For some, employer coverage is the primary payer of benefits, with Medicare paying costs not covered by the employer plan. For other employees, the reverse is true.

“It can be confusing to determine how your employer coverage coordinates with Medicare,” Muralidharan said. “When you add in decisions about spouse and dependent benefits, it can become even more complicated.”

Below, Allsup reviews key questions people turning 65 should consider when deciding their healthcare coverage needs.

  •     Do you still work and have healthcare coverage through your existing employer?

If you continue to work, you may be able to keep your employer’s existing group health plan (GHP). Confirm that your employer will continue covering you. In some instances, GHPs can choose to drop or reduce coverage for Medicare-eligible employees. In these cases, the employer may offer “wrap-around” or supplemental coverage, and the individual must enroll in Medicare for primary coverage.

If your company has more than 20 employees, the GHP is the primary payer in most instances and Medicare acts as the secondary payer. Traditional Medicare has two parts, Part A is hospital coverage and Part B is medical services. Generally, everyone should take Part A when they become eligible since it is free. You have the option of enrolling and paying the monthly premiums for Part B coverage. If you don’t enroll in Medicare Part B, you need to get a deferral from Medicare so that you are not subject to penalties when you enroll in the future.

If your employer has fewer than 20 employees, Medicare becomes the primary payer and your employer’s plan is the secondary payer. In this instance, it’s essential to enroll in Medicare Parts A and B. If you don’t enroll, then generally, you will have to pay from your own pocket anything that Medicare would have covered. “Make sure you get in writing details about your employer-provided coverage,” Muralidharan advises. “This will help you to decide how to handle your Medicare choices.”

  •     Does your spouse work and have employer-provided healthcare coverage?

You may be able to move to your spouse’s healthcare plan if it would provide you with equal or better coverage than Medicare. Again, determine how the plan would coordinate with Medicare (for example, as primary or secondary payer).

  •     Are you retired and do you have retiree health benefits through your former employer?

If you have coverage as good or better than Medicare under your retiree benefits and your retiree healthcare plan allows, you may be able to defer Medicare Part B. However, some retiree plans stipulate that Medicare is the primary payer and the retiree plan is the secondary payer. Therefore, you need to understand how much coverage is provided under your retiree health plan to determine if you need additional Medicare coverage.

  •     Are you eligible for veteran healthcare benefits?

Veteran healthcare benefits, in general, are covered when provided at U.S. Department of Veteran Affairs (VA) facilities or for services authorized by the VA. Depending upon the level of VA benefits you receive, you may be adequately covered and don’t need Medicare coverage. But, some people find that Medicare offers more flexibility and choose to use a Medicare plan as well. VA benefits and Medicare do not coordinate.

  •     Do other family members rely on your healthcare plan for coverage?

If you are turning 65 and your spouse or your children are covered under your employer’s healthcare plan, you need to consider how their coverage may change if you choose to switch to Medicare. For example, will they be eligible for COBRA or need to secure private coverage? This is becoming increasingly important as children up to age 26 can now remain on their parent’s healthcare plan. “Before changing any coverage for yourself, you want to make sure you have secured coverage for anyone else included on your policy,” Muralidharan said.

Choosing Medicare Coverage

Whether seeking a deferral or enrolling in Medicare, it is important to understand options provided under the federal healthcare program. This includes the alphabet of Medicare programs: Part A-hospital, Part B-medical, Part C-Medicare Advantage and Part D-prescription drug, and Medigap. In most instances, regardless of the path you take, it’s generally a good idea to enroll in Part A, as it’s available at no cost. Enrollment in the other parts depends on several factors, including those outlined above. Consumers also need to evaluate the options under each type. For example, most people can choose from dozens of Medicare Part D, Medicare Advantage and Medigap plans.

“Your healthcare needs are unique to you, so it can be important to have help in determining which plan best meets your needs,” Muralidharan said. “It’s not surprising many people find this is a confusing process, especially if you are trying to coordinate Medicare with your other options.”

To help people who are new to Medicare, Allsup has released a free guide, “Medicare and Reaching Retirement Age.” It is available by phone: (866) 521-7655, or email: MedicareHelp(at)allsupinc(dot)com.

For an evaluation of your Medicare options, please call an Allsup Medicare Advisor specialist at (866) 521-7655 or go to http://medicare.allsup.com.

About Allsup
Allsup is a nationwide provider of Social Security disability, Medicare and Medicare Secondary Payer compliance services for individuals, employers and insurance carriers. Founded in 1984, Allsup employs more than 700 professionals who deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. The company is based in Belleville, Ill., near St. Louis. For more information, visit http://www.Allsup.com.

The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.

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Mary Jung
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