Many physicians nearing age 65 look forward to retiring. But many who are close to the traditional age of retirement may choose to continue working.

That’s usually because they find fulfillment in their practice of medicine and the relationships they’ve built with their colleagues and patients. And, of course, there’s also the opportunity to continue to earn a good income.

However, if you are approaching 65 and plan to continue working, there are some critical Medicare decisions you must be ready to make. These cannot be put off. Otherwise, you could be hit with costly penalties for the rest of your life.

It’s Time To Think About Medicare

At around age 65, you’ll become eligible for Original Medicare. This includes Medicare Part A, which helps cover the cost of going to the hospital, and Medicare Part B, which helps pay for visits to a physician.

There are guidelines regarding how and when to enroll in Medicare and these can be impacted by whether or not you have health coverage, either through your employer or through your spouse’s health plan. Our advisors will be happy to review the details with you. But if you plan to continue working past 65 here are some critical points:

Don’t Miss Enrollment Deadlines

If you are covered by a group health plan, you will not be penalized if you do not enroll in Original Medicare when you turn 65. However, from the time you or your spouse are no longer working and/or lose your employer-sponsored health plan, you have 8 months to enroll in Original Medicare. This is called your “Special Enrollment Period.”

If you do not enroll at that time you could go without coverage and you might also pay a monthly penalty for as long as you have Medicare Part B. And the penalty goes up the longer you wait to sign up.

It’s worth noting that you can sign up for Medicare while you or your spouse are still working and have health coverage. If you speak with one of our advisors, they can review your situation and help you determine if enrolling in Medicare at that time would be to your advantage.

There are also considerations regarding the size of the organization where you work. Here are some points to bear in mind:

If You Work With Fewer Than 20 Employees:

As you approach your 65th birthday, you will need to ask the provider of your health insurance coverage if you need to enroll in Medicare. You need to do this because your current coverage may not cover the costs of services after you turn 65. If you need to enroll in Medicare Parts A and B, you should do so within what is called your “Initial Enrollment Period,” and you should do this to avoid future penalties. The Initial Enrollment Period runs for three months prior to your 65th birthday month and three months after your 65th birthday month.

If you do enroll in Medicare, it will become your primary coverage. If you choose to keep your group insurance, it will become your secondary coverage.

Most people in this situation – who do not have dependents on their group health plan – tend to drop their group coverage, especially if they contribute to paying premiums. And they typically opt for a Medicare Supplement and a Medicare Part D prescription drug plan (see below).

If You Work With More Than 20 Employees:

If you work in a setting with more than 20 employees – and your health insurance is provided by your employer, or you are covered through your spouse, you can choose to stay on your group coverage and work past 65 with no penalty.

However, as mentioned, once you leave your employer and are no longer covered by the group plan, you should enroll in Medicare Parts A and Part B during your “Special Enrollment Period.” At that time it is also advisable to consider a Medicare Supplement and Medicare Part D plan.

If You Have COBRA:

If you have coverage through COBRA you should sign up for Medicare when you turn 65. This will ensure that you avoid gaps in your coverage and will not have to pay Part B monthly penalties. If you have COBRA before enrolling in Medicare, your COBRA will most likely end when you sign up.

If you are currently working past age 65 and have coverage through COBRA, you should consider your Medicare options to avoid future penalties. A call to one of our advisors may be beneficial in helping you consider your options and their implications.

Understanding Medicare Supplement And Part D Plans

To understand Medicare Supplement (sometimes called Medigap) and Medicare Part D plans, it’s important to know that Original Medicare typically only pays about 80% of healthcare costs. And it does not cover prescription drug costs.

That’s why, even with Medicare Parts A and B, most people obtain a Medicare Supplement plan – which helps pay many out-of-pocket costs Original Medicare doesn’t pay for – as well as a Medicare Part D prescription drug plan.

You Have A Guaranteed Coverage Window

The key concept to remember is that during your designated enrollment periods you cannot be denied coverage for a Medicare Supplement or Medicare Part D plan. Once these periods end, however, your guaranteed acceptance status terminates.

With Medicare Supplement insurance, during these enrollment periods you’ll be eligible for the best rates you will likely see in your lifetime. After that, getting coverage will require underwriting – which entails answering questions and extra scrutiny regarding your health.

As time goes on, if your health declines, you could be denied coverage or you may have to pay higher premiums. That’s why the decisions you make at this time are critical.

Let An Advisor Cut Through The Confusion

To further add to the complexity, there are different Medicare Supplement and Medicare Part D plans offered by various insurance companies. With numerous plans and options to choose from, trying to determine your best Medicare choices can be time consuming and may seem confusing. This is where the support and guidance from a knowledgeable advisor can be invaluable.

Our advisors have years of experience helping Texas physicians with their Medicare decisions. They can help you cut through the confusion and calmly navigate the Medicare landscape so you can make your best choices and avoid lifelong penalties.

Get Discounts Along With Guidance

They can also let you know about household discounts for Medicare Supplement plans offered by certain providers that could save two spouses thousands of dollars over the life of their policies.

If you’re planning to work past 65, we wish you many rewarding years ahead. But don’t make complex Medicare decisions without understanding the long-term financial ramifications. Speak with a TMA Insurance Trust advisor. As always, they do not receive sales-based commissions so you can be sure they are working solely for your best interests. That is our promise to you.

Call us soon at 800-880-8181 Monday through Friday 8:00 – 5:00 CST.

For over 60 years, TMA Insurance Trust advisors have been serving Texas physicians, their families and staff. TMA Insurance Trust prides itself on offering unbiased information and strategies to members, along with exclusive group rates on a range of the highest-rated plans in the industry.