Do most people go on Medicare at 65?

While virtually all Americans become eligible for Medicare at age 65, the decision to actually enroll often depends on their employment status and current health coverage. Do most people go on Medicare at 65? The answer is nuanced, as many people choose to delay enrollment for certain parts of Medicare if they or their spouse are still working and have creditable employer-sponsored coverage.

Quick Summary

The majority of individuals become eligible for Medicare at 65, but not everyone enrolls immediately. Enrollment decisions are often based on whether a person is still working and has health insurance through their job or a spouse's. Failure to follow the correct enrollment procedure can lead to lifelong late penalties.

Key Points

• Enrollment Depends on Employment: Many delay enrolling in Medicare Part B at 65 if they or a spouse have active employer coverage.

• Automatic Enrollment is Not Universal: Only those receiving Social Security benefits are automatically enrolled in Medicare Parts A and B at 65.

• Beware of Late Penalties: Missing your Initial Enrollment Period without creditable employer coverage can result in lifelong late penalties for Medicare Parts B and D.

• Creditable Coverage is Key: For delaying enrollment without penalty, only coverage from current employment (or a large employer if disabled) counts; COBRA and retiree plans do not.

• Employer Size Matters: For small companies (under 20 employees), Medicare is the primary payer, requiring timely Part B enrollment.

• Special Enrollment Periods Exist: An eight-month SEP is available after employment or current job-based coverage ends to enroll in Medicare without penalty.

• Consider Premium-Free Part A Early: Enrolling in premium-free Part A at 65 is generally advised even if delaying Part B due to employer coverage.

Medicare at 65: Enrollment options and considerations

Turning 65 marks a significant milestone for many Americans, as it's the age most people become eligible for Medicare. However, not everyone enrolls immediately. Your personal circumstances, such as employment and Social Security benefits receipt, affect enrollment timing and whether it's automatic or requires action.

Automatic vs. active enrollment

If you receive Social Security or Railroad Retirement Board benefits at 65, you're usually enrolled automatically in Medicare Parts A and B. If not, you must sign up during your seven-month Initial Enrollment Period (IEP) to avoid late penalties.

Comparing Medicare to employer coverage

Deciding between Medicare and an employer plan at 65 is important, especially regarding delaying Part B without penalties, which can depend on the employer's size.

Scenario	Primary Payer	Action Needed	Key Consideration
Employer with 20+ employees, still working	Employer Plan	Can delay Part B enrollment without penalty via a Special Enrollment Period (SEP).	Compare costs and benefits; delaying Part B saves on premiums while working.
Employer with fewer than 20 employees, still working	Medicare	Must enroll in Medicare Part B during your IEP to avoid late penalties.	Your small employer's plan becomes secondary to Medicare.
Covered by retiree coverage or COBRA	Medicare	Must enroll in Medicare during your IEP. Cannot use an SEP to avoid penalties.	Retiree or COBRA plans do not count as creditable coverage for avoiding late penalties.

Understanding the implications of delaying enrollment

Delaying Medicare enrollment, particularly Part B, can lead to lifelong late enrollment penalties without qualifying creditable coverage from current employment. Part A is typically premium-free, so many enroll at 65 even if working. For Part D, delay without penalty is possible with creditable drug coverage.

Steps for enrolling in Medicare at 65

1. Understand your situation: Determine if manual enrollment is needed based on Social Security benefits. Consider employment status and employer plan size.
2. Review your options: If you have creditable employer coverage, compare its costs and benefits with Medicare. Decide whether to enroll in Part A only or all parts.
3. Take action: If manual enrollment is required, sign up through the Social Security Administration during your IEP.
4. Manage your coverage: If delaying Part B/D due to employer coverage, note the eight-month Special Enrollment Period after employment or coverage ends for penalty-free enrollment.

Conclusion

Whether most people go on Medicare at 65 depends on individual situations. Eligibility begins at this age, but immediate enrollment, especially for Part B, often hinges on employment and employer-sponsored coverage. Many delay based on creditable coverage and use Special Enrollment Periods. Staying informed about enrollment periods and rules is essential for continuous coverage and avoiding penalties.

Frequently Asked Questions

Is Medicare enrollment mandatory at 65?

No, enrollment is not mandatory at 65, but delaying without creditable coverage from active employment risks lifelong late penalties for Part B and potentially Part D.

What is the Initial Enrollment Period (IEP)?

The IEP is the seven-month window around your 65th birthday when you can first sign up for Medicare. It starts three months before your birthday month and ends three months after.

When can I delay Medicare Part B without a penalty?

You can delay Part B without a penalty if you (or your spouse) are actively working and have a health plan through that employment. You can then use a Special Enrollment Period (SEP) to sign up later.

What is a Special Enrollment Period (SEP)?

An SEP allows you to sign up for Medicare outside standard periods. For those delaying due to employer coverage, the SEP starts when employment or coverage ends and lasts eight months.

What happens if I have COBRA coverage at age 65?

COBRA coverage at 65 is not creditable coverage for delaying Part B without penalty. You must enroll during your IEP to avoid late penalties and coverage gaps.

Do I have to take Part A at 65 if I'm still working?

Since Part A is usually premium-free, it's generally recommended to enroll at 65 even if you have employer coverage and plan to delay Part B.

How are late enrollment penalties calculated?

For Part B, the penalty is 10% of the standard premium for each 12 months you could have enrolled but didn't, added for life. For Part D, it's 1% of the national average premium per month of delay without creditable coverage, also for life.