Enrollment Information for People New to Medicare

I’m turning 65 soon, but I like my current insurance. Do I have to enroll in Medicare? Will there be penalties if I don’t?

It depends on how you are receiving your current insurance. If you are receiving employer-sponsored health insurance through either your or your spouse’s job when you turn 65, you may be able to keep your insurance until you (or your spouse) retire(s). You will need to contact your employer’s benefits representative to find out whether they will continue your coverage when you turn 65. Since Medicare Part A is premium-free for most beneficiaries, you may want to enroll in Part A as soon as you are eligible (i.e., three months prior to the month of your 65th birthday), even if you will continue to receive employer-sponsored insurance at that time. If you are covered under an employer plan, you may want to delay signing up for Part B until you (or your spouse) retire(s). However, it is a good idea to check with Social Security or Medicare to confirm you will not face a penalty for late enrollment. Similarly, unless you have drug coverage that is as good as what Medicare drug plans offer, you will need to sign up for a Medicare prescription drug plan when you enroll in Medicare or you may face a late enrollment penalty.

If you do not sign up for Part B at the appropriate time, you may face a late enrollment penalty that will increase your Part B premium by 10% of the standard monthly premium for each 12-month period that you delayed enrollment. Similarly, there is a late enrollment penalty if you do not sign up for Part D coverage when you were first eligible to do so and do not have drug coverage that is as good as what Part D offers (“creditable coverage”). The Part D penalty for late enrollment is equal to 1% of the national average premium multiplied by the number of months you did not have “creditable” drug coverage.

If you have coverage through a Marketplace plan, you should sign up for Medicare when you turn 65 and notify your Marketplace plan that you now qualify for Medicare coverage. Your Marketplace coverage will not be cancelled automatically by your plan when you turn 65 and sign up for Medicare, but if you receive premium tax credits to help you pay for your Marketplace plan premium, your eligibility for these tax credits will end when your Medicare Part A coverage begins (people with Medicare are not eligible for these tax credits, and the premium tax credit can only be used for the purchase of Marketplace coverage).

If you choose to enroll in Medicare Part A and keep your Marketplace coverage, you will have to pay the full price for your Marketplace plan, and Medicare will be the primary payer. If you were receiving financial assistance for your Marketplace coverage prior to signing up for Medicare, you will receive a letter in the mail from the Marketplace informing you that you are no longer eligible to receive this financial assistance since you are enrolled in Medicare Part A. You should contact your Marketplace plan to make sure that your financial assistance is stopped when your Medicare coverage begins. If you do not stop receiving the premium tax credit and other financial assistance for your Marketplace plan when your Medicare coverage begins, you may have to repay some or all of the amount of financial assistance you received for the months you had both types of coverage.

If you decide to drop your Marketplace coverage when you become eligible for Medicare, make sure your Medicare coverage has started before you cancel your Marketplace plan so that you avoid any gaps in coverage. You can start signing up for Medicare three months before your 65th birthday.

While we have made every effort to provide accurate information in these FAQs, people should contact the health insurance Marketplace or Medicaid agency in their state for guidance on their specific circumstances.

The Henry J. Kaiser Family Foundation Headquarters: 185 Berry St., Suite 2000, San Francisco, CA 94107 | Phone 650-854-9400
Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in San Francisco, California.