Should You Keep Working to Maintain Health Coverage?

Older employees often grapple with the decision to retire, because leaving the workforce means losing the security of a steady paycheck. Unfortunately, salary isn’t the only thing you’ll kiss goodbye when you end your career; you’ll also lose out on the benefits that come with it, and health insurance coverage is a huge perk.

Of course, once you turn 65, you’ll be eligible to sign up for Medicare. Whether you choose original Medicare or Medicare Advantage, you’ll have the option to secure coverage for everything from hospital care to preventive services to prescription medications.

Yet, many with stellar insurance plans through their employer, often partially or fully subsidized, are left wondering if they should stay on the job to maintain health coverage or exit gracefully and move over to Medicare, despite the loss of benefits.

If you receive excellent coverage through your employer, are in good health, and love your job, extending your career to retain insurance isn’t a bad idea. It can also help you save more for your eventual retirement, and prepare for the unexpected costs related to being unemployed.

If you’re considering Medicare, it’s best to remember that that the program is not free. Though most enrollees don’t pay a premium for Part A coverage (which includes hospital care), Parts B and D (preventive services and prescriptions, respectively) charge a monthly premium. Premiums apply to Medicare Advantage coverage as well. No matter which option you choose, you can count on being liable for deductibles, co-pays, and coinsurance — costs that can really add up.

Chances are, you’re responsible for deductibles, co-pays, and coinsurance under your employer’s plan, as well, but you likely pay less than you would under Medicare, especially if your premiums are fully subsidized.

Another thing — Original Medicare doesn’t offer coverage for common services like dental care, vision exams, prescription eyeglasses, and hearing aids. Staying employed a few more years, and retaining coverage in these key areas, could be a huge money-saver down the road.

Of course, if you’re miserable at work and counting down the days until you can retire, then sticking with a bad job for health insurance alone doesn’t make sense, especially when Medicare is a viable option. However, if you’re happy in the working world and need extra funds to cover future healthcare costs, staying employed and maintaining health coverage can provide peace of mind and better prepare you for the expenses associated with federally-subsidized insurance.

Maurie Backman has been writing about personal finance and healthcare for well over a decade. Her articles have appeared on The Motley Fool, CNN Business, USA Today, and MSN. Maurie is a Binghamton University graduate who enjoys reading, hiking, watching hockey, and rejoicing in the fact that her creative writing degree actually amounted to something.