Working longer is becoming a reality as inflation and a volatile stock market continues draining older workers’ nest eggs. A recent survey revealed that nearly one-third of people approaching retirement age (62-64) don’t know they can sign up for Medicare, which is often cheaper, even if they are still working.
Individuals need to understand their options as retirement is likely to further away. Employers can ensure their employees can access expert insurance advice to help them make the right decisions.
These are common questions regarding retirement postponement and Medicare Coverage.
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When is the Best Time to Retire? Why is the Average Retirement Age Increasing?
Your retirement decision is completely personal and will depend on your situation. The majority of employees expect to retire at age 71. Many employees in their 60s are deciding they will continue working longer. Although some people are positive about working beyond 65, half of those who continue to work do so primarily to keep their health insurance. The average age that people retire is rising is due to the availability of health insurance. A survey of over 1,000 older Americans found that 31% said health care was their main reason for working. 53% stated it is one factor.
You can make the transition from employer-sponsored insurance easier by having a plan for how you will handle your Medicare decisions.
Do I need to sign up for Medicare?
Most seniors who are working know that the answer is no. Although enrolling in Medicare can be a viable option for their company’s coverage for seniors, they don’t need to do so as soon as they turn 65.
There are exceptions, however, that makes it mandatory. This will ensure you have no gaps in your coverage. Medicare will be the primary payer in companies with less than 20 employees. This means that seniors need to sign up as soon as possible. You could end up paying for it if you delay signing up. If your company determines you are eligible for Medicare, your group plan may deny you benefits and foot the bill. Late enrollment can result in financial penalties. You must be ready to leap into Medicare coverage if you work for small companies.
Is Medicare More Expensive Than My Employer-Sponsored Insurance?
Those approaching retirement and those already retired say they are satisfied with their employer’s health benefits packages. Workers are discouraged from looking for better plans because of their fears and misinformation about Medicare.
The survey found that a third of eligible employees aged 65 or older have not enrolled in Medicare. This is because they don’t believe their coverage will be as good and comprehensive as their employer’s insurance. Our research found that 88% reported having comprehensive coverage. Additionally, Medicare options may offer better coverage for many employees than an employer plan and could be cheaper.
Original Medicare may not provide the same level of coverage as your employer-sponsored plan. Most people who sign-up for Medicare don’t sign up for Original Medicare. It is strongly recommended that you pair your Original Medicare plan with a prescription drug and Medigap plan. Each Medigap (plans A through N) has a different level of coverage. This requires careful consideration when deciding which plan is best for you.
A Medicare Advantage plan is another option. It can be cheaper than Original Medicare and Medigap, and some plans have no monthly premium. Employer coverage, however, can be subject to unexpected changes in cost from year to year. Employers often work with insurance companies to adjust their offering to put more out-of-pocket costs on employees, such as higher copays and deductibles. Original Medicare plus a Medigap program or a Medicare Advantage plan may offer better coverage if your employer-sponsored plan has increased in cost.
What Should I Choose for My Health Care Coverage?
The premium cost is often the most important consideration when shopping for health insurance. However, there are many options for health insurance, including co-pays, deductibles, and coinsurance. Some people may be more concerned with total out-of-pocket costs. Our research revealed that people under 65 prioritize the financial aspects of their healthcare, while those over 65 places more importance on quality and scope of care.
Your changing health needs and financial goals should be reflected in your annual health insurance review. You can reduce costs by reducing your annual deductible and paying co-pays at the time of service. You may have to prioritize coverage and access if you regularly need certain prescriptions or services.
What Is the Best Time for Medicare Shopping?
Side-by-side comparisons are a great way to determine the coverage you have for all Medicare Advantage, and Medicare supplement plans once you become eligible. Because coverage terms can change, and care options may vary from year to year, it is a good idea to shop for plans during Medicare Annual Entry Period Oct. 15-Dec. 7.
Comparing premiums, deductibles and co-insurance can help you to save money and find a plan that suits your financial goals and changing needs.
