Your 65th birthday is an important Medicare milestone. Although some people qualify for Medicare earlier based on disability, most people first become eligible for the program when they turn 65. Many of these people want to enroll immediately, but some people decide to delay enrollment. Here are six questions you should ask to decide whether you should enroll in Medicare at 65.
1. Do You Qualify for Premium-Free Medicare Part A?
Most people who qualify for Medicare also qualify for premium-free Medicare Part A. Generally, if you or your spouse paid Medicare taxes on income for at least 40 quarters, you won’t have to pay for Medicare Part A. If you receive Social Security or Railroad Retirement Board benefits, or if you qualify for these benefits but haven’t filed for them yet, you should also qualify for premium-free Medicare Part A.
If you don’t qualify for premium-free Medicare Part A, you may still be able to enroll. Medicare says that the cost is $499 per month in 2022 for people who paid Medicare taxes for fewer than 30 quarters. For people who paid Medicare taxes for 30 to 39 quarter, the standard premium is $274 per month.
Warning! Medicare isn’t free. There’s a premium for other Parts of Medicare, as well as other out-of-pocket costs.
2. Do You Have Coverage Through a Current Job?
If you’re thinking about delaying Medicare enrollment but you plan to enroll eventually, you need to be careful. Late enrollment can lead to coverage gaps and lifelong penalties that add to your monthly costs. However, some people qualify for penalty-free late enrollment based on current employment.
If you have group health coverage through your current employment or your spouse’s current employment, and if the employer has at least 20 employees, you may be able to delay Medicare enrollment without any penalties. When the employment or coverage ends, you’ll have a Special Enrollment Period.
Warning! Before delaying enrollment, make sure your health plan qualifies. Talk to your plan administrator.
3. Do You Have COBRA Coverage?
If you have COBRA coverage, Medicare says that you should sign up for Medicare when you turn 65 to avoid coverage gaps and late enrollment penalties. Your COBRA coverage will probably end when you enroll in Medicare.
Warning! CMS says that COBRA coverage doesn’t count as coverage through current employment, and you won’t qualify for a Special Enrollment Period based on it. Retiree coverage doesn’t count either.
4. Do You Have Marketplace Coverage?
If you have a Marketplace plan, you will probably need to drop coverage and switch to Medicare when you turn 65. Note that you will generally lose any Marketplace premium subsidies and cost-sharing reductions when you qualify for Medicare. However, Healthcare.gov says that some people, notably those who have to pay a premium for Medicare Part A, may decide to purchase a Marketplace plan instead of enrolling in Medicare.
Warning! It’s illegal for someone to sell you a Marketplace policy if they know you have Medicare. You can’t have both types of insurance.
5. Do You Have an HSA?
Once you’re enrolled in Medicare, you can no longer make contributions to your HSA. You will still be able to use your HSA funds; you just can make contributions anymore. This may impact your decision to enroll in Medicare.
Warning! Medicare Part A coverage can start six months before you enroll. This retroactive coverage period can cause problems for people with HSAs. Medicare recommends stopping HSA contributions at least six months before you enroll in Medicare to avoid a tax penalty.
6. Are You Uninsured?
If you’re uninsured, this is an easy one. You should enroll in Medicare when you become eligible. If you’re worried about costs, there are programs that can help you, including Medicaid and Medicare’s Extra Help program.
Enrolling in Medicare at 65
If you’ve decided to enroll in Medicare when you turn 65, you’ll want to enroll during your Initial Enrollment Period. This is a seven-month period that starts three months before you turn 65. If you want coverage to start the month you turn 65, make sure you enroll before your birthday month.
Don’t delay. If you miss this enrollment period, you may have to wait until the General Enrollment Period that runs January to March every year. This can result in coverage gaps, and you could get hit with late enrollment penalties.
You’ll also need to choose the right Medicare plan for your needs. You have a lot of choices, including Original Medicare, Medicare Advantage, Medicare Part D Prescription Drug Plans and Medicare Supplemental Insurance Plans. Here’s how to choose a Medicare plan.