Working Past 65?

Pros and Cons of Your Group Health Insurance vs. Medicare

By Michael Sams

When do you plan on retiring?

While 65 is considered the age of retirement, many 65ers keep on keeping on.

In fact, almost 20% of Americans 65+ continue to work, either full- or part-time.

Americans working longer

If you plan on working past the age of 65, you’ll have to decide if and when you’ll drop your group plan and switch over to Medicare.

Is it a good idea?

It depends. Every situation is unique, but when you start looking at what’s best for most people, this is what we find: switching to Medicare + a Medicare Supplement can be a huge money saver.

As with anything, it’s important to throw a disclaimer out there that this will depend on your own group plan, and you should reach out to your agent to verify this. If you don’t have an agent already or need some counsel, click the link below.


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So, how is it that switching to Medicare could save you money?

Let’s break down some numbers:

The average Illinois group plan costs about $480 amount per month. The average deductible is $1,478. Then, you have other costs, like copays — those average between $10-$40 per visit — and co-insurance — that averages between 10-30%.

When all is said and done, you’re paying a hefty chunk of change, and on top of it, you’re responsible for even more costs if you actually want to go to the doctor.

Ahh, the joys of health insurance.

Now, let’s take a look at Medicare + a Medicare Supplement.

Medicare Part A is free. Part B costs $134 for the majority of Americans (note: it’s more if you make above $85,000 a year). The deductibles and coinsurance will be covered by the Medicare Supplement.

Let’s add on a Plan F Medicare Supplement, which is complete first-dollar coverage. In other words, this plan covers everything from day 1. You will never get a bill in the mail. Ever. You can expect to pay about $130 per month for this.

Big disclaimer: The $130 figure is for a 65-year-old, non-tobacco female in zip code 62526. Rates vary according to multiple factors, so please note that this is an illustration. To find out exactly how much you would pay, contact your agent, or let one of our agents assist you.

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You still need to add in a prescription drug plan, but that monthly cost varies so much that it’s hard to throw in an example.

Ahh, OK, we’ll throw in the national average just for kicks. The average monthly premium is $34.

  Average Monthly Premium Average Deductible Average Copay Average Coinsurance
Group Health Plan $480 $1,478 $25 20%
Medicare + Medicare Supplement $298 $0 $0 0%

It seems like the obvious choice, right? Well, that’s when we have to jump back in and remind you that each situation is different.

It’s really common that your employer pays for your health insurance. In that situation, you need to evaluate how much you are paying in deductibles, coinsurance, and copays. Could you actually save money by switching to Medicare?

Once you tally up those costs, you need to get a quote for a Medicare Supplement. Does the cost of the Med Supp outweigh the costs you’re covering under your group plan?

If you’re done trying to figure this out, let us do it for you. For free.

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But, if you’re still hanging in there, here are some more things to consider.

1. Networks with a group plan are going to have limitations.

There is no “Medicare network.” It’s accepted everywhere. If you’re currently having to drive 30+ miles to go to a doctor that’s in your network, that might have an effect on whether or not you want to switch over to Medicare.

2. It’s pretty typical to have a substantial deductible with a group plan.

It’s not uncommon to have a $1,000, $2,000, or even $5,000+ deductible. Medicare’s Part B deductible is only $183. If you get a Plan G Medicare Supplement, everything is covered except for that $183 deductible. And if you get a Plan F Medicare Supplement, you won’t have to pay that deductible at all.

3. Your coinsurance is your responsibility under a group plan.

With a Medicare Supplement, you don’t have coinsurance. Your supplement will pick up those extra costs, so if something terrible happens, you won’t have the financial burden hanging over your shoulders.

So, even if the monthly premium ends up being more to switch to Medicare, it’s important that you shift your perspective.

You have to look at long-term value.

Another important thing to know is that all Medicare Supplement plans are standardized by the government. That means that you can price shop the plan you want and choose the carrier that has the cheapest option.

When could I switch?

There are different windows of opportunity for each piece of Medicare. But before you read any further, we need to have a quick heart to heart.

It was difficult for us to even write this section, because every situation is different. There are so many moving parts, and one little difference can change everything. For example, windows of opportunity vary from state to state, and there are a thousand other little pieces to the puzzle. Are you on Part B already? Is it your primary coverage or your secondary coverage? Do you work for the railroad? Do you take a prescription that’s on the no-go drug list? And it goes on. And on.

So, this section is made for the most common situations, but please give us a call so that we can take a look at your personal situation. One or more of the following statements may be different for you, so don’t hesitate to let us help.

OK, on with it.

Enroll in Medicare Part B when you lose your group plan or when you know that your group coverage is going away. You can do this up to 3 months before you lose your coverage.

→ If your group plan has credible drug coverage, you should sign up for Part D the month before you’ll need to replace it. This is called a Special Enrollment Period (SEP) for those of us who are moving from a group plan to Original Medicare.

For example, if you know you’re losing your group coverage on May 1, you should sign for a Plan D drug plan during the month of April. This will ensure that you are coverage starting on May 1.

Choosing a Medicare Supplement needs to happen 6 months after you enroll in Medicare Part B. During this time, you can select any supplemental plan with no health questions.  

If you already signed up for Part B (over 6 months ago), you have 60 days after you lose your group coverage to sign up for a supplement. This is a Guaranteed Issue (GI) situation, which means there are no health questions. The downside? You’re limited to Plans A, B, C, and F. If you can pass health questions, you can go through underwriting and choose any plan you like.

If you’re losing your Medicare Advantage plan, you can sign up with another Medicare Advantage plan if you want, or you can sign up for Original Medicare. This is also a GI situation. You have 60 days to sign up, but you can only get a Plan A, B, C, or F. If you can pass health questions, you can go through underwriting and choose any plan you like.

Again, please let us make this easy for you. Give us a call, and we’ll tell you exactly when to do what and how to do it.

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How do I sign up?

If you decide you want to switch over to Medicare, you can sign up for it through any of the following methods:

For the Medicare Supplement, we can provide you with competitive quotes. Simply fill out this form, and one of our agents will help you.

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Posted on July 12, 2017

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