While it would be convenient for spouses to have the exact same birthday, this is not usually the case. For many couples, their age gap becomes a problem when it comes time to sign up for Medicare. When one spouse goes on Medicare and the other spouse is not yet eligible, what options do they have?
Eligibility for Medicare
First, it is important to know how eligibility for Medicare works. Most Medicare beneficiaries have worked and paid Medicare payroll taxes for at least 10 years to qualify for premium-free Medicare Part A as well as Part B coverage. If you have not worked for 10 years but your spouse has, you are allowed to claim benefits on their record. Medicare benefits cannot start earlier than when you turn 65, unless you are disabled, have ALS, or have end-stage renal disease. Medicare will only cover you, not your spouse or children if they are not eligible on their own.
This is where problems begin, especially when a working spouse is older than a non-working spouse. Say the working spouse turns 65, retires, and claims Medicare. The other spouse is only 61. How is he or she supposed to get coverage for the next 4 years? There are a few different options available here.
Options for Coverage of a Younger Spouse
- Keep working
Your first option would be simply for the spouse that has work coverage to keep working. While this is not ideal, it might just be a small delay to retirement that will save you a lot of money and headaches. Retiring when the younger spouse turns 65 might just be the easiest option for some people. The other option would be for the younger spouse to find a job that offers health insurance until they turn 65.
- Ask company if they have program to cover spouse
While this is a long-shot, some companies will provide coverage for the younger spouse even after the working spouse retires. Talk to the Human Resources department at the company to see if there is anything they could do.
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a law that gives workers and families that lose employer health coverage the right to maintain the coverage by paying the full premiums. If a company has more than 20 employees, it is required to offer COBRA benefits. COBRA allows coverage for 18 months, sometimes longer, so if the working spouse can wait to retire until 18 months before the younger spouses 65th birthday, this would work out nicely. One caveat to this is that the premiums are going to be much higher than the premiums that were being paid while working, as they are not subsidized by the company anymore. COBRA can be very complicated and can end up costing more than other options. It is also not available to everyone.
One of the most viable options for the majority of people is going to be to buy coverage through the marketplace, created by the Affordable Care Act, until the younger spouse turns 65. Insurance plans offered under the ACA are comprehensive and companies can’t refuse coverage based on pre-existing conditions. People with lower income levels may even qualify for tax credits which lower the premium.
Medicaid is a joint Federal and State program designed to help people with low incomes cover healthcare costs. If, by retiring, your income falls under a certain level, the younger spouse may be eligible for Medicaid coverage. Be aware, as a family, you have to have a very low income and very little assets, so many people will not qualify. To check your state’s medicaid program, go here.
What if the non-working spouse is older?
If the non-working spouse is older than the working spouse, the non-working spouse can qualify on on the working spouses work record if they are at least 62, since that is when qualification for Social Security begins. In this case, if the working spouse is still working, the non-working spouse should stay on the work health insurance and just take Part A, as Part A is premium free for most people. If the working spouse is no longer employed, the non-working spouse should go ahead and apply for coverage fully from Medicare. If the working spouse is younger than 62, the non-working spouse will not be able to claim on the record. In this case, when they are 65, and assuming they have lived in the US for 5 consecutive years, they can purchase Part A and Part B and pay full premiums until the working spouse turns 62. Purchasing Medicare is not cheap, Part A can be as much as $422 a month in 2018. Make sure to consult a qualified professional before making this decision.