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A common question people planning to work past the age of 65 ask is, “Should I sign up for Medicare now or delay coverage until I retire?” The answer depends on your situation and: 

  • The size of your company
  • Medicare requirements for your company
  • If the prescription plan you currently have is deemed creditable:
    • If you have another source of drug coverage, through a current or former employer or union, you don’t have to sign up for Medicare Part D as long as the other coverage is at least as good as the new Medicare drug benefit. 
    • If it is not considered creditable coverage, then you will need to sign up for Medicare Part D during your initial Initial Enrollment Period. Your 7-month Initial Enrollment Period usually begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65. 

The wrong decision can result in Medicare late enrollment penalties, which are added to your monthly premium costs. You should always contact the employer or union benefits administrator of the plan covering you before delaying Part A, Part B, and Part D to find out how your insurance works with Medicare. You may be required to enroll in Medicare to get your full coverage. 

We’ve provided some general information based on your situation to help you make the right decision and avoid Medicare late enrollment penalties.


What You Need to Know

You or your spouse:

  • Are still working at a job that has more than 20 employees and
  • Have health insurance from that job or union

Medicare Part A, Hospital Insurance 

If you don’t have to pay a premium for Part A, then you should sign up during your initial enrollment period since there is no cost to you.  

  • If you or your current or former spouse have worked and paid Medicare taxes through payroll deductions for at least 10 years, then you both qualify for Medicare Part A at age 65 at no cost to you

If you have to pay a penalty for Medicare Part A, you may want to delay enrollment

Medicare Part B, Medical Insurance

You can wait until you or your spouse stop working or lose your health insurance if that happens first, to sign up for 

Part B, and you won’t pay a late enrollment penalty. 

You or your spouse:

  • Are still working at a job that has fewer than 20 employees
  • Have health insurance from that job or union

Ask the employer or union that provides your health insurance if you need to sign up for Part A and Part B when you turn 65. If you don’t sign up for Part A and Part B, your job-based insurance might not cover the costs for services you get, so it’s important to talk to them. 

If you are able to delay enrollment, wait until you or your spouse stop working or lose your health insurance to sign up for Medicare, and you won’t pay a late enrollment penalty.

You or your spouse are still working and have health insurance, but it’s not from a job (like Medicaid or the ACA marketplace)

You cannot stay enrolled in an Affordable Care Act) ACA marketplace plan once you are eligible for Medicare. 

Medicaid laws vary by state, so you will need to check. 

The rules vary depending on what other type of health insurance you have, so reach out to your insurer. 

You are still working and are self-employed or have health insurance that’s not available to everyone at the company

Ask your insurer if your coverage is employer group health plan coverage as defined by the IRS. If it’s not, sign up for Medicare when you turn 65 to avoid late enrollment penalties.

If you have retiree coverage from a previous job, it may not pay for your health services if you don’t have both Part A and Part B. Ask your benefits administrator how your retiree coverage works with Medicare.

You have COBRA coverage and haven’t signed up for Medicare yet

Sign up for Medicare when you turn 65 to avoid gaps in coverage and late enrollment penalties. Your COBRA will probably end once you sign up.

Don’t wait until your COBRA coverage ends to sign up for Medicare or you could have to pay penalties. 

Get more information about COBRA and Medicare.

You’re still working and you (or your spouse) get a money from an employer to buy your own health insurance Generally, Medicare doesn’t work with your insurance. Ask your health insurance company if you need to sign up for Part A, Part B, and Part D when you turn 65.
You’re still working, but don’t have any health insurance

Sign up for Medicare during your initial enrollment period. If you don’t, you will face penalties when you do enroll. 

If you can’t afford insurance there are ways to get help paying costs.


Medicare Late Enrollment Penalties

  • The Medicare Part A late enrollment penalty may raise your monthly premium by as much as 10% for twice the number of years you didn’t sign up. This applies to people who are not eligible for premium free Medicare Part A. 
  • The Medicare Part B late enrollment penalty will add an extra 10% to your monthly premium for each year you could have signed up for Part B, but didn’t.
  • The Medicare Part D late enrollment penalty will pay an extra 1% for each month — that’s 12% a year — if you:
    • Don’t join a Medicare drug plan during your initial enrollment period 
    • Go 63 days or more without creditable drug coverage

To avoid paying any penalties, talk to your or your spouse’ employer or union about the coverage you currently have to make sure it is creditable and does not require you to sign up for Medicare.

American Exchange Can Help

After you get the information about your current plan, call American Exchange. Our licensed Medicare experts can help you decide if you can delay Medicare without future penalties. We can also help find the right plan for you based on your health, medications, and budgetary needs. We do not work for an insurance company, so we compare all plans available in your area at no cost or obligation to you. And you can call us throughout the year if you have questions. Contact us today.


View our Medicare webpage

Our Medicare experts are available to help you:

Monday through Friday from 8:00 a.m. to 5:00 p.m.

Schedule an Appointment

Additional Medicare Resources

We publish a Medicare blog on the 4th Tuesday of every month, and more frequently during Medicare’s Annual Enrollment Period. Be sure to read our Medicare blog posts or flyers to better understand your coverage.


Medicare Disclaimer: We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact or 1-800-MEDICARE to get information on all of your options.

American Exchange is a licensed health insurance broker. Robert Huffaker, NPN 13568432

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