June 1, 2006

Q: I become eligible for Medicare in November but plan to work for a few more years and would prefer to keep my employer’s health insurance. Can I stay with my firm's health plan until I retire, and if so, what should I do about my Medicare? -- Conrada

Dear Conrada,

You do not need to sign up for Medicare if you’d prefer to keep your employer’s health plan. But, there are a few things to keep in mind once you are ready to retire. You are automatically entitled to Medicare Part A (the part of the program that pays for hospital services) at age 65, but you will need to think through how you want to handle enrollment in Medicare Part B (which pays for physician services) and Part D (the new prescription drug benefit).  

Medicare Part B is generally available to people when they turn 65 and are receiving Social Security. Medicare Part B is voluntary and will have a premium of about $100/month in 2007. If you do not need Medicare Part B because you already get coverage from your employer plan, you can delay enrollment. Contact the Social Security Administration to explain your situation. You will need to let them know when you are ready to retire so you can sign up for Part B.

Medicare Part D has similar but not identical rules. If you have drug coverage from your employer plan, you can keep that coverage. However, it is important to confirm with your employer that your drug coverage is at least as generous as the standard Medicare drug benefit. Fortunately, most employer plans are more generous than the standard Medicare drug plan.

You may want to contact 1-800-MEDICARE to ask about the deadlines for signing up for Medicare Parts B and D, and confirm that as long as you have continuous coverage, you won’t face a late enrollment penalty after you retire.

This column was prepared by the Kaiser Family Foundation, an independent, non-profit private foundation based in Menlo Park, Calif., that is not affiliated with the Kaiser Permanente health plan. Do you have questions about the new Medicare drug benefit? Send your questions to Medicare Q and A. The Kaiser Family Foundation. 1330 G St., NW. Washington, DC  20005 or MedicareQ@kff.org. 

(c) 2006, Knight Ridder/Tribune News Service.

Distributed by Knight Ridder/Tribune Information Services.