Should I Give Up My Job at 68 for Grad School? Here’s How to Handle Health Insurance

Dear Help Me Retire,

My wife and I are 68. We only have Medicare Part A. I work for a state government and have excellent insurance benefits for the two of us. I’ve been accepted to graduate school and will quit my job. I don’t have enough years to retire or get medical coverage through the state after I quit work.

I don’t understand the kind of medical coverage a person must carry to maintain eligibility for Medicare later. I doubt a medical-insurance plan purchased through my future alma mater would be as comprehensive as Medicare requires. But I’m only speculating.

After I graduate, I will return to work at the state. There is a one-month gap after graduation before I can resume working for the state. I’ll need coverage during that time. I’d like to study about oceans and volcanoes at a school with easy access to them.

Once I have enough longevity with the state to retire, I’ll do that and obtain retiree medical benefits. I’ll probably return to school, enrolling at the University of Hawaii, and possibly living on campus to keep costs down.

Studious State Worker

Related: I’m 48 and want to retire next year. Do I have enough money to last me until I’m 98?

Dear Studious,

First, let me say that these major life events sound very exciting. Taking the time after decades of work to study about oceans and volcanoes while you pursue a graduate degree — that is the stuff of dreams.

Health scares and a lack of insurance, however, are the stuff of nightmares, so I applaud you for being conscientious about your options before you step onto campus. This can be a complicated situation.

Once you leave your job, you’ll have a special enrollment period (that lasts eight months) to sign up for Medicare Part B. If you don’t sign up in a timely manner, you’ll have a penalty to pay. Part D’s special enrollment period is two months.

For those unaware, there is often a penalty for late enrollment of Part B and Part D — unless the individual has “creditable coverage,” such as through an employer.

Do you have questions about retirement, Social Security, where to live or how to afford it at all? We want to hear from you. Join the conversation in our Facebook community: Retire Better with The News Pulse .

Universities can offer creditable coverage, which would allow you to continue without any other parts of Medicare. This is not a blanket statement, though — some do, some don’t. I would suggest you reach out to student affairs or a human-resources official to help you understand what is and is not offered to you with a student-health plan.  Then you should compare it to what you’d get with Medicare.

Now, you might not want to hear this, but going with Medicare after leaving your job may be the easiest option. Some retiree insurance plans may still require you to have both Parts A and B, for instance. You also have that gap period when you go back to work where you’ll need coverage.

Those are two arguments for considering Medicare. That, and we don’t know what the future holds. “The future of his employee benefits is uncertain, and it would probably be a good idea to get established with a primary care physician/family practice to be sure of continuity,” said John Power, a certified financial planner.

“The college may have some offering, but it may cost as much as the Medicare options,” he added. “Look at that for sure, but I’d consider a supplement to traditional Medicare as the best choice.”

You may also want to consider Medigap or Medicare Advantage. “Retiree coverage might not pay your medical costs during any period of time when you were eligible for Medicare but didn’t sign up for it,” according to Medicare.gov .

Your wife should consider the same steps, if she won’t have any backup options when you leave your employer.

Still, if you enroll in Part B and then decide you don’t need or want it anymore, you will need to follow some clear steps. There are two ways to drop coverage, according to Medicare.gov : Contact the Social Security Administration or if you’ve gotten a welcome packet recently, follow the instructions it lays out and send your card back. “If you keep the card, you agree to keep Part B, and you’ll start paying the monthly Part B premium,” the site says.

Getting this in order may seem like a headache, but you’re on what sounds like a really exciting journey — good luck.

By submitting your story to Dow Jones & Co., the publisher of The News Pulse, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Have a question about your own retirement savings? Email us at HelpMeRetire@The News Pulse