Retirement is an exciting time in many people’s lives, but in evaluating which benefits to take when, those who leave the workforce may wonder whether they can get Medicare at 62? There’s not a simple yes-or-no answer, but here’s what you need to know so you can make a good decision about this benefit. As always, it may also behoove you to discuss your own particular situation with a trusted financial advisor.
What Is Medicare?
Medicare is the network of several healthcare programs that people gain access to in their later years. Medicare Part A is the program that covers in-facility care, including hospital stays, nursing facilities and hospice care, when necessary. Medicare Part B covers 80% of most medical services, including preventative care, outpatient care and medical devices. Medicare Part B also covers some prescription drugs.
In addition to Medicare Parts A and B, there are several supplemental insurance plans that people can purchase. These plans are commonly known as Medigap, which covers the “gaps” in coverage left by Medicare Parts A and B. Each plan covers different services and equipment. For example, some plans might cover some or all of a person’s Medicare deductibles, others might cover some or all their prescription drug costs and still others might have completely different coverage.
Medicare Eligibility Requirements
The Medicare eligibility requirements can change, but in 2020, people age 65 or older can qualify. Other eligibility requirements include U.S. citizenship or permanent legal residency in the U.S. for at least five years.
Although you must be age 65 to qualify for Medicare, exceptions allow some people under age 65 to apply. For example, if a person has a disability and has been receiving disability benefits for at least 24 months, or has a severe illness, they may qualify for Medicare early. The severe illnesses Medicare covers include end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s Disease.
Can You Get Medicare at Age 62?
Some retirees begin collecting Social Security retirement benefits at age 62 and assume that they can also apply for Medicare. However, Medicare isn’t available to most people until they turn age 65. Again, although this is the general rule, there are some exceptions, and certain people can apply and qualify for Medicare at age 62.
A second scenario is if a person receives a disability pension from the Railroad Retirement Board and meets other specific criteria. Additionally, if a person has ESRD or ALS, they may get Medicare at 62.
However, if you do not meet these specific requirements, you will have to wait until age 65 to receive your Medicare benefits. The good news is you can begin signing up for Medicare three months before your 65th birthday.
Healthcare Alternatives If You Don’t Qualify Before 65
If you do not qualify for Medicare before age 65 and you are retiring, you might be wondering how you will afford healthcare. Fortunately, if you retire before age 65 without health coverage, you have several options.
Group Retiree Coverage
If you were employed while working, you might have had access to group health insurance. Typically, when someone retires, he will have the option to continue his healthcare coverage with the same provider. With this option, the employee will pay for continued coverage out-of-pocket until they are eligible for Medicare, or a fixed period.
The main advantage of group retiree coverage is the cost. Many private employers subsidize the premiums for employees, and some cover part or all the cost for retirees. The other main benefit to group retiree coverage is that the former employee will not have to research, purchase and learn to use a new insurance plan.
The Marketplace
The Health Insurance Marketplace was created by the Affordable Care Act (ACA) in 2010. It provides several private health insurance options at different levels of affordability that are typically tied to a person’s income. A retiree can sign up for insurance coverage on the Marketplace up to 60 days before or after their effective date of retirement.
COBRA
The third option for health insurance in retirement is through the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA mandates that employers offer coverage equal to the benefits that the employee received while employed. However, employers are not required to subsidize the premiums, so it is often an expensive option for retirees. Additionally, COBRA provisions typically last up to 18 months, so it may not cover all a retiree’s medical needs.
Enroll in Your Spouse’s Plan
If you are married, you may also be able to enroll in your spouse’s plan. If your spouse is employed, it might be wise to investigate the cost of becoming a dependent on their plan and if you are eligible. Some companies offer retiree health benefits to the spouses of their employees for an additional premium.
The Takeaway
Healthcare is an integral part of the financial planning process. If you are uninsured in retirement, an ailment or illness could cause you to use a huge chunk of your retirement savings to pay for healthcare. Therefore, it is vital to work with a financial advisor to ensure that you can anticipate your options for healthcare in retirement and save accordingly. The good news is that you have several options if you don’t qualify for Medicare at age 62.
Healthcare Retirement Planning Tips
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Retirement planning and saving for healthcare costs are two essential factors of your financial life. But, you don’t have to figure it all out on your own. If you’d like some guidance from a professional, we can help. Our SmartAsset financial advisor matching tool connects you with up to three financial advisors in your area within minutes. From there, you can compare their qualifications and specialties before deciding to work with one.
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Healthcare cost can vary widely by your location. Therefore, you may want to retire somewhere where healthcare costs the least. To help, we’ve developed a study on the best states for healthcare access.
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