I was recently asked a question in my free online Medicare workshop by Janet, and she asked, “if Medicare Part A is free – then why wouldn’t I join it?”
This is a great question that I frequently get so, and I want to take the opportunity to explore the two scenarios for this situation: when to take Medicare Part A and when not to take Medicare Part A.
When it comes to Medicare, there are predominantly two main parts:
- Medicare Part A (hospital insurance)
- Medicare Part B (doctors insurance)
Now, with Medicare Part A, if you have worked 40 quarters or more (or your spouse has), you can get Medicare Part A for free.
However, if you or your spouse haven’t worked 40 quarters, Medicare Part A, in 2021, is $471 a month. With that said, most people get Medicare Part A for free.
Now, the real question is, since it’s free – should you get Medicare Part A when you turn 65.
Those who SHOULD get Medicare Part A when you turn 65
As the Medicare rule states, “by the time you turn 65, you either have to be on Medicare, or be covered under an employer health insurance plan that meets Medicare rules.”
There are two paths in which you may fall under:
1. You don’t have any other health insurance when you turn 65.
If you don’t have any other health insurance when you turn 65, you need to be on Medicare Part A, Medicare Part B, and you need to have all of it to avoid Medicare penalties.
2. Your current health insurance doesn’t meet Medicare rules, or your employer will require you to join Medicare Part A.
If you have health insurance through your employer, your spouse’s employer, a retiree plan, you will want to contact the department that handles your health insurance to confirm two things:
- Do they require you to join any parts of Medicare? If yes, you will need to join those parts.
- Is the coverage considered creditable? If no, you will need to join Medicare.
Those who SHOULD NOT get Medicare Part A when you turn 65
If your current health insurance meets Medicare rules, has better coverage than Medicare, doesn’t require you to join any parts of Medicare, and is cheaper than Medicare, you should delay joining Medicare when you turn 65.
Additionally, if you’re currently contributing to a Health Savings Account (HSA), I typically suggest not joining Medicare Part A. Most of the time, there are more tax benefits in the HSA than in Medicare Part A. Medicare also states that you can’t be on Medicare and contribute to your HSA.
Depending on which scenario you fall under, be sure that it is the best decision for you and your health care. I know there are many different rules and parts to Medicare, and they can get confusing if you’re not sure what to look for, and mistakes can be costly and create a big mess. So be sure you look into all of your options.
To easily make the right Medicare decision you can CLICK HERE to sign up for our Medicare Enrollment Concierge.
