It depends. Retiree coverage can be very expensive but, if you can afford it, it may still be worth the price. It acts as supplemental insurance, and may fill many of the gaps in Original Medicare’s coverage, such as deductibles and coinsurance. It may also pay for some health care Medicare does not cover.
If your retiree plan gives you good vision and dental coverage and fills many of the gaps in your Medicare coverage, you should think hard before dropping it. You should also find out whether the drug coverage through your retiree insurance is considered as good or better than Medicare’s. This is called creditable coverage. If it is, you can join a Medicare private drug plan later without penalty if you need it.
To find out exactly what your retiree insurance covers and whether its drug coverage is considered creditable, contact the Human Resources Department of the company through which you have retiree coverage.
Some employers sponsor Medicare Advantage Plans, 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 from a Medicare Advantage Plan that has a contract with your former employer. Some employers require that you join a Medicare Advantage Plan to continue getting retiree health benefits. You can always choose not to take your employer’s coverage. However, keep in mind that you may not be able to get that retiree coverage if you want it at a later date.
If you decide to drop your retiree insurance, make sure you understand how else you can supplement your Medicare coverage. Medigap insurance is one choice, but you may only have the right to buy a Medigap policy at certain times. You can also join a Medicare private health plan that is not sponsored by your employer.
If your income is low, you may qualify for government programs that help pay for your care.