If your age in the United States is approaching 65, you've probably thought about Medicare, a federal program that provides health care coverage for seniors and people with disabilities. You have a few months before your 65th birthday to apply for Medicare, but do you have to do so? That depends on your current health insurance and employer.
Most Americans must enroll in Medicare or Medicare Advantage when they turn 65, and some will pay a significant penalty for late enrollment. But if you are 65 or older and still working under employer-provided health insurance, you may not be required to enroll.
Learn more about how the Medicare program works, what your options are, and what penalties you may face for not enrolling in the program on time after age 65. For further reading, learn why the Inflation Reduction Act makes Medicare more powerful.
How does the Medicare program work?
The original Medicare program has two main parts - Part A for hospital insurance and Part B for general health insurance - along with additional private insurance for prescription drugs.
Part A . All Americans (and their spouses) who have had Medicare taxes deducted from their paychecks for 40 calendar quarters (10 years) get Part A coverage for free. If you don't qualify for free Part A coverage, you can buy it for $278 a month in 2024 if you paid Medicare taxes for more than 30 calendar quarters, or $505 a month if you didn't.
Part A covers surgeries, stays in hospitals, skilled nursing facilities and hospice care, inpatient rehabilitation, lab tests and some home health care.
Part B . All Medicare enrollees must pay a monthly premium that starts at $174.70 in 2024, but increases as your income increases. This cost is deducted from your Social Security payment or billed every three months. Part B is optional if you get Part A for free, but if you have to pay for Part A, you will also have to enroll in Part B.
Part B covers physician and facility services, outpatient care, medical equipment, preventive services, and other health and wellness services not covered by Part A.
Part C . Medicare Advantage plans (also known as Part C plans) are private insurance plans that must offer coverage at least equivalent to the original Medicare Part A and Part B plans, and often include Part D benefits as well (see below).
Part D . Medicare Part D is a private insurance supplement to Medicare that provides prescription drug coverage. You must be enrolled in both Parts A and B to get a Part D plan.
Medigap plans are supplemental private insurance plans that work together with Original Medicare Part A and Part B plans to provide additional benefits or coverage.
How do I enroll in Medicare when I turn 65?
Medicare enrollment is handled by the Social Security Administration, and you can apply for Medicare within seven months of your 65th birthday - three months before your birthday, on your birthday, and three months after your birthday.
After the initial enrollment period, you can enroll in Part A during the general enrollment period - January 1 through March 31 - without a penalty if you qualify for free insurance. If you need to pay Part A premiums, you will pay a late enrollment penalty (see below).
If you don't enroll in Part B during the initial enrollment period, you will also have to wait for the general enrollment period from January through March, and you will pay a penalty that will apply as long as you are enrolled in the Part B program. Enrolling in Medicare during the general enrollment period also means that your coverage will not start until July 1.
Americans who start receiving benefits from Social Security or the Railroad Retirement Board at least four months before turning 65 will be automatically enrolled in Medicare Part A and Part B on the first day of the month they turn 65. If you want to delay enrollment in Part B, you will need to contact Social Security before your coverage begins.
If I am 65 or older and I get health insurance at work, do I need to enroll in Medicare?
No. If you continue to work, your company employs more than 20 people, and you have workplace health insurance, you do not need to enroll in Medicare until your existing health insurance expires. When you stop working or your employer terminates your group insurance plan, you have eight months to enroll in Medicare, regardless of whether you have COBRA or another health insurance plan.
If you are enrolled in Medicare and still have insurance at work, your insurance at work will pay first and Medicare will pay second.
If you work for a company with fewer than 20 employees, you should contact the company's human resources department to learn about the specifics of the health insurance program. You can probably delay enrolling in Medicare, but some employers require people age 65 and older to enroll in Medicare in order to receive company health insurance benefits.
In smaller companies with fewer employees, Medicare pays first and workplace insurance second.
If you turn 65 and don't have health insurance at work, you'll need to enroll in Medicare during the seven-month initial enrollment period or pay a penalty that will increase the cost of your premium.
By answering a few quick questions on the official Medicare website, you can determine if and when you should join Medicare. If you want even more details, a fact sheet from the Center for Medicare and Medicaid Services describes many possible scenarios for those who are deciding whether or not to join Medicare at age 65.
If you want to completely opt out of Medicare Part A, this is possible, but you will have to completely opt out of Social Security benefits and repay any benefits you have already received.
What are the penalties for late enrollment in Medicare?
Penalties for not enrolling in Medicare on time are in the form of an increase in your monthly Medicare premiums. If you are eligible for free Medicare Part A, there is no late enrollment penalty, but you will have to wait until the January through March general enrollment period to join the program.
If you have to pay for Part A and join after your initial enrollment period, you will pay 10% more in monthly premiums for twice as many years as you delayed enrollment . For example, if you join Medicare four years late, you will pay an additional 10% monthly for Part A for eight years.
If you decide to enroll in Medicare Part B late, you can only do so during the general enrollment period and you will pay an extra 10% per month for each year you delayed enrollment. If you decide to enroll in Part B late, you can only do so during the general enrollment period and will pay an extra 10% per month for each year you delayed en rollment . The penalty for late enrollment in Part B is permanent - you will pay extra premiums each month for as long as you get Medicare benefits.
In Part D, you can delay enrollment if you already have prescription drug coverage, but penalties will start accruing after 63 days without coverage. You will pay 1% more in monthly premiums for each month you delay enrolling in the Part D program.
When you join a Medicare plan, you will get a notice explaining the possible penalties. If you disagree with the penalties, you can file an appeal within 60 days from the date on the notice.
Can I change my Medicare plan after I enroll?
Yes. During the Medicare Open Enrollment Period (OEP), also called the Annual Election Period (AEP), you can change from a Medicare Part A and Part B plan to a Part C plan or vice versa. You can also change to a Part C plan. Finally, you can join, drop, or switch to a Part D prescription drug plan. The open enrollment period runs each year from October 15 to December 7, and your new coverage begins January 1.
You can also make changes during Special Enrollment Periods (SPEs), which are after certain life events, such as if you move or lose other coverage. You have the option to change to a different plan if your current plan changes its contract with Medicare. You can enroll in a new plan within 60 days after the life event.