group insurance Archives | 65Medicare.org

There are several types of supplemental insurance that work with Medicare. Medicare is a government-sponsored health insurance program for those who are 65 years old or older, or those who are disabled or qualify because of end-stage renal disease (permanent kidney failure requiring continuous dialysis treatment or a kidney transplant) or Lou Gehrig’s disease (amyotrophic lateral sclerosis). The basic program is called Original Medicare and includes Part A (hospital insurance) and Part B (medical insurance). However, Medicare only covers 80% of your hospital or medical costs. There are a few options for you to consider when deciding whether you need more coverage or not. It is all up to you. Those options are listed below.

Keep Original Medicare (Parts A and B) and do not get additional supplemental insurance. The 20% of out-of-pocket costs that Original Medicare doesn’t pay for will be your responsibility. You will pay your monthly Part B monthly premium. Some people may “opt out” of Part B if they have group coverage through their employer (see below)
Stay with Original Medicare and enroll in a stand-alone Medicare Part D Prescription Drug Plan, since Original Medicare does not include prescription drug coverage. These plans are available from private, Medicare-approved insurance companies.
If you choose Medicare Part C, you can get your Medicare Part A and Part B benefits through a Medicare Advantage plan. Many Medicare Advantage plans also cover routine vision or dental care or other benefits. Hospice care is covered directly by Medicare Part A when you have a Medicare Advantage plan. In this scenario, your Medicare Advantage plan acts as your insurance provider, not Original Medicare. However, you would continue paying your monthly Medicare Part B premium, in addition to the premium your Medicare Advantage plan charges.
- The types of Medicare Advantage plans available in your area (they vary according to which county you live in) may include Preferred Provider Organization (PPO) plans, Health Maintenance Organization (HMO) plans, Medical Savings Account plans (MSA) and others.
- Most Medicare Advantage plans include prescription drug coverage; these are called Medicare Advantage Prescription Drug plans
- Additional benefits, for example, vision and dental coverage are offered by most Medicare Advantage plans.
- The out-of-pocket expenses may vary from plan to plan.

Please note that if you enroll in a Medicare Advantage Plan, you cannot also purchase a Medicare Supplement Plan (Medigap).

Stay with Original Medicare and add a Medicare Supplement (Medigap) plan to help pay for Original Medicare’s out-of-pocket costs, which may include copayments, coinsurance and deductibles. Medicare supplement insurance companies can only sell you a standardized Medicare supplement policy. They are standardized because they must offer the same basic benefits, no matter which insurance company sells it. Administrative costs and the customer service they offer, are usually the only difference between Medicare supplement policies sold by different insurance companies.

Should I Enroll in Medicare Part B?

Should I Enroll in Medicare Part B If I Have Group Employer or Union Coverage?

If you or your spouse (or family member if disabled) are still working, you may have the choice of staying on your employer’s/union group health plan or not. You will need to contact your employer or union benefits administrator to find out whether you must drop your present coverage and get Medicare Part B (medical insurance) or not. This includes federal or state employment, coverage through SHOP (Health Insurance Marketplace Small Business Health Options Program), and those serving in the military on active duty. Delaying your enrollment in Part B may be more beneficial.
You can sign up for Medicare Part A and/or Part B, during a Special Enrollment Period if you or your spouse are still working (or if you are disabled, a family member’s):
- While you are still covered by a group health plan
- During the 8-month period beginning the month following the termination of your employment or coverage, whichever occurs first
Please note that group/union coverage excludes the following:
- COBRA
- VA coverage
- Retiree coverage
- Individual health coverage

Should I Enroll in Medicare Part B If I Have a Plan Through the Health Insurance Marketplace?

If you have your coverage through an Individual Marketplace plan, it might be advantageous for you to enroll in Medicare during your Initial Enrollment Period (the 7-month period beginning 3 months before the month you turn 65, including the month you turn 65, and ending 3 months after the month you turn 65), to avoid paying a late enrollment penalty for Medicare coverage in the future.
If you continue getting help paying your Marketplace plan premium after you enroll in Medicare, you might be penalized by having to pay back that extra help when filing your faxes. You can visit HealthCare.gov to find out more.

Should I Enroll in Medicare Part B If I Have TRICARE?

If you are active duty military (including your family), you will have the health care program called, “TRICARE.” Be aware that you must enroll in Medicare Part A and B during your Initial Enrollment Period, to keep this coverage. If you have Medicare Part A, you must also have Medicare Part B to remain eligible for TRICARE, including prescription drug coverage.
You do not need to sign up for Part B if you’re:
- An active duty service member
- An active duty family member
Enrolled in TRICARE Reserve Select, TRICARE Retired Reserve, TRICARE Young Adult, or the The US Family Health Plan.

Should I Enroll in Medicare Part B If I Have a Health Savings Account?

Once your Medicare coverage starts, you will not be able to contribute to your HSA. If you do contribute after that, you may be obligated to pay a tax penalty. DO NOT APPLY FOR MEDICARE, SOCIAL SECURITY, OR RAILROAD RETIREMENT BOARD BENEFITS IF YOU WOULD LIKE TO CONTINUE CONTRIBUTING TO YOUR HSA!

Before you make any decision about which option to choose for your health insurance coverage, learn as much as you can about what is available to you. An independent broker can help you to compare coverages, and get information on benefits, and estimated costs, to help you find a suitable plan that will meet your needs.

You can also call Medicare at 1-800-MEDICARE (1-800-633-4227). TTY users call 1-877-486-2048

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If you’re on group insurance currently, how do you know if you should switch to Medicare?

It can be a tough choice to make, and if you make the wrong one, it can end up costing you a lot of money and trouble.

Having a Group Insurance Plan AND Medicare

Having two types of insurance is somewhat complicated. In these scenarios, the “coordination of benefits” rules will decide who will pay what.

Here are some guidelines provided by Medicare.gov:

The insurance that pays first (primary payer) pays up to the limits of its coverage.
The one that pays second (secondary payer) only pays if there are costs the primary insurer didn’t cover.
The secondary payer (which may be Medicare) may not pay all the uncovered costs.
If your employer insurance is the secondary payer, you may need to enroll in Medicare Part B before your insurance will pay.

What we find in these situations is that things get messy, and it’s often better to just choose one or the other.

But, how do you know if you should keep your group or make the move on over to Medicare?

Should I Keep My Group Insurance When I Turn 65?

We hate to skirt the issue here, but in all honesty, it depends on each individual situation. If we take a high-level overview of every client we’ve been able to help, it appears that switching to Medicare and adding on a Medigap plan can save most people a lot of money.

However, it completely depends on a variety of factors, such as whether your employer pays your insurance premiums and what the deductibles and copayments are.

Let’s say that your group plan costs $400 per month, your deductible is $1,500, and a regular office visit costs you $35.

On top of those costs, your coinsurance is usually around 20%.

Now, none of this really matters if your employer pays the $4000 premium, and you don’t go to the doctor much.

However, if you are paying that monthly premium, and you do go to the doctor often — or you worry that you may end up needing to — Medicare with a Medigap plan will probably save you a lot of money.

Switching to Medicare with a Medigap Plan

So, what do the costs look like when you switch from a group plan to Medicare?

Medicare Part A: $0.

Medicare Part B: $134.

Medigap Plan: Depends, but let’s say you have a Plan G which covers everything except the Part B deductible, which is $183. So, let’s say your monthly premium is $125 (which is actually high in most areas of the country).

Part D plan: Also depends on which prescriptions you have, but let’s say your premium is $40.

With your group plan, your expenses look like this:

Premium: $400 per month

Deductible: $1,500

Office copay: $35

Coinsurance: 20%

With Medicare + a Medigap plan, your expenses look like this:

Premium: $299 per month

Deductible: $183

Office copay: $0

Coinsurance: 0%

That obviously looks a lot better, doesn’t it?

Now, these numbers are just estimated figures, and they will vary wildly depending on where you live, what gender you are, your age, which carrier you choose, and so on. But this is the type of calculation that should be done when comparing these two options.

In order to figure out what your Medigap costs will be, you’ll need to get a Medigap quote. We can do that for you.

Group Insurance Plan Negatives

Group plans can be very convenient, but there are still some more factors to consider.

The first is that group plans have networks, and those networks will restrict which doctors you can go to. With Medicare, there are no networks. Medicare Advantage is another story, but Medicare with a Medigap plan will give you more freedom than a group plan.

The second is that group plans often have a really horrible deductible. Not always, but usually. We’ve even seen group insurance deductibles are high as $5,000+. With Medicare, that will never be the case. A Medigap plan will pick up that cost.

Coinsurance can be another wallet-drainer, and that’s another cost that a Medigap plan will take care of.

Finally, you have options with Medigap plans. If you get a rate increase, you can shop around and switch to a cheaper plan. Every Medigap plan is standardized by the federal government, so price shopping is really simple.

When to Make the Switch

The easy answer: talk to one of our agents and explain your individual situation.

The hard answer: it depends.

With this topic, there are so many footnotes and asterisks that it’s nearly impossible to give a straight answer.

The basic answers we can give you are that you should enroll in Medicare when you turn 65 — IF it’s looking like it’ll be cheaper than your group plan. An agent can help you make that determination.

If you’re past 65, you can switch to Medicare when you lose your group plan or when you know your group plan is going away.

How to Sign Up

Did Medicare+Medigap make the cut as the more financially prudent choice in your situation? Great!

You can apply for Medicare at your local Social Security office (Find a local SS office). To sign up for a Medigap plan, simply contact us.
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65Medicare.org is a leading, independent Medicare insurance agency for people turning 65 and going on Medicare. We have worked with 10,000+ Medicare-eligible individuals over the last 10+ years, assisting with understanding and comparing the plans. You can get a list of Medigap quotes in your area. Or, if you have any questions about this information, you can contact us online or call us at 877.506.3378.

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