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What Happens When One Spouse Goes on Medicare

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What Happens When One Spouse Goes on Medicare

Transitioning to Medicare can be a confusing time, especially if you and your spouse are reaching Medicare eligibility at different ages. If one spouse qualifies for Medicare sooner than the other, it raises questions about how it will impact your healthcare coverage and costs as a couple. This article breaks down what happens when one spouse goes on Medicare while the other has alternate insurance.

How Medicare Eligibility Works for Couples

In most cases, the age qualifications are the same for single adults as for those who are married. Medicare eligibility typically begins at age 65, with some exceptions:

  • If you are already receiving Social Security retirement benefits, you will be automatically enrolled in Medicare Parts A and B starting the first day of the month you turn 65.
  • If you have not filed for Social Security, you will need to proactively enroll in Medicare during your Initial Enrollment Period – the 7 month window surrounding your 65th birthday.
  • People younger than 65 can enroll if they have been receiving disability benefits from Social Security or the Railroad Retirement Board for at least 24 months.
  • Those with End Stage Renal Disease (ESRD) or ALS can enroll at any age.

Since most married couples are within a few years of age from one another, it’s common for both spouses to transition onto Medicare around the same time frame. However, it’s certainly possible for one spouse to gain Medicare eligibility a few years earlier than the other if their birthdays are further apart.

When this happens, it can raise questions about coordination of benefits between Medicare and other insurance plans.

What if My Spouse Still Has Employer Group Health Insurance?

If your spouse is still actively working and enrolled in an employer’s group health plan, it is possible for them to remain covered as the primary insured on that plan while you transition to Medicare.

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However, once they retire and leave that employer plan, your Medicare coverage would take over as the primary coverage (more on coordination of benefits later).

It is illegal for group health plans to use your new Medicare entitlement as justification for terminating coverage for a still-actively-working spouse. The plan must continue to offer the same benefits as if you did not have Medicare.

However, some employer plans contain stipulations about working a certain numbers of hours to remain covered as an active employee. So be sure to understand those requirements.

Coordinating Medicare Benefits with Your Spouse’s Existing Insurance

Once one spouse transitions to Medicare, while the other remains on an alternate insurance plan, it kicks off a period of coordinating benefits between those two plans. Here is how payment coordination works:

  • The plan covering you as the primary policy holder (either Medicare or the group insurance plan) pays claims first.
  • The plan covering you as a spouse pays secondary, covering any outstanding balances.

These insurance coordination rules apply in a variety of scenarios:

  • If you have Medicare but your spouse remains on an employer plan through active employment.
  • If you enroll in Medicare but your spouse maintains coverage through TRI-CARE, VA benefits, or a Marketplace private insurance plan during General Enrollment periods.

The same principles apply in any of these situations – Medicare for the eligible spouse, then the second plan pays additional costs.

Impacts to Premiums When One Spouse Transitions to Medicare

Gaining Medicare eligibility for one spouse while the other retains separate insurance does add an additional layer of premium costs to your family’s healthcare budget.

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Coverage premiums – what you pay to have insurance, usually monthly – must now be paid to two different entities.

The spouse who goes on Medicare will likely take over payment of their Part B premium, typically removed automatically from Social Security payments. Part D prescription drug and/or Medicare Supplement plans also often have monthly premium costs.

Simultaneously, you would keep paying the other insurance premiums – be that an employer plan, Tricare, VA, or Marketplace policy.

So during the time period when spouses are covered under different plans, expect higher overall healthcare costs for your household budget to account for both sets of premiums.

Special Enrollment Periods for the Non-Medicare Spouse

Medicare’s Special Enrollment Periods (SEPs) provide a way for the non-Medicare spouse to sign up for Medicare outside the typical windows.

When the Medicare-enrolled spouse ends their coverage through an employer group health plan, the other spouse gains access to a Special Enrollment Period to sign up for Medicare without penalty. This must be done within 8 months after leaving the employer coverage.

<u>Additionally, if the non-Medicare spouse loses their health insurance involuntarily, they qualify for a SEP at that time</u>. For example, if they get laid off or their COBRA/retiree coverage gets discontinued through the employer, they can enroll immediately.

This provides some flexibility for the non-eligible-yet spouse to transition over to Medicare to match their husband/wife/partner, instead of potentially carrying the other insurance alone for years.

Strategizing to Minimize Costs and Disruption

When possible, aim to time both spouse’s transition from other insurance to Medicare Close together during the same open enrollment windows.

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This minimizes gaps between effective dates of coverage and enrollment in supplemental plans like Medigap or Part D. Both can have premium penalties applied if you delay signing up beyond your Initial Enrollment Period.

It also keeps costs lower by condensing the timeframe that dual premiums have to be paid separately. Limiting gaps in coverage also assures you maintain access to healthcare without disruption.

However, because employers often mandate retirement ages that don’t perfectly align with turning 65 and gaining Medicare eligibility, this seamless dual transition can be difficult.

When required to stagger Medicare enrollments between spouses, take advantage of Special Enrollment Periods detailed above to add the non-Medicare partner closer within the same year or two. This will minimize paying double premiums over many years.

How Divorce Impacts Medicare Enrollment

Finally, managing Medicare gets even trickier with divorce. If married, expect to lose spouse SS income/benefits that were paying Medicare premiums. Income-based reductions in costs may be impacted.

And special enrollment options as a “currently covered plan member” under the ex-spouse disappears. So enroll proactively during an open period prior to final divorce date to avoid issues.

Knowledge is power when making big healthcare changes. As one spouse gains Medicare eligibility ahead of the other, coordinate smartly, leverage special enrollment periods as needed, and budget adequately to avoid gaps in care.

Also Read: Does Medicare Cover Spouse Under 65?

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