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For many people, turning 65 is a big milestone, and understandably so. In fact, age 65 is when you’re first allowed to get coverage under Medicare.
You’re allowed to enroll in Medicare starting three months before the month of your 65th birthday. And it pays to sign up on time, because if you don’t, you could face costly surcharges on your Part B premiums — whether you pay them directly or have them deducted from your Social Security benefits.
That said, there are a couple of scenarios where it pays to delay your Medicare enrollment. Here’s when signing up at 65 doesn’t make sense.
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1. You’re still working and have access to a group health plan
Just because you’re turning 65 doesn’t mean you’re on the cusp on retirement. You may still have plans to work another few years — or longer.
If you have access to a group health insurance plan through your employer, and you’re happy with that coverage, then enrolling in Medicare doesn’t make sense — especially if it will cost you more than what you currently pay for insurance. As long as your company’s group health plan covers 20 or more people, you won’t face penalties for missing your initial Medicare enrollment window. Rather, you’ll get a special enrollment period that will begin once you no longer have your group health plan.
Now if you still have access to a great health plan but are turning 65, you may want to consider signing up for Medicare Part A, which covers hospital care. Part A, unlike Part B, is generally free for enrollees. And if you put that coverage in place, Part A can be your secondary insurance for hospital care — and potentially pick up costs that your primary insurance doesn’t cover.
The only caveat here is that once you enroll in any part of Medicare — whether it’s coverage you pay for or not — you’ll no longer be eligible to participate in a health savings account (HSA). HSAs offer a number of tax breaks, so if you’re currently funding one, you may want to hold off on signing up for Medicare — even Part A.
2. You’re retired but are still covered under your spouse’s group health plan
The penalties that come with not enrolling in Medicare on time only apply if you don’t have access to an eligible group health plan. It may be the case that you’re retired and don’t have employer benefits at all. But if you’re married to someone who’s still working and are on your spouse’s group health plan, the same rules apply — as long as that plan covers 20 people or more, you don’t have to worry about penalties for delaying Medicare.
Of course, if you’re not happy with your spouse’s group health plan — say, you’re being charged a lot to stay on it — then it could pay to look into Medicare. But if your costs under that plan are reasonable and you’re happy with its scope of coverage, then there’s no reason to make changes to your health insurance until your spouse retires and that group coverage goes away.
Medicare may end up being more flexible than you’d expect, at least when it comes to enrollment. Though age 65 is when Medicare coverage begins, if either of these situations applies to you, you may not want to enroll right away.
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