It’s still possible to sign up for a Medicare plan at age 65. It makes sense if you already work for an employer who offers a health plan, which is something millions of Americans face. Signing up for Medicare can potentially reduce your out-of-pocket medical costs. Here’s a look at what you should know about enrolling in Medicare at age 65 or older.
Will Medicare Save You Money?
Medicare can be cheaper than paying monthly fees for an employer-based medical plan. Keep in mind that by the time you reach 65, and you’ve worked for at least ten years, you are entitled to Medicare Part A without paying a monthly premium. Part A pays for in-patient hospital stays and more.
Medicare Part A: Why Not Take It If It’s Free?
Even if you already have a low-cost medical plan through your employer, Part A can fill gaps in which your employer’s group plan lacks coverage. But you should only sign up for Medicare if it makes economic sense with the understanding that Part A is free anyway once you turn 65.
If you lack health coverage, then you must enroll in Medicare Part A as your primary health insurance at age 65. If you don’t enroll within 8 months of turning 65 or lose group coverage – whichever comes first – you may be subject to a penalty. So it’s crucial to sign up for Medicare to avoid a gap in coverage.
Medicare Part B: Delay to Avoid Premiums
If you and your spouse still have group health coverage by the time you turn 65, you may want to delay signing up for Medicare Part B, which covers doctor visits and outpatient services. While Part A is free, Part B requires paying a premium. You’ll need to enroll in Part B when you turn 65 if your employer or your spouse’s employer has under 20 employees and you are not part of a multiemployer group plan.
You should also delay enrolling in Part B if you have a Health Savings Account (HSA) and wish to continue contributing to it. An HSA can be funded by the employee and the employer, although there are maximum limits on contributions per year. Before deciding to delay Part B enrollment, make sure you understand your spouse’s coverage plan.
Special Situations: Previous Employers, Military, Vets CTA
In the event you’ve maintained health coverage from a previous employer or under a spouse’s plan such as COBRA, you’ll need to enroll in both Medicare Parts A and B when you turn 65. If you receive military service benefits through TRICARE or CHAMPVA, you should talk with a Medicare expert to find out if you need to enroll in Medicare as well.