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Should we take Medicare or keep an employer health plan?


Q. I work full time in the public schools so I have a very good medical insurance plan, however, it is costly. I have been covering my husband and two sons, 21 and 19. My husband is 60 and permanently disabled, and he’s been told he is eligible for Medicare. Should I remove him from my coverage and go with Medicare? Can he be covered by both? Which is more cost effective? I’m looking for the best coverage at the most affordable price.
— Deciding

A. We’re sorry to hear about your husband’s disability.

But we are glad to hear you have health coverage options. It is a difficult decision.

Let’s go through some of the choices.

There are different parts of Medicare to cover specific services: Medicare Part A, Part B and Part D.

Medicare Part A helps pay for hospital and facility costs while Medicare Part B helps pay for medical costs, such as physician services and medical supplies, said Patricia Daquila, a certified financial planner and certified public accountant with Peapack Private Wealth Management in New Providence.

Medicare Part D is for prescription drug coverage, she added.

Most people don’t pay a monthly premium for Part A, but there are premiums associated with Part B and Part D coverage, she said.

“If you are 65 and you have received disability benefits from Social Security for 24 months or you have received certain disability benefits from the Railroad Retirement Board for 24 months, you will automatically get Medicare Part A and Part B,” Daquila said.

She said you can choose to delay Medicare Part B by contacting Social Security after you become eligible and you receive the card.

“It is always critical to discuss this option with your employer’s health care benefit department to understand how Medicare may or may not work with your current coverage,” she said. “There are some plans and health benefit plans, especially those with fewer than 20 employees, that become secondary to Medicare when an enrollee becomes eligible for Medicare.”

If you decide to participate in Medicare Part B, there is a cost. The premium is based on your income, she said.

“The standard Part B premium in 2021 is $148.50 per month if your income was $176,000 or less in 2019 for a married filing joint return,” Daquila said. “The Medicare Part B premium increases as your income increases.”

Medicare Part B pays for many of your medical bills, but not all the costs for covered health care services and supplies are included, she said. Therefore, many individuals purchase a supplemental insurance plan, Medigap, to pay for some of the remaining health care costs such as co-payments, coinsurance and deductibles that are not covered by Medicare.

“It is important to enroll in Medigap coverage within six months following Medicare Part B enrollment,” she said. “The Medicare supplement — Medigap — would be an additional cost along with your Medicare Part B premium and is sold through a private insurance company.”

As for what will be more cost effective, you will need to compare the Medicare costs with your employer plan, she said.

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This story was originally published on Aug. 13, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.