Planning for Medicare and SS benefits

[MikeC412889]

I was laid off from my corporate job in 2018 and have entered into semi-retirement mode. I have been contract consulting the last two year as a 1099 contractor.  The salary, of course is not near what I was making at my previous job, but it is sufficient.  When I was laid off, I become covered under my wife's medical plan.

This year (September 2021) I will be turning 64 and I want to begin planning now for Medicare & Social Security so I can make the right decisions.  I want to defer my SS benefits until 68 maybe even until I am 70 to get max benefit amount. 

Because my wife still works, I do not need Medicare when I turn 65 (and for the next 3-5 years after that).  I have read/heard people say that once I reach 65 that I should sign up for Part A (because its free) but defer Part B. I have also heard that I need to have SS benefit payouts in order to get Medicare (Part A?).  It is all confusing, so wanting to get guidance on this important topic so I am prepared for next summer.

Thank you.

[MikeC412889]

Thank you all for your comments and guidance!  The links and their respective information were very helpful.

I will use your input to create a plan!

Thanks again.

[GailL1]

@MikeC412889 

As others have said, you need to understand how Medicare works with other insurance just so you don't get caught not signing up when you should.   Those Medicare Part B & Part D premium penalties don't ever go away and get bigger as time goes by -  So check with the HR Dept. at your wife's  company to find out if 

1.  If it is credible coverage with Medicare - especially any prescription drug benefits (Part D)

2.  Many employer coverages will make you sign up for (at least) Medicare Part A - that's the Hospital Insurance Medicare coverage and it is free to most beneficiaries if you have worked long enough to be vested and have paid your Medicare payroll taxes through the years.

Employer coverage can work with this part of Medicare, specifically and in some hierarchy of payment with the other parts sometimes - just be clear about both coverages and how they work together.

3.  When you turn 65 - the size of the employer determines how their plan will work with Medicare.  The HR Dept should be able to describe this to you.

Here is an explanation from Medicare.gov as to how this works - read it and then click on whichever scenario(s) apply to your case.

Medicare.gov - How Medicare works with other insurance 

Just understand it and you should be fine.

[ReTiReD51]

.

Make sure you understand how your wife’s group insurance works with Medicare. The size of the employer determines whether or not you can delay Part A or Part B without paying a penalty later.

Other than that, @NicolePhillips  gave you sound and accurate advice.

https://www.medicare.gov/sign-up-change-plans/how-do-i-get-parts-a-b/should-i-get-parts-a-b

[Tonster521]

@MikeC412889 

I am providing a link to a Medicare article from the AARP website. https://www.aarp.org/health/medicare-insurance/info-08-2009/ask_ms_medicare_question_64.html Hopefully, I copied and pasted it correctly. That article should provide some insight for your situation. However, I would obtain a copy of your spouse's Plan Document or the Summary Plan Description (SPD) and carefully read the provisions regarding Medicare. If there isn't a Medicare section in the SPD, you may find the appropriate language in a section entitled Non-Duplication or Coordination of Benefits. Your spouse's Plan may include language that carves out Medicare's benefits whether or not you enrolled in Medicare. This means that if eligible for Medicare and you do not enroll, your spouse's Plan will reduce benefits otherwise payable. For example, you incur $1,000 of eligible medical expenses of which Medicare would pay $800 and you pay $200, your spouse's Plan may carve out the $800 whether or not you enrolled  with Medicare. In that situation, you would pay the $1,000 of medical expenses. Second, you should also do the math regarding any contributions that your spouse's Plan requires. For example, your spouse's Plan may require a $500 monthly contribution for employee and spouse ( 75% /25% cost sharing for an estimated $1,000/month/person cost) with a $1,500 calendar year deductible and 80%/20% coverage until out of pocket expenses reach $4,500. You may find Medicare Advantage Plans providing just as much coverage, if not more, for just the Medicare Part B contribution which is about $148/month. There are a number of concerns that you need to review. It is not easy. Start with your spouse's employer Plan. They may have a person in their HR Dept. who is up to speed on their Plan provisions. However, always obtain a copy of the SPD wherein you will have the Medicare requirements and benefit payment provisions in writing. 

[NicolePhillips]

Having a wife who is still working is beneficial to you, if you are covered by a health insurance plan offered by her employer.  As long as it includes prescription drug coverage, you should be fine and there is no need to apply for Medicare.  You will receive it when you make 65 automatically.  Keep in mind, you do need to have a prescription drug plan, as a minimal, if something changes and you are no longer covered by your the plan with your wife's employer, to avoid the late enrollment penalty fees which can add up the longer you are without coverage.  Keep your coverage current until you are ready to apply for Social Security and other health insurance and you will not have any problems.

[Tonster521]

@NicolePhillips 

You need to get into the details of the working spouse's Plan in order to make a sound decision. As I mentioned in my reply to @MikeC412889 , you may be enrolled for coverage, but your benefit payments may be zero ($0.00) due to Non-Duplication or Coordination of Benefits provisions in the working spouse's Plan. In that case, Medicare enrollment is a critical. Also, if an employer is not clever to include a Medicare "carve out" provision with their current Plan, one needs to review any and all Plan changes from year to year to stay on top if their medical benefit provisions.

[DeahWA]

@MikeC412889 I can't advise you on much of what you've asked here, but my personal experience suggests you think again about deferring signing up for Medicare. The reason is that you will be penalized for EVERY month after you are 65 once you do sign up. The penalty applies to both the Part D drug plans and the Part B Medicare supplement or gap plans. And the Penalty, in my understanding of my own situation will last for the rest of your life. I have asked to pay the penalty in one lumpsum to get it over with, but there is no mechanism for doing that, is what I was told. It's a huge rip off when, like you, I didn't need Medicare coverage until years later. "Getting more from SS" really isn't worth it. 

[Tonster521]

@DeahWA 

It isn't clear from your posting whether you had other "creditable coverage" in place of Medicare. If you didn't, delaying Medicare enrollment will require a higher contributions for Parts B and D due to adverse risk. If you had other "creditable coverage", you may appeal Medicare's decision. If needed, you may find help with your appeal through your Representative's Office.