When it comes to Medicare, one thing that many people agree on is that the enrollment process isn’t completely straightforward. Correct, helpful information is out there, but it’s often buried under jargon, lengthy articles, and conflicting sources. If you feel like your 65th birthday is approaching with gaining speed and you’re still confused about what exactly that entails, read this blog for answers to some of the most frequently asked Medicare questions.  

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

Finding a black and white answer to this question is no easy feat, but that’s for a good reason. Whether you must sign up for Medicare or not depends on your unique situation. It will most likely benefit you to enroll once you turn 65, especially if you don’t have another form of health insurance. However, if you do have private coverage when you reach this age – likely because you are, or your spouse is, still working – you may be able to delay enrolling in Medicare. The main concern with delaying is that if you don’t do it properly, you can incur late enrollment penalties.

Medicare.gov has a lot of resources and although the amount of information they provide can be overwhelming, you can at least be confident in the fact that it's accurate. To find out the best, most cost-effective timing for you personally to apply for Medicare, start by answering the questions on this page. For a more general answer, the other important aspect to consider along with whether you will have private coverage at 65 or not is what “parts” of Medicare you plan on signing up for.

What are the different “parts” of Medicare?

This is perhaps the question that causes the most confusion for those learning about Medicare. Many do not understand the difference between A and B, which are two halves of what some refer to as “Original Medicare.” Typically, Part A covers inpatient services at the hospital while Part B is for outpatient medical care, such as visits to your general practitioner. They are meant to complement each other so that you get comprehensive coverage. Of course, this is an oversimplified summary. Below is a more thorough breakdown of the basics. 

Part A

On top of hospital stays and medically necessary surgeries, Part A may also cover short-term care in a skilled nursing facility, limited home healthcare, and hospice care. However, it does not cover long-term care.

Part B

As previously mentioned, Part B usually covers doctor’s visits. It’s also used for outpatient therapy, specialists, durable medical equipment, and in some cases, it covers prescription medications – basically, the medically necessary services used to diagnose, treat, and prevent health conditions. 

Part C

Also known as Medicare Advantage, many of these plans offer prescription drug coverage, as well as hearing, vision, and dental. They are offered by private companies that contract with Medicare to also provide Parts A and B, which you must sign up for to enroll in Part C. 

Part D

Enrolling in Part D is a common way to get proper prescription drug coverage. It’s also provided by private insurance companies. Another similarity it shares with Part C is that it’s only available if you sign up for Parts A and B as well.

Medigap

This is supplemental insurance sold by private companies that is often used towards copays, coinsurance, and deductibles. It is meant to fill any gaps in coverage that the other parts of Medicare do not take care of. Again, you must have Parts A and B to buy one of these plans.

To avoid late penalties, which Parts should you enroll in and when? 

As you continue to age, you will likely need to use at least Medicare Parts, A, B, and D at some point. That’s why although it’s not mandatory to sign up right when you turn 65, it’s often encouraged. Acting during your initial enrollment period will make your plans as low-cost as possible, especially if you are no longer covered by your employer’s health plan, or that of your spouse’s. 

The exact seven-month timeframe of the initial enrollment period for Part A, Part B, and Part D is the three months before your 65th birthday, the month of your birthday, and three months after your birthday. The good news is that you’ll likely be eligible for premium-free Part A. That means you won’t have to pay a dime for it! If you qualify, it’s hard to find a reason against signing up for Part A right away. On the off chance that you do have to pay a premium for Part A, you must also get Part B. Otherwise, Part B – though it is often useful – is generally optional, and you will have to pay an additional premium for it. In 2023, this premium is around $164.90 or higher, depending on your income.

Part D is a good idea for a lot of people as well since Medicare requires you to have “creditable” prescription drug coverage. Creditable means that your insurer is expected to pay, on average, what Medicare Part D would pay. If you decide to delay signing up for Part D, make sure that this expectation is met because going without creditable prescription drug coverage for 63 consecutive days may result in a late enrollment penalty that is permanently added to your premium. 

If you do delay signing up for Medicare Parts A, B, C or D, these are your other enrollment options:

• Special enrollment for Part A and Part B – eight months from the time your employment/coverage ends (whichever comes first)
• Special enrollment for Parts C and D – two months from the time your employment/coverage ends
• General enrollment for Parts A and B – January 1st through March 31st
• Open enrollment for Parts C and D – October 15th through December 7th

If you do not have to pay a premium for Part A (reminder – this is likely), you will not be penalized for signing up later than your initial enrollment period regardless of prior coverage. However, if you don’t qualify and you do delay, your monthly premium may increase up to 10% for twice the number of years you didn’t sign up. Also, don’t forget that if you’re still covered by an employer health plan that is comparable to Medicare when you reach 65, you may be able to delay enrolling in Part B without any penalties. But if you don’t have proper coverage and you don’t sign up for Part B, once you are on Medicare your premium may increase by up to 10% for as long as you are enrolled in Part B.

It's also worth noting that if you’re interested in Medigap, you will get the best plan choices and prices if you purchase within the first six months of your Part B coverage. This is because the providers don’t take your current health into account during this period. Depending on your situation, if you wait until open enrollment, you may pay more for a Medigap plan, or you may not be able to get one at all.  

Considering all this information, you might be wondering if there are any solid, beneficial reasons to delay signing up for Medicare. One thing for those who are still covered by an employer’s insurance to think about is that once you’re enrolled in Medicare Part A, you can no longer contribute to a health savings account (HSA). So, if you have been using one of these through your employer to set money aside for future health care costs, that may be enough cause for a pause. This would be a great time to visit Medicare.gov and get in touch with your financial advisor. With topics this complicated and unique, it’s important to do thorough research and enlist professional help when needed.