When you turn 65 you may be automatically enrolled in Medicare. However, there are reasons you may want to defer Medicare, specifically Medicare Part B.
Why Defer
If you are working past 65 and receiving insurance through your employer, you may want to defer Medicare Part B. Medicare Part B has a monthly premium. This premium is determined by your income. In 2022, the base monthly premium is $170.10. It may be more than that based on your income. This is for a single beneficiary.
Chances are, a policy for a single beneficiary through your employer is less expensive. If this is the case, you may want to defer Medicare Part B.
Additionally, if you are still working and your spouse is not eligible for Medicare, you may wish to defer Medicare Part B. This way, your spouse will retain their current coverage at their current rate.
Retirement
Once you retire, you’ll have 8 months to re-enroll in Medicare Part B without penalty. After that, you will be subject to a late penalty. You should contact social security to re-enroll.
If your spouse is still ineligible for Medicare, you have a few options.
COBRA- If you’d like your spouse or dependents to retain their current coverage, they can do so through COBRA. Make sure you enroll in Part B though. COBRA is not considered creditable coverage and deferring Part B in favor of COBRA may result in a late penalty. Depending upon their age, your spouse may be able to bridge the gap until they are eligible for Medicare with COBRA.
Marketplace- COBRA is usually very expensive. Your spouse will have to pay their portion plus your employer’s contribution. When you lose your coverage (after retirement) your spouse and dependents will be eligible for a special enrollment period. They can utilize healthcare.gov or work with a broker to find an appropriate plan.
Private Insurance- For those ineligible for a premium tax credit, private insurance may be an option, specifically short term medical insurance. This can be an ideal way to customize your health insurance options at a more affordable rate.
Part A
You most likely will only need to defer Part B. Part A does not usually have a premium associated with it. However, if you are required to pay a monthly premium for Part A and are receiving your creditable health insurance through an employer, you may want to defer Part A as well.
If your Part A has a premium, it can be rather expensive. However, if you continue to work, once you’ve met 40 quarters, you will no longer be responsible for the Part A premium. Again, most people do NOT have to pay for Part A.
If you do decide to defer Part B (or Part A), make sure you follow the instructions on the back of the card and send it back. If you keep the card, you will keep your Medicare coverage and you will be charged for it.
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Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.
