You may not need to enroll in Medicare when you turn 65

With age comes experience, but also challenges. You’ll need to find ways to keep your body healthy and your brain healthy. And as you plan for retirement, you’ll need to consider all of your health insurance options.

Whether you’re looking to retire or you’re starting to miss the structure and stability of your day-to-day job, you’re probably looking for MedicareMedicare is an option that provides health care coverage to Americans age 65 and older, as well as some younger people with disabilities — a total of more than 65 million Americans, for about $905 billion per year.

Most Americans will sign up for a Medicare or a Medicare Advantage plan when they turn 65, and some pay a significant penalty for late enrollment. But if you are 65 or older and still have an employer-provided health plan, you may not need to enroll.

Learn how Medicare works, what your options are, and what penalties you may face for enrolling late after age 65. Read on to find out why the Inflation Reduction Act makes Medicare stronger.

How does the Medicare program work?

The Original Medicare The program consists of 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 paid 40 calendar quarters (10 years) of Medicare taxes out of their paychecks receive free Part A coverage. If you don’t qualify for free Part A coverage, you can purchase it in 2024 for $278 per month if you have paid more than 30 calendar quarters of Medicare taxes, or $505 per month if you haven’t.

Part A covers surgeries, hospitalizations, nursing home and hospice care, inpatient rehabilitation, laboratory testing, and certain types of home care.

Part BFor coverage under Part B, all Medicare participants must pay a monthly premium, which starts at $174.70 in 2024 but increases by higher incomes. The cost is deducted from your Social Security payment or billed every three months. Part B is optional if you receive Part A for free, but if you have to pay for Part A, you must also sign up for Part B.

Part B covers physician and health care provider services, outpatient treatments, medical devices, preventive services, and other medical and health services not covered by Part A.

Part C. Medicare Advantage Plans (also known as Part C plans) are private insurance programs that must provide at least equivalent coverage to original Medicare Part A and Part B and often also include Part D benefits (see below).

Part D. Medicare Part D is a private insurance supplement to Medicare that provides coverage for prescription drugs. You must be enrolled in both Part A and B to purchase a Part D plan.

Medigap plans are supplemental private insurance plans that work together with Original Medicare Part A and Part B to provide additional benefits or coverage.

How do I sign up for Medicare when I turn 65?

Medicare enrollment is managed by the Social Security Administration, and you can Apply for Medicare during an initial seven-month period around your 65th birthday: the three months before your birthday month, your birthday month, and the three months after.

After the initial enrollment period, you may enroll in Part A during the General Enrollment Period — January 1 through March 31 — without penalty if you qualify for premium-free coverage. If you are required to pay a premium for Part A, you will pay a late enrollment penalty (see below).

If you don’t enroll in Part B during the initial enrollment period, you’ll also have to wait until the general enrollment period from January through March. You’ll pay a penalty that will continue for as long as you’re enrolled in Part B. Enrolling in Medicare during the general enrollment period also means your coverage won’t start until July 1.

Americans who receive Social Security or Railroad Retirement Board benefits at least four months before age 65 are automatically enrolled in Medicare Part A and Part B on the first day of the month they turn 65. If you want to defer Part B, you must: contact Social Security before your coverage starts.

If I am 65 or older and have health insurance through my work, do I also need to enroll in Medicare?

No. If you are still working, your company employs more than 20 people, and you have work-related health insurance, you do not need to enroll in Medicare until your existing health insurance expires. When you stop working or your employer discontinues its group health insurance plan, you do not have to enroll in Medicare until your current health insurance expires. eight months to sign up for Medicareregardless of whether you have COBRA or another health insurance policy.

If you enroll in Medicare and also have insurance through your job, your job insurance will pay first and Medicare will pay second.

If you work for a company with fewer than 20 employees, you should contact your company’s HR department for the details of your health insurance program. It’s likely that you can defer Medicare enrollment, but some employers require people 65 and older to enroll in Medicare in order to receive company health insurance benefits.

For these smaller companies with fewer employees, Medicare Pays Firstand work-related insurance comes second.

If you turn 65 and don’t have work-related health insurance, you must enroll in Medicare within the first seven months of enrollment. Otherwise, you’ll pay a penalty that will increase your premium.

To answer a few quick questions on the official Medicare website will help you determine if and when you should enroll in Medicare. For even more details, a extended information sheet from the Centers for Medicare and Medicaid Services outlines some possible scenarios for people deciding whether or not to enroll in Medicare at age 65.

If you want completely opt out of Medicare Part AThis is possible, but you will have to give up your social security benefits in full and repay any benefits you have already received.

What are the penalties for late enrollment in Medicare?

The Fines for Late Medicare Enrollment appear as increased Medicare monthly premiums. If you qualify for premium-free Medicare Part A, there is no penalty for late enrollment, although you must wait until the general enrollment period from January to March to join.

If you are required to pay for Part A and you join after your initial enrollment period, you will pay 10% more for your monthly premium for twice as many years as you have deferred your registrationFor example, if you enroll in Medicare four years late, you will pay an additional 10% for Part A every month for eight years.

Late enrollment in Medicare Part B can cost you more and the penalty will linger for much longer. If you decide to enroll late in Part B, you can only do so during the General Enrollment Period and you will pay a additional 10% per month for each year you postpone your registrationThe penalty for late registration for Part B is permanent — You will continue to pay the additional premium each month as long as you receive Medicare benefits.

For Part D, you can defer enrollment if you already have existing prescription drug coverage, but penalties begin to accrue after 63 days without coverage. You pay 1% more monthly premiums for each month you delay your registration in Part D.

After you enroll in a Medicare plan, you will receive a notice explaining potential penalties. If you disagree with a penalty, you can to file an appeal within 60 days of the date on the notice.

Can I change my Medicare plan after I enroll?

Yes. During the Medicare Open Enrollment Period (OEP), also known as the Annual Election Period (AEP), you can switch from a Medicare Parts A & B plan to a Part C plan, or vice versa. You can also switch to Part C plans. Finally, you can join, cancel, or switch to a Part D prescription drug plan. The Open Enrollment Period occurs between October 15 and December 7 of each year, and your upgraded coverage begins on January 1.

You can also make changes during Special Enrollment Periods (SPE), which occur after certain life events, such as if you move or lose other coverage. You have the option to switch to a different plan if your current plan changes its contract with Medicare. You can enroll in a new plan within 60 days of the life event.

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