For many, health insurance drives the retirement decision
Eileen St. Pierre, The Everyday Financial Planner
“I’m going to keep working until Medicare kicks in.” That’s the response I hear the most when asking people when they plan to retire. You apply for Medicare at the Social Security website. It just makes sense to apply for both programs at the same time. Your monthly Medicare Part B premium comes out of your Social Security check. Hello Congress – the age to get full benefits for both of these programs should be the same.
Why does it need to be so complicated?
Here’s a little background. When the Social Security Act was passed in 1935, the original age for full benefits was 65 (same as Medicare, which was created in 1965). In 1983, the age started to slowly increase. The rationale was that people were living longer. It makes sense. But no adjustment was made to the Medicare eligibility age. Why not? If you decide to collect Social Security early, why can’t you apply for Medicare early and pay a higher cost?
Many people find themselves staying in jobs just for the health insurance.
The Affordable Care Act tried to address this issue.
I know a lot of people like to trash Obamacare, but the Affordable Care Act does have some good points such as:
- No longer discriminating against people who have pre-existing conditions
- Letting young adults stay on their parents’ plans until age 26
- Capping out-of-pocket costs
- Free preventative care
The health insurance exchanges were created so that people (like me) could get individual polices and thus not be tied to a job just for the health insurance. It’s not a perfect system but at least it is a start.
Going forward, reforms to health insurance and Social Security need to be linked.
Boy, that’s a lot to ask of a Congress who cannot even agree to fund the government for more than a few months. Both Medicare and Social Security are huge, complicated programs. Most Americans simply do not have the financial resources to hire experts to help them get the most out of these programs. Lawmakers need to step back and look at these programs from the average American’s point of view.
Why does it need to be so complicated? Sigh.