If you’re still working at 65, and you’re eligible for Medicare, you may not have to sign up right away; however, we highly recommend you evaluate your situation as soon as you’re eligible. If you don’t follow the rules that allow you to postpone enrollment in Medicare, you may face significant financial penalties when you do enroll.
Selectively Enrolling in Medicare
Remember, Medicare is split into Part A and Part B. Together, this is the federal insurance program, also referred to as “Original Medicare.” If you’re receiving Social Security benefits prior to age 65, you’ll be enrolled in Medicare Part A and Part B, and will have to keep Part A, at a minimum.
While you may not have to enroll in Medicare while still working, you might want to enroll in at least Medicare Part A (which is premium-free) while postponing Part B, which includes outpatient care and has monthly premiums. However, if you are contributing to a Health Savings Account (HSA), you should consider delaying Medicare entirely.
You Can Safely Delay Medicare Part B Enrollment If:
- You’re enrolled in a health insurance plan through your current employer, or your spouse’s current employer, AND
- The employer has 20 or more employees.
If you meet the two conditions, you can delay enrolling in Medicare for up to eight months after you (or your spouse, if you’re receiving coverage through them) have stopped working at the job that provides your current insurance.
You Should Sign Up Right Away If:
- You get health insurance from an employer with fewer than 20 employees;
- You’re enrolled in individual health insurance, like an Obamacare plan;
- You rely on a Christian health ministry, short-term insurance, or have no insurance at all;
- You’re using COBRA, retiree insurance, or health insurance from a previous job; or
- You have VA health coverage.
If you choose to delay Medicare, you’ll want to consider the financial implications of doing so first since most Medicare beneficiaries are satisfied with their coverage and healthcare costs. If you didn’t sign up for Medicare when first eligible, you may face possible late enrollment penalties.
Instead of delaying enrollment, you could opt-out of Medicare forever; however, that means you would also have to forego Social Security benefit. If you really want to do this, you would have to speak with Social Security.
You Can Get Additional Coverage After You Enroll in Medicare
There is additional Medicare coverage available that can provide additional benefits and help control your costs.
- Part D prescription drug coverage: These plans help to pay for prescription medications.
- Medicare Supplement Insurance, also called a Medigap policy: This helps cover Part A and Part B out-of-pocket costs. Anyone can get a policy within six months of Part B enrollment, no matter the pre-existing medical conditions.
- A Medicare Advantage plan: This is Medicare administered by private insurance companies. These plans, also known as Part C, provide Part A and Part B services and can include drug coverage and other benefits.
Medicare Supplement Insurance and Medicare Advantage plans require both Part A and Part B enrollment. A Part D prescription drug plan requires either Part A or Part B.