Key takeaways

  • Medicare is a federal health insurance program. People become eligible at age 65, regardless of retirement status, or earlier if they qualify based on disability benefits. Medicare coverage includes potential monthly fees and out-of-pocket costs.
  • For those with premium-free access, signing up for Medicare Part A is generally advised even while working and having employer-based insurance. Special enrollment periods are available to avoid penalties when enrolling in other Medicare parts later.
  • Planning for healthcare costs in retirement is essential, and Medicare offers options like premium deductions from Social Security benefits and savings programs to help manage expenses.

Medicare is a public health insurance program that you qualify for when you turn 65 years old. This might be retirement age for some people, but others choose to continue working for many reasons, both financial and personal.

In general, you pay for Medicare in taxes during your working years, and the federal government picks up a share of the costs. But some parts of the program still come with a monthly fee and other out-of-pocket costs.

Keep reading for help deciding when to sign up for Medicare. We review what your options are if you choose to keep working, what it will cost, and how to avoid penalties if you delay enrollment.

Retirement age is not a set number. Some people may have the option to retire early, while others need — or want — to keep working.

That said, the Social Security Administration (SSA) allows you to receive your full retirement benefits between the ages of 66 and 67, and the average retirement age in the United States is around 66.

Regardless of when you plan to retire, Medicare has designated age 65 as the starting point for your federal health benefits. If you choose to retire early, you’ll be on your own for health coverage unless you have specific health issues. Otherwise, you’re advised to sign up for Medicare programs in the few months before or after your 65th birthday.

Different rules apply if you continue working after age 65. How and when you sign up will depend on what insurance coverage you have through your employer.

You can sign up for Medicare during your Initial Enrollment Period (IEP). This seven-month window begins three months before your 65th birthday and ends three months after. Enrolling during this time helps you avoid late penalties.

Can you get Medicare before age 65?

What if you decide to keep working?

If you have healthcare coverage from your employer, you may continue to use that health insurance. Because you pay for Medicare Part A through taxes during your working years, most people don’t pay a monthly premium.

If you have an insurance plan through your employer because you’re still working, you may also qualify to sign up late under a special enrollment period and avoid any penalties.

Is it a good idea to get Medicare if you’re still working at 65?

Even if you keep working past 65, you can still enroll in Medicare. In this case, it could be beneficial because Medicare can serve as a secondary payer for costs not covered under your employer’s insurance plan.

That said, if you enroll in Medicare Part B, you will have a monthly premium. Whether or not you want to pay two premiums depends on your specific financial situation and your healthcare needs.

Medicare programs can help cover your healthcare needs during your retirement years. It is automatically offered when you turn 65 years old. While Medicare isn’t necessarily mandatory, it may take some effort to opt out of.

You may be able to defer Medicare coverage. This is important to consider if you have a reason that makes you eligible for deferment or if you’ll face a penalty once you do enroll.

Is it mandatory to sign up for Medicare at age 65?

While you can decline Medicare altogether, Part A is usually premium-free for most people and won’t cost you anything if you decide not to use it.

Declining Medicare completely is possible, but if you do, you’ll be required to withdraw from all of your monthly benefits. This means you can no longer receive Social Security or Railroad Retirement Board benefits, and you must repay anything you have already received when you withdraw from the program.

Most people don’t pay a monthly premium for Part A, but you will still have to plan to pay a portion of your inpatient care costs if you’re admitted to a hospital for care.

Other Medicare parts, like Part B, also come with costs that can add up. You’ll need to pay monthly premiums, copayments, coinsurance, and deductibles. You can pay for premiums and other Medicare costs in several ways.

While you could budget and save for healthcare throughout your life, other programs can help:

  • Paying with Social Security: You can have your Medicare premiums deducted directly from your Social Security benefits. Plus, certain protections can keep your premium increase from exceeding your cost-of-living increase from Social Security. This is known as the hold harmless provision, and it could save you money from year to year on your premiums.
  • Medicare savings programs: These state programs use Medicaid dollars and other funding to help you pay your Medicare costs.
  • Extra Help: The Extra Help program offers additional help paying for prescription medications under Part D.
  • Don’t delay your enrollment: To save the most money on your Medicare costs, make sure you qualify for a special enrollment period before you delay signing up.

Important Medicare Deadlines

  • Initial enrollment: You can get Medicare as you approach your 65th birthday. Initial enrollment is the 7-month period that starts 3 months before you turn 65 years old and ends 3 months after. If you’re currently working, you can get Medicare within an 8-month period after retirement or after opting out of your employer’s group health insurance plan and still avoid penalties. You can also enroll in a Medigap plan any time during the 6-month period that begins with your 65th birthday.
  • General enrollment: For those who miss initial enrollment, there’s still time to sign up for Medicare from January 1 through March 31 each year. But you may be charged with an ongoing late-enrollment penalty if you choose this option. During this period, you can also change or drop your existing Medicare plan or add a Medigap plan.
  • Open enrollment: You can change your current plan any time from October 15 through December 7 annually.
  • Enrollment for Medicare add-ons: From April 1 through June 30, you may add Medicare Part D prescription drug coverage to your current Medicare coverage.
  • Special enrollment: If you have a qualifying event, including a loss of health coverage, moving to a different coverage area, or divorce, you may qualify to enroll in Medicare without penalty for 8 months following this event.

The federal government helps subsidize your healthcare costs through a variety of Medicare programs after age 65.

If you keep working, you can delay enrollment in these programs or pay for your healthcare through a combination of public and private or employer-based programs.

Even with these programs, you may be responsible for a share of your healthcare costs.

Plan ahead for healthcare in your retirement to avoid higher costs or late enrollment penalties, especially as they apply to Medicare programs.