Can You Refuse Medicare When You Turn 65?

December 10, 2024•3 min read

Understanding Medicare When You Turn 65

Reaching the age of 65 is a milestone that often brings questions about Medicare. Many wonder if Medicare is mandatory and what options they have when they become eligible. Here’s a breakdown of what you need to know about Medicare when you turn 65.

Medicare is a federal health insurance program for people 65 and older.
It includes different parts: Medicare Part A (hospital insurance) and Medicare Part B (medical insurance).
When you turn 65, you are first eligible to sign up for Medicare, but is it mandatory?

Is It Mandatory to Sign Up for Medicare at 65?

While Medicare offers significant benefits, it is not mandatory to sign up when you turn 65. However, there are important considerations:

If you don't enroll in Medicare Part B when you are first eligible and are not covered by an employer health plan, you may have to pay a penalty.
Some choose to defer enrolling in Medicare if they have employer coverage or other health insurance.
Understanding when and how to sign up can help avoid late enrollment penalties.

The Initial Enrollment Period

The Initial Enrollment Period is a crucial time for those turning 65. It begins three months before your 65th birthday, includes your birthday month, and ends three months after. During this period, you can:

Enroll in Medicare Part A and Part B.
Choose a Medicare Advantage Plan or a prescription drug plan.
Consider your options if you plan on working past 65.

Working Past 65: Deferring Medicare

If you continue working past the age of 65 and have employer coverage, you might opt out of Medicare. Here's what to consider:

Employer coverage must be from a company with 20 or more employees to defer Medicare Part B without penalties.
You will have a Special Enrollment Period to enroll in Medicare after your employer coverage ends.
Consult with a licensed insurance agent to understand how your employer plan works with Medicare.

Understanding Medicare Parts and Penalties

Medicare is composed of different parts, each offering unique benefits:

Medicare Part A: Covers hospital insurance, usually at no cost if you’ve paid Medicare taxes while working.
Medicare Part B: Covers medical insurance. You may have to pay a monthly premium.
Failing to sign up for Part B when first eligible might result in a late enrollment penalty.
Medicare Advantage (Part C) and prescription drug plans offer additional options.

Penalties for Late Enrollment

Not enrolling in Medicare on time can lead to penalties:

Late enrollment in Part B can result in a 10% penalty for each full 12-month period you could have had Part B but didn’t sign up.
Prescription drug plan late enrollment penalties may also apply if you go without this coverage for 63 days or more.

Special Enrollment Periods

A Special Enrollment Period allows you to sign up for Medicare outside of the usual enrollment periods. It applies if:

You are covered under an employer or union plan when you become eligible for Medicare.
You have 8 months to enroll in Part B after your employment ends or the group health coverage ends, whichever happens first.

What If I Want to Buy My Own Health Insurance?

Some individuals consider buying their own health insurance instead of enrolling in Medicare. Here’s what to weigh:

Ensure coverage is as comprehensive as Medicare to avoid gaps.
Be aware of potential higher costs compared to Medicare Plans.
Consult with insurance companies or an advisor to make an informed choice.