Jeffrey Wade
Turning 65 is a significant milestone, as it may be the first time you're eligible for Medicare coverage options. Your options will depend on the type of insurance you currently have and whether you plan to keep working past 65. If you have job-based insurance, you may be able to delay Medicare enrollment, but you may want to enroll in Medicare Part A (Hospital Insurance) as soon as you are eligible since it is premium-free for most beneficiaries. If you have Marketplace coverage, you should sign up for Medicare when you turn 65.
| Characteristics | Values |
|---|---|
| Medicare Part A | Hospital Insurance |
| Medicare Part B | Medical Insurance |
| Medicare Part D | Prescription Drug Coverage |
| Initial Enrollment Period (IEP) | Begins three months before your 65th birthday and extends for seven months |
| Special Enrollment Period (SEP) | An eight-month period to sign up for Medicare when you leave your job after turning 65 |
| COBRA coverage | Rules may vary, and it will probably end once you sign up for Medicare |
| Job-based insurance | Allows you to delay Medicare enrollment |
| Late enrollment penalty | May have to pay a penalty if you sign up for Medicare later |
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What You'll Learn
You can keep employer-sponsored insurance
If you have employer-sponsored health insurance, you may be able to keep it when you turn 65. However, there are a few things to keep in mind. Firstly, you should contact your employer's benefits representative to confirm whether they will continue your coverage after you turn 65. It is important to make this confirmation as soon as possible to avoid any gaps in your coverage.
If your employer confirms that your coverage will continue, you may want to consider enrolling in Medicare Part A (Hospital Insurance) as soon as you are eligible, which is usually three months before your 65th birthday. Most people are eligible for Part A without paying a premium, and it can help reduce your out-of-pocket expenses. You can then delay signing up for Medicare Part B (Medical Insurance) until you or your spouse retire, as enrolling in Part B requires paying a premium. However, it is essential to check with Social Security or Medicare to confirm that you will not face a late enrollment penalty for delaying Part B.
If your employer-sponsored insurance is from an employer with 20 or more employees, it is likely your primary insurance, and Medicare will be secondary. In this case, you may choose to delay enrolling in Medicare Part B since your job-based insurance is the primary payer. However, if your employer has fewer than 20 employees, Medicare is likely your primary insurance, and delaying enrollment may result in higher costs for your care.
Additionally, if you have retiree coverage from a previous job, it may not pay for your health services if you don't have both Medicare Part A and Part B. Therefore, it is crucial to ask your benefits administrator how your retiree coverage works with Medicare before making any decisions. Remember, you have an eight-month Special Enrollment Period (SEP) to sign up for Medicare Part B after losing your current work coverage, so you have some time to make an informed decision.
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You can sign up for Medicare
In the United States, Medicare is the federal health insurance program for people aged 65 and over. You can sign up for Medicare when you turn 65 to avoid gaps in coverage and a monthly Part B late enrollment penalty.
Signing up for Medicare
If you are approaching your 65th birthday, you can start signing up for Medicare three months before your birthday. You can sign up for Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) through Social Security. You can enroll online, or by filling out forms. Your coverage will start the month after your completed form has been processed.
Keeping your current insurance
If you are still working when you turn 65, Medicare works a little differently. If you have employer-sponsored health insurance, you may be able to keep your insurance until you retire. You will need to contact your employer's benefits representative to find out whether they will continue your coverage. If you don't have to pay a premium for Part A, you can choose to sign up when you turn 65, or anytime later. You can also wait until you lose your health insurance to sign up for Part B without paying a late enrollment penalty.
COBRA coverage
If you have COBRA coverage, this will probably end once you sign up for Medicare. However, don't wait until your COBRA coverage ends to sign up for Part B. COBRA coverage does not extend your limited time to sign up for Medicare.
Marketplace coverage
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. Your Marketplace coverage will not be canceled automatically, but if you receive premium tax credits to help pay for your Marketplace plan premium, your eligibility for these tax credits will end when your Medicare Part A coverage begins.
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You may get auto-enrolled in Medicare
If you are already receiving benefits from Social Security or the Railroad Retirement Board when you turn 65, you will be automatically enrolled in Medicare Parts A and B. This also applies if you are younger than 65 and have been receiving disability benefits for 24 months, or if you have Lou Gehrig's disease (Amyotrophic Lateral Sclerosis). If you are already receiving Medicare Part A and are part of the government Low-Income Subsidy program because you qualify for Medicare and Medicaid, you will also be auto-enrolled.
If you are automatically enrolled, you will receive a welcome package in the mail from Medicare. This will include a letter, a booklet, and a Medicare card. The booklet explains the important decisions you need to make before your Medicare coverage starts.
If you are covered under an employer plan when you turn 65, you may be able to keep your insurance until you (or your spouse) retire(s). However, it is important to check with your employer's benefits representative to confirm whether your coverage will continue. If you have retiree coverage from a previous job, it may not pay for your health services if you don't have both Medicare Part A and Part B. Therefore, it is recommended to sign up for Medicare when you turn 65 to avoid a monthly Part B late enrollment 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. Your Marketplace coverage will not be automatically cancelled when you sign up for Medicare, but you will no longer be eligible for premium tax credits to help pay for your Marketplace plan premium.
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You can delay Medicare enrolment
If you or your spouse are still working and have health insurance coverage through a large group employer or union, or you want to keep your health savings account (HSA), you may defer Medicare coverage. It is important to note that Medicare isn't mandatory. However, if you lose your coverage, failure to sign up for Medicare within a specific time frame may result in long-lasting or even permanent penalties.
If you have employer-sponsored health insurance, you may be able to keep your insurance until you (or your spouse) retire(s). 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 (i.e. three months before your 65th birthday), 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) retire(s). 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. You can delay your Part B enrolment to avoid paying the premium, and when you lose your employer or other coverage, you may be eligible for a Special Enrollment Period to enrol in Medicare Part B without a penalty.
If you decide to drop your Marketplace coverage when you become eligible for Medicare, make sure your Medicare coverage has started before you cancel your Marketplace plan so that you avoid any gaps in coverage.
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You may have to pay a late penalty
If you don't sign up for Medicare coverage during your Initial Enrollment Period, you may have to pay a late enrollment penalty. This penalty is not a one-time fee but an extra amount added to your monthly premium for as long as you have that type of coverage.
The Part A penalty is different and depends on how long you wait to sign up. If you have to buy Part A and you don't buy it when you're first eligible for Medicare, your monthly premium may increase by 10%. You'll have to pay the penalty for twice the number of years you didn't sign up.
For Part B, if you waited 2 full years (24 months) to sign up and didn't qualify for a Special Enrollment Period, you'll have to pay a 20% late enrollment penalty (10% for each full year that you could have signed up) plus the standard Part B monthly premium.
For Part D, if you don't sign up when you're first eligible and don't have creditable drug coverage, you'll have to pay a late enrollment penalty. The penalty is equal to 1% of the national average premium multiplied by the number of months you did not have creditable drug coverage.
It's important to note that if you or your spouse are still working and have group health insurance, you may be able to wait to sign up for Medicare without paying a late enrollment penalty. You can sign up for Part B after you or your spouse stop working or lose your health insurance without incurring a penalty.
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Frequently asked questions
It depends on the type of insurance you have. If you have job-based insurance, you may be able to delay Medicare enrollment, but you may want to enroll depending on whether your job-based insurance is the primary or secondary payer. If you have insurance through a Marketplace plan, you should sign up for Medicare when you turn 65.
Your Initial Medicare Enrollment Period (IEP) begins three months before your 65th birthday and ends three months after the month that you turn 65. You will want to be on top of this deadline to avoid monthly late enrollment penalties.
If you are already receiving Social Security benefits or Railroad Retirement Board benefits, you will be automatically enrolled in Medicare Parts A and B. If not, you will need to manually enroll in Medicare by applying online, over the phone, or in person at your local Social Security office.
Medicare Part A (Hospital Insurance) helps cover inpatient hospital stays, skilled nursing facility care, hospice care, and some home healthcare services. Medicare Part B (Medical Insurance) covers medically necessary services, including doctor visits, preventive care, outpatient care, and durable medical equipment.
