Health Insurance: Things to Consider when You Are Eligible for Medicare but Your Spouse is not
People can become eligible for Medicare at any age, but if you are not currently on Medicare and are considering retiring as you approach eligibility age, there's much to consider-especially if you are married. Are you close to 65 years old and thinking of retiring? Is your spouse younger than you? If yes, is your spouse planning to work longer or retire early?
If you answered "yes" to any of these questions, it's time for the two of you to sit down, take a look at your health insurance and Medicare options, and make some decisions.
Medicare health care benefits are for individuals only
Medicare benefits are only for individuals. There are no options for adding dependents. So, while you might soon be eligible for Medicare, your spouse must wait until he or she reaches 65 and becomes eligible. (This assumes that your spouse does not have a medical condition or permanent disability that makes him or her eligible for Medicare before age 65.)
Enroll in Medicare
Three months before you reach age 65, you can begin the enrollment process for Medicare. During this initial enrollment period, you have a few choices:
- You can enroll in Original Medicare (Medicare Part A and Medicare Part B) and a Medicare Prescription Drug Plan (Medicare Part D). You should also consider buying a Medigap insurance policy from a private company at this time. During your initial enrollment period you cannot be denied Medigap coverage due to your health during the six-month period after you enroll in Medicare Part B.
- Your other choice is to enroll in a Medicare Advantage Plan (Medicare Part C), sometimes called an MA Plan. Private companies that have been approved by Medicare offer MA Plans. Medicare Part A (hospital insurance) and Part B (medical insurance) are provided through a Medicare Advantage Plan and not Original Medicare. Nearly all of these plans include prescription drug coverage. You have the option to enroll in a separate Medicare Prescription Drug Plan (Medicare Part D) if drug coverage were not included.
- You can enroll in Original Medicare (Medicare Part A and Medicare Part B) and choose not to enroll in a Prescription Drug Plan (Medicare Part D). It is important to note, however, that not enrolling in a Prescription Drug Plan could result in a late enrollment penalty and no prescription drug coverage. Learn more about the Late Enrollment Penalty.
- Another option is to enroll in a Medicare Supplement Plan (Medigap) and a Prescription Drug Plan (Medicare Part D).
Before you make one of these choices, you may want to consider another option altogether, such as the possibility of your spouse adding you as a dependent on his or her job-related health care plan.
Learn about your spouse's job-related group health care plan
If your spouse is still working, you are entitled to be covered on the same group health care plan options offered to all employees at your spouse's place of work, even if you are 65 or older. Ask the employee benefits department for details about your spouse's group health care plan and options for dependent coverage. Here are some additional considerations:
- Many employers' group health care plans offer more benefits and higher coverage amounts than Medicare. For this reason, group health care may be a good choice for some 65-year-olds and their younger, working spouses. It is important to note that better coverage may come at a higher price, however. Many group care health plans ask the employee to contribute quite a lot toward monthly premiums for dependents so you may be shocked by the reduction in your spouse's paycheck after your deductions are removed. Be sure to consider whether or not it would be less expensive to go on Medicare.
- Timing is critical. Group plans typically only allow employees to join a plan or add dependents to their coverage during the plan's annual open enrollment period. This may be many months before or after your 65th birthday. So, plan ahead if you are considering this option.
If your spouse is covered as a dependent on your employer's health care plan, he or she will lose that coverage when you retire. Again, timing is important, and you'll want to find out when your spouse can get health insurance from his or her own employer or have eligibility for Medicare.
Health insurance for your spouse if he or she is retiring early
What happens if your spouse decides to retire early?
If you retire at 65 and your spouse retires early to join you, you still have the option of enrolling in Medicare. Your spouse, however, will be faced with being uninsured.
Depending on how long it will be before your spouse turns 65, health care plan options might include a continuation of current benefits through a former employer (also known as COBRA) or purchasing an individual health insurance policy. Your household budget may feel a real pinch, as both of these options may require higher monthly insurance premium payments.
As mentioned, there are many considerations and important decisions to make. Each person's circumstances are unique. Before you and your spouse retire, you will want to learn more details about the pros and cons of a particular plan of action, so you can decide what best meets your needs.
Help with making decisions is available through your State Health Insurance Counseling and Assistance Program (SHIP). This program provides free, personalized Medicare counseling, delivered by objective, volunteer counselors. You can also call Medicare at 1-800-MEDICARE (1-800-633-4227). TTY users, call 1-877-486-2048. Lines are open 24 hours a day, 7 days a week.
Medicare & You Handbook,
Medicare and Other Health Benefits: Your Guide to Who Pays First