Many married couples receive their health insurance through the same employer based health insurance. But what happens when your spouse turns 65 first and qualifies for Medicare before you are eligible? Your options will depend on your specific situation.
Medicare Eligibility
Medicare is individual coverage, meaning each spouse will have their own separate Medicare plan when they become eligible. Anyone who is at least 65 years old, is a naturalized American citizen or permanent legal resident for at least five years is eligible for Medicare Part A and B.
Most people enroll in Medicare Part A and B during their Initial Enrollment Period, the seventh month timeframe around their 65th birthday. Failing to enroll during the initial enrollment period could result in late penalties. (There are some exceptions to this rule for people who continue to work past 65.)
You do not need a work history to qualify for Medicare, but work history will determine what you will pay for Part A. If you or your spouse worked at least 40 quarters, Part A will be free. Part B premiums are income based with those earning higher incomes paying more. Medicare premiums are adjusted every year.
Your Options for Coverage
You have health Insurance through your employer
If you are still working you may already have health insurance through your employer. If this is the case, nothing will change. If your spouse is on your plan, you will need to notify your benefits administrator so you can switch to single coverage when your spouse enrolls in Medicare.
You have health Insurance through your spouse’s employer
If you are covered under your spouse’s employer based insurance you have several options when they become eligible for Medicare. You should carefully compare benefits and costs before enrolling in a plan. You may be locked into your choice until another enrollment period opens up.
- Your Employer– If you are employed and your employer offers health insurance, you can get coverage through them. Losing insurance through your spouse is considered a qualifying event which allows you to enroll in your employer’s plan outside of the usual enrollment period.
- COBRA– If your spouse plans to retire when they enroll in Medicare, you can opt to enroll in COBRA. Employers with more than 20 employees must offer COBRA to the spouses and dependents of their employees for 18 months. COBRA continues the same health insurance coverage you had under your spouse including any dental or vision benefits.
COBRA can be expensive. You will pay the full premium amount plus an administrative fee. And it is temporary. If you have not yet turned 65 by the time your COBRA coverage ends, you will need to find other coverage until you turn 65 and are eligible for Medicare.
If you are on COBRA and turn 65 during the 18 month coverage period, you must enroll in Medicare during your own Initial Enrollment Period, or you may face late penalties. You can cancel your COBRA coverage when you enroll in Medicare.
- ACA Marketplace– under the Affordable Care Act, every state must offer a health insurance exchange or marketplace where individuals can purchase health insurance through private insurers. Some states have their own state run marketplace while others use the federal exchange. Plan benefits and costs can vary greatly between states, insurance carriers, and plan types. Depending on your income you may qualify for a federal premium tax credit that reduces the amount you will pay. Some states offer additional subsidies.
You also have the option to buy an individual off-exchange plan directly through a health insurance carrier. These plans are fully compliant with the ACA but do not offer any subsidies.
Help is Available
This time of transition can be confusing but there are professionals available to help you navigate the changes. If your spouse is leaving their employers insurance you should consult with the company’s benefits administrator to fully understand your options and the timelines involved. A local licensed insurance agent can help you navigate both Medicare and your state’s ACA marketplace. They will be familiar with plan options in your area as well as enrollment deadlines. They can help you find the right coverage for your budget and healthcare needs.
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