Happy senior working in a machine shop
July 24, 2020
Written By:
Brian Goldman
Retirement Specialist, Financial Adviser

I’m turning 65 and covered by health insurance through work. Do I need to take Medicare?

The answer will depend on a number of facts that describe you and how you get your health insurance.  

Retiree Health Insurance

If you are retired and have retiree health insurance, then the answer is yes, you should take Medicare Parts A and B. Your retiree health insurance may end once you become eligible for Medicare. If it continues, it will serve as a supplement to Medicare. Medicare will pay medical bills first, then your retiree health insurance may pick up part of what Medicare does not pay. You also need to check with your former employer whether you have to enroll in a special type of Medicare health plan for your retiree health insurance to continue.  And you also want to check the prescription drug coverage you have through your retiree health plan. If it is considered as good as Medicare’s drug coverage, then you will not need to enroll in a separate Medicare drug plan. You will need a Medicare drug plan, however, if the coverage is not as good as Medicare’s coverage. BUT in all situations, you may want to check the cost of your retiree health insurance and what it covers. You may be able to get better coverage at a lower cost with a Medicare supplemental plan and a Medicare prescription drug plan, or with a Medicare health plan.

Coverage Through Work (Or Spouse's)

The answer changes if you have health insurance through your or your spouse’s job and you (or your spouse if they have the insurance coverage) are still working. If there are fewer than 20 workers in the company, then you will need to enroll in both Medicare Parts A and B. Your employer coverage may even end when you turn age 65 and become eligible for Medicare. Medicare will be your main health insurance and will pay the bills first. You probably will no longer need to take the health insurance offered by your employer because it will only pay as a supplement to your Medicare. Before Medicare coverage begins you will need to explore all of your Medicare options, either a Medicare supplemental plan to fill in the gaps for Medicare and a Medicare drug plan, or a Medicare health plan.

If your company has more than 20 workers, then the answer changes again. If you are covered by health insurance from a company that has more than 20 workers, you do not need to take Medicare when you turn age 65. Your employer insurance will continue to pay your bills. You may want to enroll in Medicare Part A only since you won’t have to pay a premium for this coverage. Medicare Part A will act as a supplement to your employer coverage if you need hospital care. You will not need to enroll in Medicare Part B when you turn age 65 since your employer coverage will continue to pay for the doctor visits that Medicare would coverage. HOWEVER, you will need to take Medicare Part B within 8 months after you retire to make sure you do not pay a higher premium. Once again, you may want to review all of your health care options. The cost of your health care may decrease and more services may be paid for if you drop the employer coverage and enroll in Medicare Parts A and B.

We’re happy to help you analyze your health care costs and health care needs before you make an important decision about how you receive your health coverage.

Brian Goldman
Retirement Specialist, Financial Adviser