Medicare
Health Care Coverage for Retirees

By Financial Advisor Peter Egolf

Health Insurance Coverage After Age 65

Employers provide the majority of health insurance coverage in the United States.

To a lesser extent, health insurance can be obtained via Medicaid (limited income or disability), Medicare (after you turn 65), individual healthcare marketplace, or Veteran’s Affairs.¹ Thus, many would-be retirees do not know what to do after leaving their employer and transitioning to retirement.

Medicare is the health insurance system for U.S. citizens age 65 and older.

Generally speaking, if you retire before age 65, you must enroll in Medicare at age 65. If you are retiring after 65, you may have additional factors that can impact when you should enroll in Medicare.²

What are the core parts of Medicare?

• Part A - Hospital Insurance – No premium³, but high deductibles.
• Part B - Medicare Insurance – Monthly premium dependent on income. 20% Coinsurance.

Supplemental Insurance for Medicare

• Medigap - Supplemental Insurance - Benefits are standardized and provide coverage beyond Part A + B but are a supplemental monthly premium. This is an important piece as there are no limits on out-of-pocket costs for Part A + B, so supplemental insurance offers additional coverage that you might otherwise have to pay out-of-pocket.
• Part D - Drug Coverage – Coverage will depend on your needs. Enrolling at your initial enrollment (even if you don’t need significant coverage) is likely sensible to provide future coverage. This will also carry a monthly premium.
• Alternatively, you can purchase Medicare Advantage (Part C) that can replace Part A, B, and sometimes D.

Therefore, you can choose between Original Medicare + Medigap + Part D or Medicare Advantage. You can see the costs for each of these parts here.

1. www.census.gov/library/publications/2022/demo/p60-278.html
2. https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/working-past-65
3. You usually don't pay a monthly premium for Part A if you (or another qualifying person, like your current or former spouse) paid Medicare taxes while working for a certain amount of time (usually 10 years of work).