Many older adults who qualify for Medicare wonder exactly how Medicare will factor in their future plans, but also have private health insurance through a partner or employer. As soon as they are eligible, can they enroll in Medicare Part A and Medicare Part B, or are there good reasons to postpone enrollment? A few variables will depend on the response, so read on to find out what choice might be a good match for you.
Regardless of other coverage, when they reach the qualifying age of 65 years old, most individuals opt to participate in Medicare Part A. For most Medicare-eligible people, Medicare Part A is free and helps pay for inpatient medical treatment, skilled nursing care, hospice, and home health care. If you are enrolled and need all of these programs, depending on the other program, Medicare can be either the primary or secondary payer for your claims. It might help to limit your exposure to future out-of-pocket costs by getting a primary and secondary payer.
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Medicare Part B, which includes outpatient medical facilities, is a little trickier. You may plan to postpone enrolling in Medicare Part B to avoid paying the monthly premiums if you already have private health insurance through a former or current employer, union, or spouse. The regular monthly premium for Medicare Part B in 2020 is $144.60, but for those with higher salaries, it can be substantially more. There is no penalty for delaying enrollment in Medicare Part B if the coverage you have is deemed "creditable" by Medicare requirements.
To find out whether your package qualifies, contact your employer or union benefits administrator provider. If it is at least as robust as the benefits offered by Medicare Part B, coverage is considered creditable. Many people are shocked to find that Medicare does not accept the COBRA insurance provided by some employers during transitional periods and employment-based retirement insurance as creditable. Often, if you lose your private health insurance and do not participate in Medicare Part B within 8 months, you may be subject to fines.
Both plans will be in place if you plan to enroll in Medicare Part B and maintain your private insurance coverage. Benefit rules coordination will determine which policy is the primary payer and which is the secondary payer. How do you know this would be the primary policy? Generally speaking, it would be the primary payer and Medicare would be secondary if the private policy is by a larger employer, with 20 or more employers.
For fewer than 20 workers, if the private insurance coverage is from a smaller company, then Medicare will be primary and the private policy will be secondary. Bear in mind that you will need to enroll in Medicare Part B before your insurance can pay if your work or employer insurance is the secondary payer.
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