Medicare Eligible but Still Working – What Do You Do?

Medicare Eligible but Still Working

Medicare eligible typically begins at age 65, providing health insurance options for older Americans. However, many individuals find themselves still working and covered by employer health plans when they reach this milestone. This situation creates unique considerations and decisions regarding whether to enroll in Medicare, retain employer coverage, or utilize a combination of both. Understanding the nuances of Medicare eligible, the implications of different coverage choices, and how they interact with employer-provided benefits is crucial for making informed decisions. This guide will explore common scenarios faced by those still working while eligible for Medicare, providing clarity on the best course of action for each situation.

Understanding Medicare Basics

Navigating Medicare can be complex, especially when you’re still working. A fundamental understanding of Medicare’s different parts and eligibility criteria is essential to making informed choices.

Parts of Medicare

Part A (Hospital Insurance)

Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.

Generally premium-free if you or your spouse paid Medicare taxes while working.

Part B (Medical Insurance)

Covers outpatient care, doctor services, preventive services, and some home health care.

Requires a monthly premium, which varies based on income.

Part C (Medicare Advantage)

An alternative to Original Medicare (Parts A and B) offered by private insurance companies.

Often includes additional benefits like vision, dental, and hearing, and may include Part D (prescription drug coverage).

Part D (Prescription Drug Coverage)

Helps cover the cost of prescription drugs.

Available through Medicare-approved private insurers, often with a monthly premium and cost-sharing requirements.

Eligibility Criteria

  • Typically, you are eligible for Medicare if you are 65 or older and a U.S. citizen or legal permanent resident for at least five continuous years.
  • Individuals under 65 may also qualify if they have certain disabilities or conditions, such as End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS).

Employer Health Coverage vs. Medicare

When deciding between employer health coverage and Medicare, it’s essential to weigh the costs and benefits, understand how the two interact, and consider the size of your employer.

1. Comparing Costs and Benefits

  • Assess the premiums, deductibles, co-pays, and out-of-pocket maximums for both your employer’s plan and Medicare.
  • Evaluate the scope of coverage, including services, medications, and provider networks, to determine which option offers the best value for your healthcare needs.

2. How Employer Coverage Interacts with Medicare

  • Understand the coordination of benefits between Medicare and employer coverage, especially how primary and secondary payers are determined.
  • Learn about the rules for when you must enroll in Medicare to avoid penalties, and how your employer plan might change once you become eligible for Medicare.

3. Large Employer vs. Small Employer Considerations

  • If you work for a large employer (20 or more employees), your employer’s insurance is typically primary, and Medicare is secondary.
  • For small employers (fewer than 20 employees), Medicare usually becomes the primary payer, and your employer’s coverage is secondary.
  • Consider the implications of these rules on your coverage choices, potential out-of-pocket costs, and the necessity of enrolling in different parts of Medicare.

Read more: Is Outpatient Surgery Covered By Medicare Part A


Navigating Medicare eligible while still employed presents a pivotal decision-making moment for many individuals nearing age 65. Understanding your options and making informed choices can significantly impact your healthcare coverage and financial well-being.

Key considerations include evaluating the benefits and costs of Medicare versus your employer-provided health insurance. Medicare offers comprehensive coverage through its various parts (A, B, C, D) but may require careful coordination with your employer’s plan to maximize benefits and minimize out-of-pocket expenses.

Choosing to enroll in Medicare Part A, delaying Part B if you have credible employer coverage, or fully transitioning to Medicare depends on your unique circumstances and healthcare needs. Supplemental options like Medigap policies can provide additional coverage to fill gaps not covered by Original Medicare.

To make the best decision, consult with your employer’s HR department, Medicare advisors, and consider your current health status and future healthcare needs. By taking these steps, you can ensure you’re making a well-informed decision that aligns with your healthcare goals and financial situation, providing peace of mind as you continue to work and approach retirement age.


Free Medicare Quote