Are you of Medicare age, but not ready to retire from your career? This is a common scenario for many people who are aging into Medicare.
While most people should enroll in Medicare Part A (Hospital Insurance) when they’re first eligible, you may be able to delay Part B (Medical Insurance) until you stop working or your health care coverage ends. However, you may incur penalties if you delay.
Skipping your Medicare Initial Enrollment Period might make it more difficult to enroll later on. If you do enroll in Medicare, that doesn’t necessarily mean you need to drop your private health insurance. In most cases, it simply depends on the type of health coverage you currently have.
Here are a few different scenarios and how they would affect the coverage you should enroll for and/or delay.
I’m currently working and have coverage
The size of the employer determines whether you may be able to delay Part A and Part B without having to pay a penalty if you enroll later.
If your employer has less than 20 employees, signing up for Part A and Part B when you’re first eligible, would allow your Medicare coverage to pay prior to any other coverage. If you don’t enroll in Part B when you’re first eligible, you could incur a late enrollment penalty and may experience a gap in coverage if you decide to enroll later.
If your employer has 20 or more employees and has group health coverage, you may be able to delay Part A and Part B without having to pay a lifetime late enrollment penalty. However, if you aren’t eligible for premium-free Part A, and don’t buy into it when you’re first eligible, you may pay a penalty. If you are eligible for premium-free Part A, you can enroll in Part A at any time after you’re eligible for Medicare.
Note: To avoid a tax penalty, you should stop contributing to your Health Savings Account (HSA) at least 6 months before you apply for Medicare.
I have retiree or COBRA coverage
If your employer has fewer than 20 employees, signing up for Part A and Part B when you’re first eligible, would allow your Medicare coverage to pay prior to any other coverage.
Note: If you do not enroll in Part B when you are first eligible, you may incur a late enrollment penalty and a gap in coverage if you decide to enroll later.
I have TRICARE/CHAMPVA, and am a retired service member
If you’re eligible for Part A and TRICARE/CHAMPVA, you must get Part B to keep your TRICARE/CHAMPVA coverage. However, if you have TRICARE and are an active-duty service member (or the spouse or dependent child), you are not required to enroll in Part B to maintain your coverage.
If you have only Veterans’ benefits, you should enroll in Part A and Part B when you’re first eligible.
Note: you may incur a Part B late enrollment penalty fee, and face a gap in coverage if you decide to enroll in Part B later.
I have End-Stage Renal Disease (ESRD)
If you qualify for Part A, you can also get Part B to receive the full benefits available under Medicare, which cover certain ESRD services.
I have Marketplace, SHOP Marketplace, or other private insurance
If you’re eligible for premium-free Part A, you should enroll in Part A and Part B when you’re first eligible. If you aren’t eligible for premium-free Part A, you can choose to stay in the Individual Health Insurance Marketplace(that coverage may cost less).
Note: You may incur a Part B late enrollment penalty fee and face a gap in coverage if you decide to enroll in Part B later. Additionally, if you have a reduced premium or tax credit on your Marketplace coverage, it will no longer qualify once your Part A starts.
Enrolling in Medicare
Enrolling in Medicare when you turn 65 can help save you money and ensure a seamless transition. There are many things to consider when reviewing your health care coverage as you age into Medicare. We’re here to answer your questions and find the best solution for you. Give one of our agents a call at 1 (855) 665-9200.
