Haris Ashley
If you're turning 65, you may be wondering how your medical insurance will be affected. Medicare is health insurance for people aged 65 and over, and there are a few ways to get coverage. If you're already receiving Social Security benefits, you'll be automatically enrolled in Medicare Parts A and B. If not, you'll need to sign up, and there are different rules depending on whether you have employer-sponsored insurance or a Marketplace plan. You may be able to keep your current insurance, but there are potential penalties for late enrollment, so it's important to understand your options.
| Characteristics | Values |
|---|---|
| Medicare eligibility | Individuals aged 65 or older |
| Medicare coverage | Two main ways: Original Medicare and Medicare Advantage |
| Medicare Parts | Part A (Hospital Insurance) and Part B (Medical Insurance) |
| Medicare Part A eligibility | Entitlement based on earnings or those of a spouse, parent, or child |
| Medicare Part A premium-free eligibility | Eligibility based on a specified number of quarters of payroll tax coverage (QCs) |
| Medicare Part A application | Automatic enrollment for individuals receiving Social Security or RRB benefits 4 months prior to turning 65 |
| Medicare Part A retroactive coverage | Provided if the application is filed within 6 months of turning 65 |
| Medicare Part B | Medical Insurance with a late enrollment penalty for delay |
| Medicare and employer-sponsored insurance | Individuals may keep employer insurance until retirement with possible delays in Medicare Part B enrollment |
| Medicare and Marketplace coverage | Marketplace coverage continues after Medicare enrollment but financial assistance ends |
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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, as well as some people under 65 with certain disabilities or conditions.
Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) are the two components of Original Medicare. 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. Part A helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care. Most people pay a monthly premium for Part B, and the exact premium depends on your income level.
If you or your spouse are still working when you turn 65, you may be able to delay signing up for Part B without paying a late enrollment penalty. You can wait until you or your spouse stop working (or lose your health insurance) to sign up for Part B. Once you stop working or lose your insurance, you have an 8-month Special Enrollment Period (SEP) to sign up for Part B or add it to existing Part A coverage.
If you have employer-sponsored health insurance, you may want to delay signing up for Part B until you or your spouse retire. However, it is recommended to check with Social Security or Medicare to confirm that you will not face a late enrollment penalty. If you do not sign up for Part B at the appropriate time, you may face a late enrollment penalty that will increase your Part B premium by 10% of the standard monthly premium for each 12-month period that you delayed enrollment.
If you decide to drop your Marketplace coverage when becoming eligible for Medicare, ensure that your Medicare coverage has started before cancelling your Marketplace plan to avoid any gaps.
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Late enrollment penalties
For Medicare Part A, if you don't sign up during your Initial Enrollment Period (IEP), you will be subject to a late enrollment penalty of 10% of the cost of your monthly premium. This penalty will be paid every month for twice the number of years you were eligible but didn't sign up. For example, if you were eligible for Part A for two years but didn't enrol, you'll have to pay the higher premium for four years.
For Medicare Part B, you will be required to pay a late enrollment penalty of 10% for each 12-month period you delay signing up. This penalty will be added to each monthly payment for the rest of your life.
If you are working past 65 and receiving healthcare coverage, you may be able to delay enrolling in Medicare without incurring penalties. Additionally, if you have creditable coverage, such as through your employer, you can delay enrolling in Part A without being penalized.
Medicare Part C (Medicare Advantage) does not have a late enrollment penalty, and you can switch to this type of plan during certain enrollment periods.
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Employer-sponsored insurance
If you have employer-sponsored health insurance, you may be able to keep it when you turn 65. However, you should consult your employer's benefits representative to confirm whether your coverage will continue.
If your employer has 20 or more employees, they are required to continue offering you health insurance, and you may be able to delay enrolling in Medicare Part B until you retire. If you have retiree coverage from a previous job, it may not pay for your health services if you don't have Medicare Part A (Hospital Insurance) and Part B (Medical Insurance).
If your employer has fewer than 20 employees, they may require you to enrol in Medicare Parts A and B 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.
If you decide to delay enrolling in Medicare, you should be aware of the potential risks and costs. Firstly, some private insurers may reduce or stop paying for services once you are eligible for Medicare. Secondly, if you delay enrolling in Medicare Part B, you may incur late enrollment penalties. To avoid these penalties, you should sign up for Medicare during your Initial Enrollment Period (IEP), which lasts for seven months: the three months before, the month of, and the three months after your 65th birthday.
If you lose your employer-sponsored insurance after turning 65, you will have a Special Enrollment Period (SEP) of up to eight months to enroll in Medicare Part B. During this period, you will need to provide written proof of creditable drug coverage to avoid Part D penalties.
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Marketplace coverage
If you have Marketplace coverage when you turn 65, you should sign up for Medicare to avoid a delay in coverage and the possibility of a late enrollment penalty. You can start signing up for Medicare three months before your 65th birthday. Your Marketplace coverage will not be cancelled automatically when you sign up for Medicare, so make sure you notify your Marketplace plan that you now qualify for Medicare coverage. You can choose to keep your Marketplace coverage and Medicare, but you will have to pay the full price for your Marketplace plan, and Medicare will be the primary payer. You will also no longer qualify for savings on your Marketplace plan, such as premium tax credits. If you have to pay a premium for Medicare Part A, you can choose whether you want to have coverage through Medicare or the Marketplace.
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. You can report a Medicare start date on your application up to three months before Medicare starts. After you submit your application update, make sure you confirm the plan for other members of your household who need to keep their Marketplace coverage.
If you have employer-sponsored health insurance through either 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. You may want to delay signing up for Medicare Part B until you or your spouse retires, but check with Social Security or Medicare to confirm that you will not face a late enrollment penalty.
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Medicare Advantage
If you are in the US and are about to turn 65, you may be automatically enrolled in Medicare Parts A and B, depending on your current insurance provider. If you are receiving insurance through your employer or your spouse's employer, you may be able to keep your insurance until you or your spouse retire. However, it is important to check with your employer whether they will continue your coverage when you turn 65.
If you decide to stick with your current insurance, you may want to consider enrolling in Medicare Part A, as it is premium-free for most beneficiaries. You can also delay signing up for Part B until your retirement, but it is recommended to check with Social Security or Medicare to confirm that you will not face a late enrollment penalty.
If you decide to switch to Medicare, there are several types of plans to choose from, including Medicare Advantage Plans (Part C). Medicare Advantage Plans are offered by Medicare-approved private companies and most include drug coverage (Part D). Before joining a Medicare Advantage Plan, it is important to talk to your employer, union, or benefits administrator about their rules, as joining may cause you to lose your employer or union coverage.
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Frequently asked questions
Medicare is health insurance for people 65 or older.
It depends on how you are receiving your current insurance. If you are receiving employer-sponsored health insurance, you may be able to keep your insurance until you retire. You will need to contact your employer to find out.
Yes, there may be. If you do not sign up for Part B at the appropriate time, you may face a late enrollment penalty that will increase your Part B premium by 10% of the standard monthly premium for each 12-month period that you delayed enrollment.
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 for this coverage.
If you are receiving Social Security benefits at least four months before turning 65, you will be automatically enrolled in both Medicare Part A and Part B. Otherwise, you will need to contact the Social Security Administration to file an application for Medicare.
