Do I need Medicare if I have retiree insurance?

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Usually yes. Once you become eligible for Medicare, insurance you get from a past job ("retiree insurance") always pays after Medicare. Many retiree policies require you to sign up for Medicare Parts A and B. These policies may help pay for Medicare costs or for things Medicare does not cover. That means you need to enroll in Medicare Part A and Part B so that you will have full insurance coverage.

Some exceptions are:

  1. If you have End-Stage Renal Disease  
  2. If you have health insurance from an HMO under the Federal Employees Health Benefit Program (FEHBP), your coverage may be comprehensive enough that you will not need to sign up for Medicare Part B coverage.

You should keep your retiree plan if you can afford it and it covers the gaps in Medicare. If it covers prescription drugs, find out if it is as good as or better than Medicare's drug coverage (creditable). If it is, you can keep it and not take Medicare drug coverage. If you later need to enroll in Medicare drug coverage (Part D), you can do so without penalty. If it is not, you may want to enroll in Medicare drug coverage.

If you have low income, the Medicare drug benefit may be a good deal for you because you may qualify for Extra Help, the federal program that pays for some or most of the costs of Part D coverage. Compare your retiree drug coverage to the Medicare private drug plans available in your area to decide which option is best for you.

If you are considering dropping your retiree drug coverage and enrolling in Part D, make sure you can drop your retiree drug coverage without losing all your other retiree health benefits. Keep in mind that if your spouse or dependents are not eligible for Medicare and get drug coverage from your retiree benefits, they will not be able to get coverage from your Medicare plan.

Some employers sponsor Medicare private health plans (Medicare Advantage), such as Medicare HMOs and PFFS plans, for retirees who are eligible for Medicare. If you worked for one of these employers, you can get both your Medicare benefits and your retiree health benefits by signing up for a Medicare private health plan that has a contract with your former employer. Some employers require that you join a Medicare private health plan to continue getting retiree health benefits. You can always choose not to take your employer's coverage and sign up for Original Medicare or a Medicare private health plan that is not sponsored by your employer. However, keep in mind that you may not be able to get that retiree coverage if you want it at a later date.

Call your employee benefits office to find out how your retiree policy works with Medicare. Determine whether it pays no matter which doctors you use (or only if you use HMO doctors) and whether it covers prescription drugs. And check to see whether you can get it back if you drop it or buy other insurance.


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How does Medicare work with my federal or military retiree insurance?

My income is low. Are there programs that can help pay for my prescriptions?

How do I enroll in the Medicare prescription drug benefit (Part D)?

Can my employer insurance fill gaps in my Medicare drug coverage (Part D)?

What is a Medicare Advantage plan?

 
LINKS
NARFE (National Association of Retired Federal Employees)

State Insurance Department Websites

State Health Insurance Assistance Program (SHIP) Directory

 
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