Looking Forward/Looking Backward
Across the Retirement Line
This column is intended for MIT faculty who have already retired or are contemplating such a decision in the near future. The purpose is to provide some practical advice about health care at home and abroad, income sources, taxes, insurance decisions, and numerous other matters that may be helpful in preparing for the transition from active service (teaching, research, advising) to retirement. The goal is to help prepare for the new adventure that awaits you following the transition. The inspiration for writing such a column came from discussions that I had with colleagues during my own final months as an active MIT faculty member, many of whom were themselves contemplating retirement, and wondered how best to prepare for the many decisions they had to make.
In this issue of the FNL I address health insurance post-retirement.
MIT faculty have the benefit of a terrific health plan by any standard, both in terms of low cost as well as access to the best medical facilities in the country. Whether or not you remain at your current residence following retirement, you may keep all your current doctors, but some services that are currently covered will not be. An example is the annual eye examination for prescription lenses. MIT’s Benefits Office will supply you with detailed information, but a brief summary of key components is the following.
Medicare will become your primary health insurance if you are age 65 or older. You can enroll in Medicare after your 65th birthday and are eligible for a Social Security benefit. You may already have Part A and with retirement you must enroll in Part B. Part A covers hospital, skilled nursing facility, nursing home, and home health care as well as hospice. Medicare will not cover all your medical bills, so MIT has arranged for you to purchase a Blue Cross Blue Shield plan called Medex or a Tufts Medicare Preferred Plan to bridge the financial gap. Depending on your years of service, its cost will vary from nothing (for example, born before July 1, 1940 with at least 10 years of retirement-plan-eligible service) to over $2,500 per year. This fee will be deducted from your MIT Pension monthly payments (more on this topic in a future column). If you purchase an MIT-sponsored retiree health plan, you will be enrolled in a Medicare Part D prescription drug plan administered through Express Scripts. There is no cost to Part A. The cost of Medicare Parts B and D can be ~$150 – $500 per month depending on your income as reported on your Federal Income Tax return. Dental insurance can be purchased. You can continue your Delta Dental insurance for the first 18 months following retirement at COBRA premium rates that are lower than the regular Retiree Dental Insurance rates, which you can switch to subsequently.
The MIT Benefits Office will help you with the enrollments described in the previous paragraph. Enrollment in Part B of Medicare is best done by traveling directly to the Cambridge Social Security office, located at 10 Fawcett Street, First Floor, Cambridge, to deliver your completed forms. Arriving mid-day may help to avoid long lines.
If you purchased a long-term care policy from one of the suppliers that MIT offered, such as John Hancock, it will continue into retirement. You will no longer be on salary from MIT if you fully retire, so the premiums will have to be paid directly to the insurance company.
Finally, you will need to provide for medical insurance when traveling abroad because the International SOS insurance program ends when you retire. Medicare does not pay for medical expenses incurred outside of the United States. In general, neither does the Medex plan (see above). So, it is best to purchase international health care insurance before taking a trip outside of the U.S. However, there are some instances where you may be covered for essential medical care. Save your receipts for doctor bills, lab tests, and prescription drugs. The MIT Benefits Office will help you prepare the forms, although you should not expect a speedy recovery of your money.