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Should I Keep Private Insurance In Addition To Medicare?

If You Are Retiring Past Age 65

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If you are retiring past age 65, it is important to keep in mind Medicare's rules about enrollment and about possible penalties.

When you turn age 65, you are eligible to sign up for Medicare Part B which covers outpatient services. (For more about Part B, click here.) 

If you are still working and are covered by your employer's group health plan, there is no effect on Medicare. However, once you leave the job, you must enroll in Part B within 8 months after the month you retire, even if you continue to be covered by your employer's health plan.

If you do not sign up before the deadline, you may find you do not have health insurance for many months after your employer coverage expires (whether it is the actual coverage or a continuation such as under COBRA.)  You will not be allowed to enroll in Medicare Part B until the next "general enrollment period."  General enrollment periods run from January 1 to March 31 each year. When you sign up during a general enrollment period, coverage does not start until July 1 of that year. AND, you may be subjected to late penalties of 10% of your Part B premium for the rest of your life.

In addition, once you turn 65, a private retiree health plan will only pay for medical expenses that Part B doesn't cover - even if you don't enroll in Medicare. Your former employer's plan considers Medicare to be the primary payer. (For more information about primary and secondary payers, click here.)

Bottom line, apply for Part B as soon as you can.


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