Everything You Need to Know About Medicare and Retirement

Though not all workers get health insurance through their employer, many do. As you get closer to retirement, this may leave you with some confusion about the relationship between Medicare and retirement. For instance, what happens to your employer-provided health coverage when you retire? And, does Medicare kick in as soon as you retire?

We will answer both of these questions and more, but first, let’s look at the basics of Medicare eligibility.

When Am I Eligible for Medicare?

People often associate Medicare with retirement because of Social Security. When you retire, you usually begin collecting your Social Security benefits. You become eligible for Social Security at 62 years old, though the standard age to start getting benefits is 65 years old. This is also the age that most people become eligible for Medicare Part A and Part B. As soon as you turn 65 and start collecting Social Security benefits, you are eligible for both parts of Original Medicare.

Thus, many people believe that they are eligible for Medicare as soon as they retire, but this is not necessarily the case. Some people retire well before their 65th birthday, while some retire well after. However, since most people begin collecting Social Security when they retire, and many people choose to retire when they turn 65, it becomes the time when both Social Security and Medicare (Part A and B) benefits kick in.

What Happens to My Employer-Provided Healthcare When I Retire?

In most cases, you lose your employer-covered healthcare whenever you choose to stop working. Therefore, when you retire, you won’t get to keep your employer’s insurance plan. However, some employers offer retiree insurance. If you have retiree insurance, you can continue with your employer-provided insurance rather than switching to Medicare.

Additionally, some employers offer Medicare Advantage plans for retirees. In essence, this is a continuation of private insurance that provides all of the same benefits as Original Medicare. Medicare Advantage also has extra benefits, such as Part D prescription drug coverage.

Once you retire, you can either continue with an employer-provided plan (if your employee offers this option) or switch to Original Medicare, as long as you meet the requirements outlined above.

Bottom Line

Though the two are related, Medicare and retirement do not always go hand in hand. You become eligible for Medicare Part A when you turn 65. Once you start collecting Social Security benefits, you qualify for Medicare Part B (though you can acquire Part B earlier if you go directly through Medicare).

If your employer allows it, you may be able to keep your current health insurance during your retirement. You also have the option of getting a Medicare Advantage plan, which offers the same benefits as Part A and B, as well as Part D benefits. Finally, if your employer does not agree to extend your benefits, you can simply switch to Medicare once you’re eligible. Fortunately, most people qualify for Medicare by the time they retire.

If you’d like to learn more about Medicare and retirement, feel free to fill out this form or give us a call anytime. Our licensed agents are focused on giving you the information you need, with zero pressure to enroll in a plan.