Working Past 65? The Company Plan Runs About $2,309 a Year, Medicare About $3,000 — and $5,500 With Medigap

Unless your employer has fewer than 20 employees, nothing forces you onto Medicare at 65. The workplace plan is usually cheaper — but Medicare is the one with no surprise bills, and one of the traps closes the day you sign up for Part A.

By Sean Anees Saifi · Capital Wealth · Published Wednesday, October 7, 2026 · Source: The Wall Street Journal, Monday, October 5, 2026, whose market figures are the Friday, October 2 close (Journal Report)

Key Points

Employers pick up about 84% of the cost of coverage, per KFF; the average employee share for single coverage is $1,440 a year plus $869 of deductibles and copays — about $2,309 all in.
Medicare Part B runs $202.90 a month, or $2,434.80 a year, and the average Part D drug plan $44 a month, so A, B and D together cost almost $3,000 a year on average.
Medicare pays only 80% of doctor bills and hospital coverage starts after a $1,736 deductible, so planners usually add a Medigap Plan G — about $217 a month for a 65-year-old — for a total just over $5,500.
What the extra buys: almost any doctor without asking permission, a $283 Part B deductible, and drug costs capped at $2,100 for the year. Workplace in-network maximums can legally reach $10,600 — though 72% of employees have limits of $3,000 or less.
The traps: the IRMAA surcharge above $109,000 of income (single) or $218,000 (couple) lifts Part B to $284.10–$689.90 a month per person; and enrolling in any part of Medicare — even just free Part A — ends HSA contributions.

$2,309

average workplace single plan, premiums plus out-of-pocket (KFF)

$3,000

almost — Medicare A, B and D, average annual cost

$5,500

just over — Medicare plus a Medigap Plan G at age 65

$689.90

top IRMAA Part B premium, per person per month

An older person in a cream sweater sorts through a tall, messy pile of opened envelopes and glossy mailers on a wooden kitchen table, with a coffee mug and reading glasses beside it in warm window light.

One planner calls the Medicare mail that arrives before 65 “the stack of confusion” — most of it is selling something you may not need yet.

In one line: If you’re still working at 65 the company plan is often cheaper than Medicare, but the comparison has to be redone every fall — and the HSA and IRMAA traps are set before you sign anything.

As 65 gets close, the mail changes: glossy envelopes, urgent fonts, offers for things you may not need yet. Stephen Maggard, a planner in Columbia, S.C., calls it “the stack of confusion,” and Gail MarksJarvis spends a page of Monday’s Investing Monthly report sorting it. The surprise for people still working at 65: unless your employer has fewer than 20 employees, nothing forces you onto Medicare. You can keep the company plan. Whether you should is a math problem with a couple of traps built in.

Start with the math. Employers pay about 84% of the cost of coverage on average, per KFF, so the typical employee share for single coverage is $1,440 a year — $120 a month — plus about $869 of deductibles and copays. Call it $2,309. Medicare’s menu: Part A (hospitals) is free and you can take it at 65 even while you stay on the work plan. Part B, which replaces your work insurance for doctors and labs, averages $202.90 a month, or $2,434.80 a year. Part D for drugs averages $44 a month. Together, almost $3,000. On the sticker, the company plan wins.

But Medicare alone pays only 80% of your doctor bills, and the hospital side doesn’t kick in until you’ve covered a $1,736 deductible, so planners usually add a Medigap Plan G — about $217 a month for a 65-year-old, per the Medicare Payment Advisory Commission. Now you’re at just over $5,500 a year. What that buys is the thing MarksJarvis keeps coming back to: no surprises. Any doctor or hospital that takes Medicare, no permission slips, and the only bills beyond premiums are a $283 Part B deductible and drug costs capped at $2,100 for the year. A workplace plan can’t legally charge more than $10,600 in network, and 72% of employees have caps of $3,000 or less — but step outside the network for a specialist and, as she puts it, the cost can be huge.

The traps

Three of them. First, income. Cross $109,000 as an individual or $218,000 as a couple and the IRMAA surcharge turns Part B into $284.10 to $689.90 a month for each of you, with up to $91 a month more on Part D. Second, a younger spouse: leave the company plan and she may lose her coverage years before she can start Medicare, and once you’re both enrolled, two sets of premiums can run past the $6,850 average a family pays at work. Third — the one that surprises almost everyone — enroll in any part of Medicare, even free Part A while you keep the work plan, and you can’t contribute to a health savings account anymore. The penalties cut the other way too: skip Part D without creditable drug coverage at work and the surcharge is for life, and you get eight months after leaving employer coverage to sign up.

Our read

This is Insurance and Health Costs (M11) with a Retirement (M10) hinge. The decision isn’t stay-or-go once; it’s annual, made every fall at open enrollment. Justin Henrich, a planner in Kalamazoo, Mich., describes the pattern we see too: the plan works, and works, and then “a year comes when it doesn’t any longer.” The cheaper plan is only cheaper until the year you actually use it — and that’s the year Medicare’s no-surprises math earns its premium.

The planning move is to run both columns every October while you’re still working — your actual premiums and out-of-pocket at work against Part B, Part D and a Medigap quote — and to look at your tax return before you enroll in anything, because IRMAA keys off income and a big Roth conversion or a sale can push a couple over $218,000 without anyone noticing. If you’re funding an HSA, decide the Part A question deliberately rather than letting a Social Security application make it for you. Nobody checks the roof during the storm; open enrollment is the dry afternoon. Bring the stack, and we’ll sort it with you.

What It Means For Your Portfolio

Hold — redo the Medicare math every fall, not once

No portfolio action — the piece names no companies and nothing in the books is touched; the position is a household one: compare the work plan to Medicare every open enrollment, and settle the HSA and IRMAA questions before enrolling in any part of Medicare.

General planning principles, not advice for anyone in particular. If you’re working past 65 at an employer with 20 or more employees, write down what the company plan actually cost you this year — premiums plus every deductible and copay — and set it beside Part B at $202.90 a month, Part D at about $44 and a Medigap Plan G quote. The cheaper number wins only if you also check whether your doctors, drugs and hospital are still in the work plan’s network.

Before you sign up for even free Part A, stop any HSA contributions and check whether your income is near the $109,000 single or $218,000 couple IRMAA lines; a planned Roth conversion or a property sale can be timed around them. Mark the eight-month enrollment window after you leave employer coverage so a lifetime penalty doesn’t sneak in.