Employer Health Insurance v. Medicare
Increasingly more Americans find themselves still in the workforce after that magic birthdate of Medicare eligibility. Whether employer health insurance or Medicare is better for an individual depends on their individual circumstances and needs.
So, should you jump off your employer sponsored insurance (ESI) for a Medicare plan or are you better off staying put as long as you're employed & eligible? Where do you go for help?
First, get on the phone with your employer plan administrator or HR department well in advance of your Medicare eligibility date so you have ample time to decide. Based on federal rules, like the size of employer, they'll be able to give you some very baseline information. Sadly, many HR professionals will shy away from having this discussion the probably advise you to go to medicare.gov or aarp.org for information. Not very helpful. See, there are significant rules to employers suggesting or encouraging their employees to move over to Medicare once eligible. Your HR professional is just trying to play by the rules!
Regardless, here are some key differences between the two options that you should know about:
Eligibility: Employer health insurance is generally only available to those who are employed, whereas Medicare is available to those who are aged 65 and over, or some people under 65 if they have certain disabilities.
Cost: Employer health insurance premiums are typically shared between the employer and the employee, with the employer covering a significant portion of the cost. Medicare is funded by the government, and most people do not pay a premium for Medicare Part A (hospital insurance), but do pay a monthly premium for Part B (medical insurance).
The cost of both options can vary depending on the specific plan chosen, your income, and other factors. This is the really important part of your decision because you need to have a grasp on all the healthcare services you may need in the coming year so you can choose the most appropriate plan for your physical and financial needs.
Benefits: The benefits of employer health insurance can vary widely depending on the specific plan offered by the employer. Medicare has standardized benefits across the country, which includes Part A (hospital insurance), Part B (medical insurance - aka items such as doctors office visits), and Part D (prescription drug coverage). There are also additional supplemental plans that individuals can choose to add to their Medicare coverage to create greater financial protections (out of pocket limits) and may also have some enhanced benefits like hearing, vision &/or dental.
Network: Employer health insurance plans typically have a network of doctors and hospitals that participants can choose from. Medicare also has a network of doctors and hospitals, but Medicare's is much broader and covers most providers in the country.
Coverage: Both employer health insurance and Medicare cover a wide range of medical services, but there may be differences in coverage depending on the specific plan chosen. It's not just about PPO v. HMO.
Spouses: This makes a complicated decision even more daunting. Which of you holds the employer insurance, your individual ages and the size of the employers will all play a role in eligibility. Again, making this a discussion for a qualified & unbiased professional to help guide you through.
No matter what, it is important to carefully evaluate the specific plans and options available in order to make the best choice for your individual situation. The best rule of thumb is to get ahead of the question well before your Initial Enrollment Period for Medicare, talk with your employer/HR/benefit admin and seek out unbiased & professional advice. Certified Senior Advisors® will account for your specific needs when making a recommendation. Have questions - call 773-457-1952 or info@tight-ship.com