Should You Enroll in Medicare Before 2022 Wraps Up?

Making sure you have health coverage in place is one of the most important financial moves you can make, whether you’re new to the working world or gearing up to leave it. In fact, if you’re 65 already or are close to that age, you may be contemplating whether the time is right to enroll in Medicare. You may even be thinking of doing so before the end of the year.

But does it pay for you to enroll in Medicare now? Ask yourself these three questions to find out.

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1. Am I still working?

If you’re still working, you may be covered by a group health plan through your employer. And if that’s the case, you should know that you will get more time to sign up for Medicare, even if you’re coming to the end of your initial enrollment window.

Your initial Medicare sign-up window spans seven months. It starts three months before the month during which you turn 65 and ends three months after that month.

If you don’t enroll during that initial window, you could face lifelong surcharges on your Medicare Part B premiums for signing up late. But that penalty won’t apply if you’re late to enroll because you were covered by a qualifying employer plan at that time.

Of course, you should run the numbers to see if your healthcare costs are likely to be more affordable under Medicare versus your employer’s plan. If your employer’s plan is heavily subsidized, it may be the better option — so you may want to keep it while you’re still working and hold off on Medicare for the time being.

2. Am I planning to leave my job soon?

Leaving a job can be a jarring experience, and the months that follow can be a big adjustment. If you’re planning to leave your job in the new year, you may want to sign up for Medicare before 2022 comes to an end. That way, you can adjust to your new coverage and have one less bit of upheaval to deal with later.

3. Do I want to keep funding a health savings account?

Once you enroll in Medicare, you’re no longer eligible to contribute money to a health savings account (HSA). That doesn’t mean you can’t use the money in an existing HSA once you’re enrolled in Medicare. It simply means you can’t keep adding funds to it.

If one of your goals is to grow your HSA balance before you retire, and you’re still working and on a group health plan, then you may want to hold off on enrolling in Medicare. This includes Part A, which is generally free for enrollees.

Some seniors opt to get Part A coverage even while they are enrolled in a group health plan because it doesn’t cost them anything and can serve as secondary insurance. But if you want to keep pumping money into your HSA, you can’t sign up for Medicare Part A just yet.

At this point, you may have a number of year-end financial moves you want to make. Those might include maxing out your IRA and reviewing your investments. While you’re at it, take the time to make a choice about Medicare. You may decide that enrolling before 2022 wraps up is a smart idea. Or, you may decide to put off your enrollment and reconsider the question in 2023.

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