Reader question: Am I required to join Medicare when I turn 65?

There’s a lot of confusion about whether you are required to join Medicare when you turn 65.  Unfortunately, depending on who you ask, the answer you get may be wrong.

Recently, my wife and I had lunch with some long-time friends. He’s retired and enrolled in Medicare. She will soon turn 65 but does not plan to retire for at least another two years. The health insurance coverage she has through her work is fine.

She told us that she had attended a retirement planning session offered at her workplace, where the presenter said you must enroll in Medicare at age 65. She wanted to know if that was true. I told her that if the presenter actually said that, then she received some bad information.

Then just last week, an acquaintance asked me that same question.

So the purpose of this article is to give you the real answer, which is:  “It depends.”

Medicare at age 65? One size does not fit all

When turning 65, there are situations when you must enroll in Medicare to avoid a late-enrollment penalty. But there are circumstances when you can choose either to enroll or to defer enrollment.

Whether you have to enroll in Medicare at age 65 depends on how you answer two critical questions:

1.   Are you enrolled in an employer or union group health plan?
2.   Is the enrollment due to your or your spouse’s active employment?

If you can answer “yes” to both questions, then you have options. Let’s use my friend’s situation as the first example.

She will be 65, and she will still be working for an employer with 20 or more employees. She is enrolled in her employer’s group health plan. According to Medicare rules, she has several options:

• Choose to stay with her workplace plan. Then, when she loses that coverage – for whatever reason – she can enroll in Medicare without having a late-enrollment penalty.
• Stay with her workplace plan and sign up for Part A. Part A is hospitalization insurance, and it comes at no cost as long as she paid into Medicare long enough during her working career. In that case, Medicare could act as secondary coverage for hospitalization expenses not covered by her workplace plan.
• Enroll in Medicare and drop her workplace plan.

As you can see, one size does not fit all. In this example, she gets to choose based on what best fits her situation.

A different Medicare scenario

Now let’s consider a different scenario: The wife is younger than 65. She has health insurance through her employer, which also covers her husband. Does he have to enroll in Medicare when he turns 65? 

The answer is No. He can choose either to enroll in Medicare or to stay on her plan. If he defers enrolling in Medicare, then, as in the prior example, when the workplace coverage ends, he will be able to go on Medicare without a late enrollment penalty. He can choose based on his particular financial and health circumstances. But he might want to enroll in Medicare if it provides more flexible health options care at lower cost than a workplace plan for a dependent spouse.

But there also are times when a spouse deferring Medicare enrollment can make good financial sense. I know a couple where the wife is several years younger than her husband. She is a successful businesswoman with a high income. Her husband retired early and has his health insurance through her workplace plan.

In his situation, if he enrolls in Medicare, their joint income would make him subject to a special additional Medicare tax known as the IRMAA (Income-Related Monthly Adjustment Amount). Depending on income, for a married couple filing jointly, that can add anywhere from $65.90 to $395.60 per month on top of the Part B premium  (currently $164.90). There is also a separate, smaller IRMAA added to the drug insurance premium.

In his case, it would cost far more to go on Medicare than to pay the cost of staying on as a dependent on his wife’s plan. The Medicare rules allow him to choose.

Correct Medicare guidance depends on personal circumstance

However, there are other circumstances where the answer to our initial question gets more complicated. For example, what if you work someplace with fewer than 20 employees? Or, what if you are working and have health insurance that’s not from your job? What if you are self-employed?

Going into all of those scenarios is beyond the scope of this article. However, the Medicare website has a page that explains the rules for when you must enroll upon turning 65.

Another case of bad Medicare advice

Michelle Couch-Friedman (the founder of Consumer Rescue) recently asked me a question about her mother’s situation. Michelle said that her retired mom, who is currently on Medicare, is considering going back to work part-time. But a friend had told her mother that if she goes back to work, she will lose her Medicare coverage and that she should buy private insurance. I told her that someone gave her mom some really bad information.

If you’re on Medicare and go back to work, whether full-time or part-time, it has no effect on your Medicare benefits. You can stay on Medicare with no change in your benefits. If you are eligible for healthcare coverage through the new job and want to take advantage of it, then you can suspend your Medicare Part B by contacting Social Security and then restart it when that coverage ends.

Many sources of bad Medicare information

There are a lot of sources of bad advice about Medicare. The friend I mentioned at the top of this article attended a meeting at her workplace. I suspect the presentation she heard was given by an insurance agent because she was given the impression she had to sign up for the Medicare Advantage plan that is affiliated with her workplace HMO plan. If that’s indeed what she was told, then she got even more bad information.

Michelle’s mom apparently received bad advice from a friend. It was well-intentioned, but it was wrong.

An internet search for Medicare information may not be helpful

Another source of bad Medicare Information is the list of results when you do an internet search on Medicare questions. I’ve done such searches out of curiosity and found that most of the results that come up first don’t always give full and accurate answers. Unfortunately, it’s hard to determine the owners of those sites or their qualifications. Many are websites of insurance plans and brokers who are trying to sell insurance plans.

The latest Artificial Intelligence (AI) chatbots aren’t fully reliable either. I ran two tests asking whether one must enroll in Medicare upon turning 65 and got misleading answers. 

Where to get trustworthy advice about Medicare

Medicare is complicated. So where do you get information you can trust? Here are three resources that are accurate and unbiased:

The official Social Security Administration website

Visit the Social Security Administration website if you are about to enroll in Medicare.

The official Medicare website

Use this site to find and enroll in prescription drug plans. You can use it to find out if a specific medical procedure is covered by Medicare and get answers to many Medicare questions.

Consumer Alert: Be careful about what you type in the address bar on your browser. If you enter something other than Medicare.gov you will likely hit an insurance company site.

The website for the national SHIP program

Visit the State Health Insurance Assistance Program (SHIP) website if you need help understanding what you find on the official Medicare website or in materials you’ve received about Medicare, contact your local SHIP.

SHIP is a government-funded program that provides unbiased help to Medicare beneficiaries, their families, and caregivers. It’s not affiliated with the insurance industry, and the help, just like at Consumer Rescue, comes free of charge. The website has a locator to help you find the SHIP program in your state. You can make an appointment to talk to specially-trained, experienced counselors whose role is to help you navigate the complexities of the Medicare system.

Up next… deciding how to structure your Medicare coverage

One of the most difficult decisions for someone about to enroll in Medicare is whether to go with original fee-for-service Medicare with a Medigap supplement or to choose Part C, also known as Medicare Advantage. Watch for an upcoming article that takes you through the questions to consider so that you’ll make the best choice for your circumstances.

And if you have questions about Medicare, you can send those to the Consumer Rescue helpline, and I’ll answer them in a future article. (Abe Wischnia, Consumer Rescue)

Before you go: Check out Abe’s expert guide to avoiding the latest Medicare scams and fraud.