Do I Have to Enroll in Medicare When I Turn 65?

A few myths are floating around about the Medicare program. One of the most common ones is that you have to enroll in Medicare when you turn 65. You don’t! However, like all myths, this one has a tiny bit of truth to it. 

Your Medicare timeline is an important thing to consider. Getting it wrong could mean you’re stuck with penalties, and you could even have to go without coverage. Whether you plan to enroll in Medicare at 65 or want to delay enrollment, you should understand your timeline to avoid those mistakes.

How to Delay Medicare with No Penalties

Many people think that if they don’t get Medicare as soon as they turn 65, they’ll be penalized. That’s true unless you have creditable coverage in place.

What is creditable coverage? To be deemed “creditable,” an insurance plan must offer at least as much coverage as Original Medicare (Parts A and B). The easiest way to determine this is by looking at the size of your employer. If they have 20 or more employees, their insurance is creditable. If they don’t, the insurance might not be. 

In either case, you should investigate your coverage to be sure. Every year you delay Medicare, your current insurance company should send you a letter notifying you if your coverage is creditable or not. If you haven’t gotten a letter, check with your HR manager or call the carrier directly. These rules apply to an employee and anyone other dependents, like a spouse.

You’ll also need to look at your prescription coverage separately. Some insurance plans have creditable medical coverage but not creditable prescription coverage. To be creditable, your plan must meet the following criteria:

• Pays at least 60% of the cost;
• Covers brand-name and generics;
• Offers a variety of pharmacies; and
• Has no annual benefit limit or has a low deductible

Coverage through the VA or TRICARE for Life is always considered creditable Part D coverage.

If you have creditable coverage and choose to delay your Medicare enrollment, you’ll need to provide proof of the coverage when you do decide to enroll in Medicare. You’ll be asked to fill out form CMS L564. Once you have a copy of this form signed by your employer, you should keep a copy for your records. You might be asked to provide this to other carriers in the future.

What Are Medicare Penalties?

You can be penalized for not enrolling in Part A, Part B, and Part D. Part A penalties are not common because most people receive premium-free Part A. As long as that applies to you, you won’t be penalized for not enrolling in Part A, even if you do delay coverage.

Part B Penalty

You will pay a 10% penalty for Part B for every 12-month period you delay it. For example, if you delay Part B for two full years, you’ll pay a 20% penalty. That percentage is based on the current standard Part B premium. In 2023, that means you would pay an additional $32.98 every month. That penalty stays with you for life, and since the Part B premium usually increases, so will your penalty.

Part D Penalty

The Part D penalty is a little less straightforward. You will start getting penalized after you go 63 days without coverage. Then, you’ll pay 1% of the national base beneficiary premium for each month you went without coverage. Like the Part B premium, that number changes each year. In 2023, it’s $32.74. Using the example above, if you went 24 months without coverage, your penalty would be about $7.85 per month. Like the Part B penalty, it sticks with you for life.

To further ensure you don’t incur any Medicare penalties, work with a Medicare advisor like the ones at Local Medicare Specialists. We’ll help you create an enrollment timeline, so your coverage begins as soon as you need it.