Generally, a person enrolls in Medicare when they are aged 65. They may also be eligible to enroll because of disability or certain diseases. A person may choose other healthcare options or opt out of the program.
According to the Kaiser Family Foundation (KFF), almost 60 million people are enrolled in Medicare.
This article looks at original Medicare, Part A and Part B, and automatic enrollment. It also discusses when and if someone can opt out of Medicare, along with any penalties, and costs. It then looks at what happens if a person is working past 65 years of age and has two health plans. Finally, it looks at enrollment periods.
Original Medicare includes Part A, hospital insurance, and Part B, medical insurance.
Some people are automatically enrolled in original Medicare, while others may have to wait until they are eligible.
Automatic enrollment occurs in these cases:
- If a person is under 65 years old and has certain disability benefits, they will be automatically enrolled after getting the benefits for 24 months.
- If a person has amyotrophic lateral sclerosis (ALS), they will be automatically enrolled when they start getting disability benefits.
- If a person gets retirement benefits from Social Security (SSI) or the Railroad Retirement Board (RRB), they will be enrolled in Medicare Part A when they turn 65 years old. If they registered for Part B at the same time as they signed up for the retirement benefits, they will also be automatically enrolled in Part B.
If a person has end stage renal disease (ESRD), they can apply to be enrolled in original Medicare, parts A and B.
If a person is not automatically enrolled in original Medicare, they may be able to delay doing so.
Medicare Part A
If a person qualifies for premium-free Part A, they generally cannot opt out of the coverage. If they choose to do so, they may lose any Railroad Retirement Board retirement benefits and Social Security benefits.
However, if a person does not qualify for a premium-free Part A plan, they will have to pay the premium, which in 2021 is a maximum of $471 each month.
Can I delay enrolling in Part A?
A person can delay enrolling in Part A if they have another type of health insurance coverage, such as COBRA.
However, Medicare may apply a penalty of up to 10% to the monthly premiums if someone delays enrollment.
A person must pay the increased premium for twice the number of years they deferred enrollment. For example, if someone delays enrollment for one year, they will have to pay the increased premium for two years.
Medicare Part B
In 2021, Medicare Part B has a standard premium of $148.50. Some people may have to pay more if their income is above $88,000.
Can I delay enrolling in Part B?
People can delay enrollment in Part B if they have other health insurance coverage. If someone does not enroll when their employment ends or the group health insurance ends, they may have to pay a late enrollment penalty.
If someone delays enrollment, the penalty can be an additional 10% on the Part B premiums for each year of delay.
A person does not legally have to enroll in Medicare. Medicare opens enrollment to people when they turn 65 years old if they have been an United States citizen for at least ten years.
A person can enroll in Medicare before the age of 65 if they have:
- a diagnosis of end stage renal disease (ESRD)
- a diagnosis of amyotrophic lateral sclerosis (ALS, also called Lou Gehrig’s disease).
- received Social Security disability benefits for 24 months
If a person gets Social Security benefits, Medicare enrollment is automatic.
If a person continues to work past the age of 65, their employer’s size affects the rules about Medicare enrollment.
More than 20 employees
If a person’s employer has 20 or more employees, Medicare will not penalize someone who delays enrollment as long as they have group health insurance from their employer.
When the employer-supplied health coverage ends, Medicare has a special enrollment period during which a person can enroll.
Less than 20 employees
If the employer has fewer than 20 employees, there are different Medicare rules.
The employer can decide if their employees must sign up for Medicare when they turn 65. In that case, Medicare automatically becomes the primary healthcare coverage, and any employer-provided coverage is secondary.
Medicare settles the employee’s medical bills, and the employer group plan pays only for any outstanding services.
People can opt to enroll in Medicare while they have other health insurance.
The coordination of benefits explains which health insurance pays first for a covered service or item. The health coverage that pays first is the primary payer, and any outstanding amount is then sent to the secondary payer.
The primary payer pays for covered healthcare up to the plan limits. The secondary payer steps in to pay if there are costs the primary payer did not cover.
Medicare can act as a primary or secondary payer. The rules about how Medicare works with other insurance depend on several factors:
- If a person has Medicare and Medicaid, Medicare pays first.
- If a person has employer group health insurance, Medicare pays first if the employer has less than 20 employees; if the employer has more than 20 employees, then Medicare pays second.
- If someone has employer group health insurance after they retire, Medicare pays first, and the retiree coverage pays second.
If a person has questions about coordinating their health insurance coverage, they can contact the Benefits Coordination & Recovery Center (BCRC) at 1-855-798-2627 (TTY: 1-855-797-2627).
Medicare offers several enrollment periods when a person can enroll in original Medicare, parts A and B.
A person can use this online tool to help find out when they are eligible to enroll, and how much their premium will cost.
The Medicare Initial Enrollment Period (IEP) lasts for 7 months. It starts 3 months before someone’s 65th birthday, includes the birthday month, and ends 3 months after.
If someone misses the IEP, they can also enroll during the General Enrollment Period (GEP), from January 1 through March 31 each year. People may have to pay a late-enrollment penalty if they did not enroll when they were first eligible.
People can decide to opt out of Medicare. Medicare is not a lawful requirement. However, people may have to give up certain retirement benefits if they choose not to enroll.
Medicare can also apply late enrollment penalties if people initially opt out of Medicare and then decide to enroll at a later date.
If a person is choosing between two or more health insurance policies, they should check the Medicare rules and restrictions to ensure adequate healthcare coverage.