Comparing Employer Coverage to Medicare: What’s the Better Option?

Whether you’re planning for retirement or confidently continuing to work past age 65, Medicare is a health coverage option for you. People often call our advisors to ask, “What’s better, my employer group coverage or a Medicare plan?”

There’s no right or wrong answer—the best plan is the one that works for your needs, budget, and lifestyle. Our advisors are here to research and compare all your plan options so that you can find the right fit. As you compare employer coverage to Medicare, here are a few factors to keep in mind.

Retirement Isn’t a Requirement for Medicare

Many people think that Medicare is only for retirees, but this isn’t true! You can enroll in Medicare while continuing your career. Your working status does not impact your eligibility for Medicare.

If you sign up for Medicare while you’re still working, it may make your eventual retirement that much smoother because you won’t have to change your health insurance when the time comes.

Medicare Offers More Options Than Employer Coverage

When you enrolled in your health care coverage through your employer, you likely chose from less than a handful of available plans. By comparison, Medicare has over 200 plans in Ohio alone. For some individuals, this can make the transition from employer coverage to Medicare feel overwhelming.

But Medicare’s multitude of options can work in your favor, despite how mind-boggling it may seem to choose one plan out of hundreds. With more selection, enrolling in Medicare gives you an opportunity to find a health care plan better tailored to your specific needs. Switching from employer coverage allows you to shed the one-size-fits-all insurance model.

Many Medicare plans are offered by the same carriers that provide employer coverage, as well. If you enjoy the customer service you get from your current insurance carrier, you may be able to continue with them on Medicare.

Your Costs Will Change

Switching your health coverage means that some of your costs will change. This is unique for every plan, but generally speaking, Medicare tends to provide more benefits than employer coverage at a lower cost.

If you have a high-premium or high-deductible plan through your employer (or your spouse’s employer), switching to Medicare may be more cost-effective. Many Medicare plans offer first dollar coverage, meaning you can pay little or nothing out of pocket for health care visits. Depending on the plan, Medicare offers $0 premiums and low to $0 deductibles.

Keep in mind that some parts of Medicare (Part B and Part D premiums) can be adjusted based on income, but this only applies to a small handful of individuals. Additionally, you cannot add dependents to Medicare coverage. You may need to make accommodations for your spouse’s insurance. Our local advisors in Medicare will consider all these factors as we assess the right plan for your needs.

Some Benefits May Carry Over

To smoothen the transition from employer coverage to Medicare, some benefits of your current plan may remain after you switch. One example is your health savings account (HSA). When you sign up for Medicare, you can no longer contribute new funds to an HSA through your employer. However, you can use the HSA funds you already have to pay for certain Medicare costs.

Smaller Companies Require You to Enroll

If you work for an organization with fewer than 20 employees, you are required to enroll in Medicare once you’re eligible. Otherwise, you could face penalties later. These could stick with you, increasing your costs for life.

However, if you work for an organization with more than 20 employees, you have the option to defer (or delay) Medicare Part B and Part D. Our advisors can help you take the proper steps to do this. Reach out to us to avoid late enrollment penalties and to ensure your drug coverage is creditable to Medicare.

Get Local Answers to Health Insurance Questions

As you prepare to transition from employer coverage to Medicare, let RetireMEDiQ do the research for you. We can compare your employer plan to Medicare, making it easy to find the right coverage for your needs.

With advisors in Dayton and Cincinnati, we’re a nearby resource for local answers to health insurance questions. Schedule a call with us or call 1-844-388-6565 today!

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