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Over 65 and Still Working: What About Medicare?

Category: Medicare

March 26, 2022 — Signing up for Medicare presents a lot of anxiety for most people. When do you have to apply, how do you do that, what does it cost, what is covered, and what’s with all those different parts (Parts A, B, C, D, and more)? But one of the most vexing questions comes for people who hit age 65 and are still employed. What happens if they have health insurance from either their job or a spouse’s employer? We will try to explain how to negotiate these questions in this article.

The easiest way to explain it is by looking at coverage by the various Medicare Parts.

Part A

Medicare Part A (hospital coverage) is free as long as you have been paying into the system for at least 10 years. So you might as well sign up for it as soon as you can for the extra protection it can provide. You are eligible for it 3 months before your 65th birthday. One drawback is you won’t be able to continue in a Health Saving Account (HSA) once you sign up. There is no penalty for not signing up for Part A.

Part B Coverage

Part B of Medicare covers the doctor and other medical expenses you might have. Many larger employers offer that type of coverage to their workers and dependents. If it meets the standards set by Medicare, you do not have to sign up for Medicare Part B (but some plans require spouses to have Part B). Employers with fewer than 20 employers have to meet a different standard (Medicare Part B pays for services first, then your employer’s plan pays), so it important to verify that your insurance meets eligibility standards.

When your employer health coverage ends, you have 8 months to sign up for Part B without incurring a penalty, and you will have to provide documentation about the insurance you had. If you turn 65 and do not have employer provided health coverage, you must sign up for Part B within 7 months, or face penalties for the rest of your life. COBRA coverage doesn’t count. You’ll pay an extra 10% on the premiums for each year you could have signed up for Part B, but didn’t.

You’ll pay an extra 10% on the premiums for each year you could have signed up for Part B, but didn’t.

Part B premiums are based on your past income. The minimum monthly premium is currently $170.10.

Part D (Prescription drugs)

The rules for Part D are similar to those for Part B. You must have “creditable” prescription drug coverage (usually provided by an employer) when you turn 65, or face penalties. You will pay a monthly premium depending on your income and the type of plan you choose. Like Part B, there is a penalty for late sign up (in this case 1% for every month you were not covered), and that penalty persists for the rest of your life. So, if you are 65 and employed, check with your organization to make sure you have “creditable” drug coverage. If not, to avoid future penalties, sign up within the initial enrollment period for a Part D plan that meets your needs and budget.

For further reading:

Working and Medicare –

What Is Your Medicare IQ?

Signing up for Medicare Is Tricky If You Are 65 and Still Working

Posted by Admin on March 26th, 2022


  1. you must sign up for Part B within 7 months, or face penalties for the rest of your life.

    This is harsh.

    by jeff chanton — April 7, 2022

  2. Medicare. Mind the gap. There are really crazy rules about transitioning to Medicare. Perhaps the craziest is that if you’re on a COBRA plan it doesn’t count as having insurance. Thee are also silly rules about timing your retirement.

    by Stephen Lange — April 8, 2022

  3. Jeff, the penalty does sound harsh. But I think it makes sense. The analogy is that you can’t insure your house after it catches fire (at least the one that burned down). If people wait to be insured until they get sick insurance doesn’t work; it relies on a big pool to cover the costs for the small number that need it. The penalty isn’t huge unless you wait years and years. It is 10% of the premium per month. That would be $17.10/per month extra for most people who delay one year.

    Bottom line: Super important to sign up for Part B on time!

    Stephen: You have 8 months to sign up for Medicare whether or not you choose COBRA, after that you face a penalty when you sign up. Medicare becomes primary coverage even if you have COBRA.

    by John Brady — April 8, 2022

  4. My mother who was always independent and took care of all her expenses, her banking, insurance etc. was lucky enough to be healthy and had taken very few prescription drugs, except for an antibiotic when necessary. So when she applied for Medicare back in the 90’s she skipped the Part D prescription drug coverage. As she reached her mid-80’s and allowed us to help with her paperwork, I called Medicare to ask about the extra charge she was paying every month and they explained it was her penalty for not having Part D for over 40 months. When I asked how long she would pay it, I was told until she dies or gets on Medicaid. So she paid that fee monthly for many many years. Too bad there was no back then and all the great Medicare resources and explanations. I will admit I studied the information on this site as much as I did the Medicare site when it was time for me to apply. Thanks.

    by Jemmie — April 9, 2022

  5. I have full medical, prescription, dental and eye coverage through my husband’s employer. I took my Social Security at age 62 when I retired so at 65 I was automatically sent a Medicare card for both Part A and B. After consulting with two Medicare Advisors and researching the Medicare site – I was advised to drop Part B which I did. But this turn off step was not easy as phone calls to our local Social Security office insisted I would be penalized. Their information totally conflicted with the Medicare website and what the Medicare Advisors told me. No wonder people get so confused.

    Plus, Medicare Part D does not cover one of my prescriptions. I have far better medical coverage with my husband’s employer healthcare plans which is my Primary coverage. When he retires we will get all the necessary documents from HR and I will apply for the additional Medicare plans. Then we will see if they give me a hard time and try to penalize me.

    by JoannL — April 9, 2022

  6. My husband and I have lived in Canada for 20 years. We hope to retire to the US next year at ages 68 and 69. Don’t plan to take SS until age 70. An advisor told us to sign up for Part A Medicare when we turned 65. So we did. But did not sign up for Part B because of expense and we couldn’t use it up here anyway. We have the government health insurance and a good supplemental plan for vision, dental, and prescription through my husband’s job. We’re hoping they won’t charge us penalties when we return to US next year.

    by Cam — April 10, 2022

  7. I volunteer for an organization (SHINE) that helps people with Medicare sign-up, applying for low income options etc. We recently have helped two different people who are in your situation. They both live in Canada and only have part A and now want to retire in US. They are both retired and according to Social Security they will have to pay a Part B penalty for every full year they were eligible for Part B. If they were still working, their Canadian insurance would have qualified as “creditable coverage”. I think it was the same for Part D (drug plan coverage) although that penalty is only 1% of the average premium for every month that you were eligible and did not have that coverage.

    You need to get in touch with SS to confirm what I am telling you and see how soon you can sign up for B because that is another issue. You may have to sign up during the general enrollment period and that only runs from January through March for a start in July. So for 2022 that enrollment period is closed.

    Look on -they have a good article about this issue.

    by Roberta — April 10, 2022

  8. Medicare it certainly seems to be the biggest hurdle for anyone retiring. I’ve been reading about those being penalized for not signing for some/all parts when turning 65. Damn doesn’t seem to be a straight forward sign for this part not this etc. Even folks seeking advise from SS or other knowledgeable folks you don’t get the same answer. I worked for State gov, I didn’t retire at 65 but did sign for Medicare for parts A & B though did not start paying until I actually retired almost a year later, I took my State ins. with me which became my secondary & covered my husband also & my State covered a drug plan which was better than SS. Again I was not penalized for anything. Why can’t it be black & white what you need to do, what happens if you do or don’t! And for pete’s sake seems everyone gets different answers, how is anyone to know what they are suppose to do. Sorry I just needed to vent. I’ve never had problems, but I certainly feel for those trying to make decisions in what should be an exciting time for their life.

    by VTRetiree — April 11, 2022

  9. Thank you Roberta. I did hear about SHINE and I will contact them once I know where we will live.

    by CAM — April 11, 2022

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