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By Margie Ware
It used to be as predictable as death and taxes that people retired at 65. Then the world began to change with the disappearance of the defined benefit pension, the introduction of IRAs, 401K’s and other retirement vehicles. The increased cost of living combined with a healthier outlook for “young” seniors between the age 65 and 75 has resulted in many people working after 65. They may attempt a new career, take on a part-time job, or simply keep plugging along at their traditional place of employment.
A few years ago, the full retirement age for Social Security benefits began to move up, and this year those born in 1942 need to wait until 65 years and 10 months to collect their full Social Security benefits. The result is that more and more individuals are waiting to retire beyond age 65. What are the implications for Medicare and health insurance in general?
• While full retirement age for Social Security has changed, the age at which you sign up for Medicare is still 65. You may sign up three months before you turn 65, during the month you turn 65, or in the three months after you turn 65. We have been used to the two dates being the same, but they aren’t now. So increasingly, we are running into people who “forget” to sign up for Medicare Part A, which is free.
• If you are not collecting Social Security benefits before age 65, Social Security will not get in touch with you to tell you it’s time to sign up for Medicare. If, on the other hand, you are already receiving benefits, you will be notified by mail. People who are receiving benefits will have their Part B premium deducted from their Social Security benefit check; for those who are not yet collecting, you will have to send in payments each month if you take Part B.
And who needs to take Part B? Anyone who is not covered by a health insurance plan as an employee. Notice that the word is “employee.” Although your former employer may be paying all or part of your health insurance premium, it isn’t “employee” insurance unless you’re still on the payroll. Conversely, if you still work, or if your spouse still works, you may not need to take Part B until both you and your spouse stop working.
It is also true that in the future, it will be common for people to leave and re-enter the work force multiple times. So don’t be afraid if you take Part B that you are stuck with it forever. A new job at age 67 providing health insurance benefits may allow you to drop Part B and then pick it up again after your second retirement.
Because we so often associate health insurance with work status, Elder Services SHINE (Serving Health Information Needs of Elders) program often meets with elders who are well into their 70’s and still working simply to maintain coverage. If your employer pays a generous portion of your insurance, then this may be a wise thing to do if the extra income is important. But often, older employees are paying the same $400 to 500 per month premium as their younger colleagues, even though they could substitute Part B coverage and a Medigap plan for only $250 per month plus the cost of prescription drugs.
Buying your health coverage “off the shelf” gives you more flexibility in your work life. Perhaps you work 25 or 30 hours a week to maintain coverage. Being responsible for your own coverage means that you may have the option of tailoring your hours to a schedule that is less onerous. Perhaps your employer would prefer to reimburse you for your Part B and Medigap coverage if it is less expensive than the employer contribution currently being paid.
Often an individual over 65 chooses to remain working to provide health insurance coverage for a younger spouse who does not have Medicare. With the advent of Commonwealth Care, the new Massachusetts health insurance program, and the rollout of Commonwealth Choice later this year, there will be more options for affordable coverage for working and middle class families. Again, it may be possible for the older spouse can obtain health insurance.
SHINE counselors are available at your local Council on Aging and at Elder Services of Berkshire County to answer questions as you approach your 65 birthday. Contact us at 800-544-5242 or 499-0524 as soon as you begin to consider your options.
Margie Ware is the Elder Services’ Regional SHINE Director