Retiring in 2014? Key Questions Retirees Need to Know About Medicare Coverage

Having healthcare coverage lined up—for the retiree and their family—is critical in making smooth transition from work to retirement

Belleville, Ill.—Jan. 8, 2014― Trying to rebuild their retirement savings post-recession, millions of Americans have delayed their retirement. However, with more baby boomers now reaching their upper 60s, retirement is again in focus. But before signing out of work for the last time, retirees need to make sure they have planned for their post-retirement healthcare coverage, according to Allsup, a nationwide provider of Medicare plan selection services.

“Healthcare costs in retirement are a top concern for many seniors. There is a lot they can do, either right or wrong, that can have a lasting impact on their healthcare costs in retirement,” said Paula Muschler, operations manager of the Allsup Medicare Advisor®. This is a Medicare plan selection service offering personalized help that includes customized research and enrollment assistance for Medicare plan options.

These healthcare costs also may factor into delayed retirements. In fact, more than one-half of older workers ages 58 to 65 say they plan to retire after age 65, according to a 2013 Gallup survey.1 Among all workers, the anticipated retirement age is 66, compared to just 60 in 1995.

“Your retirement age has a significant impact on your healthcare coverage options in retirement,” Muschler said. “It’s important to start planning for this well in advance of retiring so that you have taken the steps needed to ensure you have healthcare coverage on your first day of retirement.”

Researching options and sifting through all the rules and choices can be intimidating for many people, Muschler added. This is especially true after decades of having their employers narrow down their healthcare choices. For example, retirees have an average of 20 Medicare Advantage plans and 35 prescription drug plans, in addition to a dozen supplemental plans and Original Medicare from which to choose.

“Enrolling in Medicare for the first time when reaching age 65, or when retiring and leaving employer coverage for Medicare are two times when people look for our help with Medicare plan choices,” Muschler said. “Medicare plan decisions are usually more complex in these situations.”

Allsup outlines key Medicare plan questions for retirees—those retiring at 65, retiring after turning 65 and retiring before 65.

Medicare and Retiring At 65

Does the person’s employer or spouse’s employer offer retiree healthcare coverage? The availability of retiree healthcare coverage should factor into someone’s Medicare plan choices.

  • Has the retiree decided on the Medicare coverage needed? One of the first decisions is to choose between (a) Original Medicare, plus prescription drug Part D plans and possibly Medigap supplemental coverage, and (b) a Medicare Advantage plan. A Medicare plan specialist can help someone evaluate the advantages and disadvantages.
  • Does the retiree know when they need to enroll in Medicare? Those turning 65 have three months before, the month of and three months after their birthday. Waiting until after their birthday, even in the three-month window, may lead to a gap in healthcare coverage. Waiting longer may lead to enrollment penalties with Part B (medical insurance) coverage and Part D, and can last for as long as someone has Medicare.
  • Has the person secured coverage for dependents also on the employer plan? A spouse and children covered under employer health insurance need to be provided for when moving to Medicare coverage. Options vary, but can include private health coverage.


Medicare and Retiring After Turning 65

Assuming a worker took appropriate steps and coordinated Medicare coverage with their employer at 65, they should be able to transition to Medicare without penalties when they retire. Consider the following.

  • Did the retiree secure Medicare coverage when they turned 65 or appropriately defer coverage? Depending on their employer’s size, the retiree may need to enroll in Medicare and coordinate coverage with both their employer and the federal program.
  • Does the retiree know when they need to enroll in Medicare? Individuals who didn’t enroll in Part B when they were first eligible because they had appropriate coverage under an employer or spouse’s employer plan may receive a special enrollment period when that existing coverage ends. Steps should be taken so that new Medicare coverage can begin as soon as their old employer coverage ends.
  • Will the person need supplemental coverage once they lose their employer group health plan? Medigap, or supplemental plans, has separate rules from other Medicare plans. For example, Medigap plans only have to guarantee they will provide coverage to someone under certain circumstances, such as during the person’s initial enrollment period. After age 65, other factors may limit someone’s options for Medigap if they did not enroll earlier. A Medicare specialist can help evaluate someone’s options.

Medicare and Retiring Before 65

Medicare is not an option for retirees under 65, so it’s important to plan accordingly.

  • Has the person identified healthcare coverage to get them to age 65? Options may include coverage under a spouse’s plan, enrolling in COBRA if eligible or buying private health insurance, possibly through the federal and state-run health insurance exchanges.

Muschler encourages retirees to make certain they enroll in Medicare as soon as they are eligible.
“Early retirees may like their COBRA coverage and, therefore, decide to stay on it until it expires, even if that is after they turn 65,” she said. “But this can lead to late-enrollment penalties when they do go to enroll in Medicare.”

For an evaluation of Medicare options, to learn more about the service.

The Allsup Medicare Advisor has features that help financial advisors guide their clients to the Medicare plans that match their specific lifestyles and healthcare needs. Employers also use Allsup Medicare Advisor for their employees who are retiring and transitioning to Medicare. For more information, go to


1 – May 2013. Gallup. Gallup’s annual “Economy and Personal Finance’ survey.

Allsup is a nationwide provider of Social Security disability, veterans disability appeal, Medicare and Medicare Secondary Payer compliance services for individuals, employers and insurance carriers. Allsup professionals deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. Founded in 1984, the company is based in Belleville, Ill., near St. Louis. For more information, go to or visit Allsup on Facebook.