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What to Do About Medicare When You Retire Later Than 65

Are you planning for a late retirement? Find out what that means for Medicare.

By Clover Health

You can retire and enroll in Medicare at age 65, but not everyone retires as soon as they turn 65. If you’re planning for a late retirement, you don’t have to switch to Medicare right away. Here's what you need to know.

Medicare at Age 65

The path to retirement is different for everyone. On average, the age of retirement in the U.S. is 65 for men and 63 for women. Whether you retire at 60 or at 70, Medicare becomes available to you when you turn 65.

Enrolling in Medicare Part A

If you’re at least 65 and have worked and paid taxes for a total of 10 years (40 quarters), you’re eligible for free Medicare Part A coverage. This covers hospitalization, nursing care, and even home health care.

Even if you’re still working past the age of 65, it’s a good idea to enroll in Medicare Part A as soon as you turn 65. You can use this Medicare coverage as supplemental coverage along with your employer's insurance. Medicare Part A can even pay for some costs not covered by your employer’s plan.

What Is the Medicare Late Enrollment Penalty?

You may have heard about a late enrollment penalty, but what is it? If you miss the enrollment period for Original Medicare, you’re charged a late enrollment penalty. This is a fee that’s added onto your premiums every month. For most plans, the late penalty is 10% of the monthly premium amount. Part A late enrollment penalties will expire after a certain amount of time, but Part B and Part D penalties will last as long as you have that plan. To avoid those fees, make sure you enroll within your Initial Enrollment Period (IEP), which begins 3 months before your 65th birthday month and ends 3 months after your 65th birthday month.

How to Avoid a Medicare Late Enrollment Penalty

If you’re getting great healthcare coverage from your employer, you don’t have to enroll in Medicare when you turn 65. You’ll have one more chance to enroll in Medicare without paying a late enrollment penalty. Most health insurance plans that cover more than 20 employees will let you delay your Medicare enrollment and avoid the late penalty.

Employer plans with less than 20 employees are not eligible, and you’ll need to enroll in both Medicare Parts A and B when you turn 65 to avoid the late fee. Either way, check with your employer to make sure you have all the information to avoid any fees.

Medicare Special Enrollment Period

When your employment insurance ends, you'll have a chance to enroll in Medicare. This Special Enrollment Period (SEP) lasts 8 months. You’ll be able to enroll in Original Medicare Parts A and B, add a Part D prescription drug plan, or enroll in a Medicare Advantage plan, like those offered by Clover Health. This is your last chance to enroll in Medicare without a late enrollment penalty.

How to Prepare for Late Retirement

  • There are a few things you’ll need to consider if you’re planning to keep working after age 65.
  • It’s a good idea to enroll in Medicare Part A when you turn 65. You probably won’t need to pay a premium, and this plan may help fill in any gaps in your employer's plan. Find out if you'll be eligible for an SEP when you retire.
  • Check to see if enrolling in Medicare will save you money. Enrolling in a Medicare Advantage plan through a third party like Clover Health can help you save on out-of-pocket costs and can give you added benefits that are not in your employer's plan or included in Original Medicare.

Finding the Right Medicare Plan

Whenever you retire, Clover Health can help you find the perfect plan. Whether you’re working or retired now, find out more about our great Medicare Advantage plans by calling 1-800-836-6890.


Published on 1/11/21

Photo credit: Getty