Still Working at 65? Guidelines For Transitioning to Medicare

The steps to planning for Medicare

Updated on: June 7, 2018

Originally posted on: September 28, 2015
Philip Moeller is co-author of The New York Times bestseller, "Get What's Yours: The Secrets to Maxing Out Your Social Security." He is working on a companion guide to Medicare that will be published in fall of 2016. Moeller currently writes for Money Magazine and PBS NewsHour's Making Sen$e, and is a research fellow at the Center on Aging & Work at Boston College.

U.S. citizens and legal residents who have  been in the U.S. for at least 5 consecutive years become eligible for Medicare at age 65, unless they’re disabled. In cases of disability, a citizen or legal resident under 65 qualifies automatically for Medicare Part A and Part B after receiving Social Security or certain Railroad Retirement Board disability benefits for 2 years.*

However, with more and more people continuing to work well past age 65, you may not need to get Medicare until you no longer have employer group insurance coverage. The big exception is if you work for an employer with fewer than 20 employees. In that case, you must enroll in Medicare, as it becomes  the primary health insurance payer when you turn 65, and your employer policy then becomes the backup, or secondary payer. Whether or not you need Medicare at 65, you should begin planning for it well before this important birthday.


Here are the steps to take:


First, make a list of the prescription drugs you take. Then spend time researching the different types of Medicare policies available where you live. Also, look at your past several years of healthcare expenses to help you project the kinds and amounts of healthcare you might need while on Medicare. Even if you require little healthcare now, it is a near certainty that you will need more and more healthcare, including prescription drugs, as you get older. There are two main Medicare packages you should consider:


Original Medicare is a fee-for-service program where beneficiaries can obtain care from any provider who participates in Medicare. Original Medicare includes Part A (hospital) and Part B (doctor, outpatient and equipment) coverage. People often supplement this with a state-regulated insurance product called Medigap, which covers a lot of the things Original Medicare does not. Nearly everyone with Original Medicare also buys a stand-alone Part D prescription drug plan from a private insurer.


Medicare Advantage plans are sold by private insurers and must offer coverage at least as good as Original Medicare. In nearly all cases, Medicare Advantage plans offer more coverage. Some plans also include dental and vision coverage, which are not covered by Original Medicare. They also usually include  Part D drug coverage. Medicare Advantage plans offer care through their own networks of hospitals, doctors, and other healthcare providers. Members who seek care outside the network may pay much higher costs.


Original Medicare is a national product. Its cost components – premiums, annual deductibles, copays and coinsurance – do not vary by locale. With Medicare Advantage, Part D and Medigap policies, however, premiums and copayments/coinsurance may vary by state. Comparison shopping is a must. Medicare provides online tools through its Plan Finder service so you can see the coverage and prices of policies offered where you live.


Make sure you understand the rules for when you must enroll in Medicare. Failure to buy Medicare policies on a timely basis, including Part D coverage, can result in your having to pay premium surcharges for the rest of your life.


*If the individual has ALS (also called Lou Gehrig’s disease), however, he or she will qualify automatically for Part A and Part B coverage the month disability benefits begin. Individuals of any age with End-Stage Renal Disease qualify for Medicare. They should contact Social Security to learn when and how to enroll in Part A and Part B.