What to Expect from Medicare When You Retire

Susie Valentine
Oct 6, 2021

Reclaim your health with us!  This article helps you understand what to expect from Medicare when you retire, and covers:

  • Which Medicare plans or “parts” enroll you automatically and when
  • What Medicare plans are elective and must be added
  • How to decide which elective Medicare plans are right for you
  • How to add elective Medicare plans

Retirement can happen just as we’d always planned and when we least expect it.  Some professionals are lucky enough to decide when to retire and do it at the exact age they’d always hoped to when they started their first job.  Others may be incentivized to retire early; this usually happens when companies or organizations are forced to make budget cuts or are in the midst of a restructuring.  

However your retirement unfolds, it can be surprisingly overwhelming.  There’s so much to get in order, and the last thing you want to worry about is accidentally missing out on Medicare coverage because you thought you’d get it automatically!  We’ll walk you through exactly what to expect from Medicare when you retire, whether you’re under or over 65.

For Professionals Retiring at 65 Years or Older

If you are a U.S. citizen who has paid into social security for 40 quarters (or 10 years), you are automatically enrolled in Original Medicare or Medicare Part A (otherwise known as “the red, white, and blue card”) on your 65th birthday.  Your Medicare card (pictured below) should arrive in the mail at that time.  If it doesn’t, you can call 1-800-Medicare or visit medicare.gov to make sure they have all the information they need to enroll you.  Part A covers inpatient care in a hospital, skilled nursing facility care, nursing home care, hospice care, and home health care. 

If you were still with your employer when you turned 65 and decided to stay on your employer’s plan, then you’ll also have to contact Medicare at the number above to notify them when you retire.  That way, they’ll know you’re finally ready to enroll in Medicare Part B.  *Note that you will already be automatically enrolled in Medicare Part A and should receive your Red, White, and Blue card in the mail.  If you have paid 40 quarters into the Medicare system, you will not have to pay a premium for Medicare Part A.

You should also automatically receive a letter in the mail asking if you’d like to accept or decline Medicare Part B, which covers outpatient doctor visits, medically necessary services and supplies, preventive healthcare services, ambulance services, mental health care, durable medical equipment, and limited outpatient prescription drugs.  Part B does have a premium of about $148.5/month for 2021.

You’ll also be notified that you can accept or decline Medicare Part D, which offers prescription drug coverage.  It is important to note that if you do not enroll in this when you’re first eligible, you’ll likely pay a late enrollment penalty if you join later.  Similarly, if you enroll one year and then do not enroll the next year, you will also incur a penalty.  If you decide to never sign up for Part D, then there is no penalty.  

Medigap plans, or supplement plans, are also offered by private companies to fill in the “gaps” of what Medicare Parts A, B, & D do not include. 

For retirees who are in good health, it may be worth looking into Medicare Advantage, or “Medicare Part C.”  These are “bundled” plans offered by private health insurance companies for folks who are already enrolled in Parts A & B.  They also offer perks like drugstore and fitness discounts.  

For Professionals Retiring under Age 65

If you’re able to retire before you hit age 65 -- lucky you! -- you still have health coverage options available.  If you don’t have a spouse or legal partner whose plan you can hop onto, here are some of these options:

In most cases, you should be eligible for COBRA, or an extension of your current insurance, through your employer for up to 18 months after you retire.  If you haven’t received any information from your job on how to enroll, check in with someone in HR.  

As you may already know, however, the cost of monthly premiums for COBRA can be quite expensive.  Thankfully, there are “pre-Medicare” options offered in certain areas if you are between the age of 55-64.5.  AARP is a good place to start to investigate if something like this is available to you. 

If you aren’t eligible for any of the above options, you can always turn to the healthcare marketplace in your area, or Obamacare.  You may even qualify for free or low-cost Medicaid in your state.  

Making the decision of which plan(s) to choose can be daunting. Thankfully, our Medicare advisors are always available to answer any questions you have about the various plans and help guide you through making the best decision for your individual health needs and history. It’s important to also check back in on your plan(s) of choice every year during open enrollment, especially if your health situation has changed.