Haris Ashley
If you are over 65 and wondering about your options for medical insurance, there are a few things to consider. Firstly, if you are employed, you may be able to keep your existing insurance, but it is important to check with your employer if this coverage will continue. For those with Medicare Part A, it is recommended to enroll as soon as possible, as it is premium-free for most beneficiaries and can help reduce out-of-pocket expenses. If you are not eligible for premium-free Medicare, you can purchase health insurance coverage in the Marketplace, where you may be eligible for premium tax credits if your income meets certain criteria. Additionally, if you have retiree coverage, you may want to explore your options for Medicare Parts A and B, as well as any potential penalties for late enrollment.
| Characteristics | Values |
|---|---|
| Medicare Part A | Available to most individuals at 65 without a premium |
| Medicare Part B | Requires a premium |
| Medicare Part A and B | Sign up when first eligible to avoid late enrollment penalties |
| Medicare Part A and B | Individuals with job-based insurance may be able to delay signing up until retirement |
| Medicare Part A and B | Individuals with lower incomes may be eligible for premium tax credits |
| Marketplace coverage | Does not end automatically when signing up for Medicare |
| Marketplace coverage | Individuals with Medicare Part A are not eligible for premium tax credits |
| Marketplace coverage | Individuals with Medicare Part A will have to pay the full price for Marketplace coverage |
| Marketplace coverage | Individuals with Medicare will have benefits paid by Medicare first |
| FEHB coverage | Not affected by Medicare enrollment |
| FEHB coverage | Reduced costs when combined with Medicare |
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What You'll Learn
Medicare Part A and Part B
Medicare is federal health insurance for anyone aged 65 and older, and some people under 65 with certain disabilities or conditions. Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) are available to individuals who are aged 65 or above. You can sign up for Parts A and B, or Part A only.
Part A covers inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care. Most people get Part A for free, but some have to pay a premium for this coverage. To be eligible for premium-free Part A, an individual must be entitled to receive Medicare based on their own earnings or those of a spouse, parent, or child. To receive premium-free Part A, the worker must have a specified number of quarters of coverage (QCs) and file an application for Social Security or Railroad Retirement Board (RRB) benefits. You can sign up for Part A as soon as you are eligible, i.e., three months before turning 65.
Most people pay a monthly premium for Part B. The exact premium depends on your income level. You can delay signing up for Part B until you retire if you are covered under an employer plan. However, it is a good idea to check with Social Security or Medicare to confirm that you will not face a late enrollment penalty. If you sign up later, you may have to pay a penalty.
If you have coverage through a Marketplace plan, you should sign up for Medicare when you turn 65 and notify your Marketplace plan that you now qualify for Medicare coverage. You can start signing up for Medicare three months before your 65th birthday.
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Marketplace plans
If you have coverage through a Marketplace plan and turn 65, you should sign up for Medicare and notify your Marketplace plan that you now qualify for Medicare coverage. If you have retiree coverage and want to buy a Marketplace plan, you can do so, but you can't get premium tax credits and other savings based on your income. If you are enrolled in retiree coverage, you can't get premium tax credits. However, if you are eligible but not enrolled, you may qualify for premium tax credits and lower out-of-pocket costs based on your household size and income.
If you are receiving employer-sponsored health insurance through your or your spouse's job when you turn 65, you may be able to keep your insurance until you or your spouse retires. You will need to contact your employer's benefits representative to find out whether they will continue your coverage when you turn 65. Since Medicare Part A is premium-free for most beneficiaries, you may want to enrol in Part A as soon as you are eligible, even if you will continue to receive employer-sponsored insurance. If you are covered under an employer plan, you may want to delay signing up for Part B until you or your spouse retires. However, it is a good idea to check with Social Security or Medicare to confirm that you will not face a penalty for late enrolment.
If you are 65 or older and not entitled to premium-free Medicare, you can purchase health insurance coverage in the Marketplace (except if you are an undocumented immigrant). If you sign up for a Marketplace plan, you will be eligible for premium tax credits to make the coverage more affordable if your income is at least 100% of the federal poverty level ($15,060 for an individual in 2025). You can start signing up for Medicare three months before your 65th birthday.
If you decide to drop your Marketplace coverage when you become eligible for Medicare, ensure your Medicare coverage has started before you cancel your Marketplace plan so that you avoid any gaps in coverage. You can get a Marketplace plan to cover you before your Medicare begins and then cancel the Marketplace plan once your Medicare coverage starts.
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Employer-sponsored insurance
If you are 65 or older and have employer-sponsored health insurance through your or your spouse's job, you may be able to keep your insurance until you or your spouse retires. However, it is important to contact your employer's benefits representative to confirm whether they will continue your coverage.
If you work for a small employer, they may require you to get Medicare when you turn 65. In this case, Medicare will become your primary insurer, and your employer can choose to cancel your workplace plan or keep it as a secondary payer.
Even if you plan to continue with your employer-sponsored insurance, it is recommended to enrol in Medicare Part A as soon as you are eligible (i.e., three months before turning 65) since it is premium-free for most beneficiaries. However, you may want to delay signing up for Part B until your retirement, provided you confirm with Social Security or Medicare that you will not face a late enrolment penalty.
If you have retiree insurance from a previous job, it may not pay for your health services unless you have both Medicare Part A and Part B. Therefore, it is important to ask your benefits administrator how your retiree coverage works with Medicare.
Additionally, if you have a Marketplace plan, you should notify them when you qualify for Medicare coverage. Your Marketplace coverage will not be automatically cancelled, but your eligibility for premium tax credits will end when your Medicare Part A coverage begins.
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Late enrollment penalties
The late enrollment penalty amount is calculated as 10% of the monthly premium cost for Medicare Part A. This additional cost is then paid every month for twice the number of years the individual was eligible but did not sign up. For instance, if an individual waits for a year after being eligible to enroll, they will pay the penalty amount for two years. This penalty is not a one-time fee but is usually charged for as long as the individual has that type of coverage, which often results in a lifetime penalty.
For Medicare Part B, the late enrollment penalty is included in the monthly premium. This penalty is incurred if an individual does not sign up during the Initial Enrollment Period or a Special Enrollment Period. A Special Enrollment Period is applicable to those who have health insurance through their employer, union, or spouse. However, it is important to note that the Special Enrollment Period only applies to Medicare Part B and not Part A.
In the case of Medicare Part D, a late enrollment penalty is added to the monthly premium if an individual waits past the three-month window to enroll after their Medicare Parts A and B become active. This fee is calculated as 1% of the average monthly prescription premium cost, multiplied by the number of months the individual was late in enrolling.
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Medicaid
If you are over 65, you are likely eligible for Medicare, a federal health insurance program that covers a wide range of services to keep you healthy as you age. While the minimum enrollment age is generally 65, the program also covers younger people with certain disabilities.
Medicare isn't free, and many people with low incomes can't afford its out-of-pocket costs. This is where Medicaid comes in. Medicaid provides health coverage to 7.2 million low-income seniors who are also enrolled in Medicare. In total, 12 million people are enrolled in both Medicaid and Medicare, composing more than 15% of all Medicaid enrollees.
The Medicare Savings Programs provide Medicaid coverage of Medicare premiums and, in most cases, cost-sharing to Medicare beneficiaries with limited financial resources. Beyond this "mandatory" eligibility pathway, there are optional Medicaid eligibility pathways that states may choose to offer for people who are ages 65 and older, including options to expand coverage beyond what is required under federal law to low-income seniors.
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Frequently asked questions
If you are over 65 and don't have insurance, you can use the Health Insurance Marketplace to buy a plan. You can also apply for Medicare Part A and Part B coverage, although you will have to pay a premium for both.
It depends on how you are receiving your current insurance. If you are receiving employer-sponsored health insurance through your job when you turn 65, you may be able to keep your insurance until you retire. However, it is recommended that you sign up for Medicare when you first become eligible to avoid a late enrollment penalty.
Medicare Part A is hospital insurance, while Part B is medical insurance. Most people get Part A for free, but some have to pay a premium. Everyone is charged a premium for Part B coverage.
