We are talking about business owners 65+ leaving the group health plan. Having a sixty-five year old off the group health plan and having their coverage provided by Medicare and a Medicare Supplement (which equals better coverage) should mean everyone walks away happy. This was the case several years ago, but now it takes a little more evaluation to see if it is best for all parties involved.
Medicare has implemented a high income penalty, that changed the way business owners should analyze their health insurance once they become eligible for Medicare. This penalty starts with incomes as low as $85,000 for individuals and $170,000 for couples. The cost of this penalty or tax whichever you would like to call it, starts at roughly $50 and goes up to roughly $285 per month/per individual.
So let's take a basic example of a husband and wife both 65. They own a business and are in the highest income tax bracket.
• Group Health Insurance - $700 per month for the couple (Medical and Drug)
• Medicare Part A - Free,
• Medicare Part B - $335.70 per month individually (includes high income penalty)
• Medicare Part D - $100 per month individually (includes high income penalty)
• Medicare Supplement - $100 per month (rates available at www.medicareinsurancefinders.com)
Total Monthly Cost of Medicare Option Per Person = $565.70
COUPLE COST COMPARISON - MEDICARE vs. GROUP HEALTH
Group Health - $700 vs. Medicare Option - $1,131.40
Business owners should consider their options carefully before making any decisions to get on Medicare. Realize that their are enrollment periods with Medicare and they can be very strict. Medicare Insurance Finders and MWG Senior Services have advisors that can help analyze your Medicare options.