You do not have to take Medicare benefits at 65, but you must sign up or face penalties

Turning 65 does not automatically enroll you in Medicare. You have to take action — either to sign up or to tell Medicare you are declining coverage. If you do neither, you will owe a penalty on your premiums for as long as you have Medicare, even if you sign up years later. The penalty is permanent and does not go away.

The rule has one major exception: if you are still working and covered by your employer's health plan, you can delay signing up without penalty. But you have to tell Medicare this is why you are not enrolling, and you have to do it during a specific window. Missing that window costs you money.

Key Takeaways

  • You must sign up for Medicare during the seven-month window around your 65th birthday, or you will owe a penalty for life.
  • If you are covered by an active employer plan, you can delay without penalty, but only if you tell Medicare in writing during your enrollment window.
  • Part A (hospital insurance) has no monthly premium for most people, but Part B (doctor visits) costs money and the penalty for late signup is 10 percent per year you delay.
  • The enrollment window is three months before your birthday month, your birthday month itself, and three months after — seven months total.
  • If you miss the window and do not have employer coverage, you can only sign up during the general enrollment period (January 1 to March 31 each year), and the penalty will already be in effect.

The enrollment window and what happens if you miss it

Your Initial Enrollment Period runs for seven months: three months before the month you turn 65, the month itself, and three months after. If your birthday is June 15, your window opens March 1 and closes September 30. During this window, you can sign up for Medicare with no penalty, no matter what your health is or what coverage you had before.

If you do not sign up during those seven months and you do not have a valid reason to delay, you will owe a late enrollment penalty on Part B (medical insurance) for as long as you have Medicare. The penalty is 10 percent of the Part B premium for each full 12-month period you were may be able to access but did not sign up. If you wait three years to enroll, you owe 30 percent extra on top of the regular premium. That extra amount never goes away, even if you move to a different plan.

Part A (hospital insurance) also has a late penalty — 10 percent per year — but only if you do not have 40 quarters of work history under Social Security. Most people do, so they do not owe a Part A penalty. Check your work record at ssa.gov to be sure.

When you can delay without penalty: employer coverage

If you are still working at 65 and your employer offers health insurance, you can delay Medicare Part B without penalty. This is called creditable coverage. The same rule applies if you are covered under your spouse's employer plan. You do not have to take Part B until you leave that job or lose the coverage.

The catch: you must tell Medicare during your Initial Enrollment Period that you are declining because of employer coverage. You do this by submitting a form or letter to your local Social Security office. If you straightforward do nothing and assume you can sign up later without penalty, you are wrong. Silence counts as a missed important date. You have to actively say "I have employer coverage and I am not signing up."

When you do leave the job or lose the coverage, you have eight months to sign up for Part B without penalty. This is called your Special Enrollment Period. The clock starts the month after your coverage ends. If you miss this eight-month window, the late penalty kicks in again.

Part A versus Part B: which one you must take

Part A covers hospital stays, skilled nursing, hospice, and home health. Part B covers doctor visits, outpatient care, and tests. They are separate, and the rules for delaying them are different.

Most people do not owe a monthly premium for Part A because they paid into it through payroll taxes while working. You can delay Part A without penalty if you have employer coverage, just like Part B. But if you do not have employer coverage and you delay Part A, you owe a 10 percent penalty per year — the same as Part B — unless you have 40 quarters of work history, in which case you do not owe a penalty at all.

Part B always costs a monthly premium (the amount changes each year based on your income). If you delay Part B without a valid reason, you owe the 10 percent annual penalty. If you delay Part A without a valid reason and you do not have 40 quarters of work history, you owe the same penalty. Most people should sign up for both during their Initial Enrollment Period to avoid any penalty.

How to sign up during your enrollment window

You can sign up for Medicare three ways: online at Medicare.gov, by phone at 1-800-MEDICARE (1-800-633-4227), or in person at your local Social Security office. Online is fastest — you can complete it in about 10 minutes if you have your Social Security number and information about any current coverage you have.

Have these documents ready: your Social Security number, your birth certificate or passport, proof of citizenship or legal residency, and information about any health coverage you currently have (employer plan, Medicaid, VA benefits, or other). If you are signing up for Part B, you will also need to know your income for the previous year, because your premium may be higher if your income is above a certain level.

If you are declining Part B because you have employer coverage, you will need to provide proof of that coverage — usually a letter from your employer's benefits department or a copy of your insurance card. Some Social Security offices will accept a phone call to your employer to verify, but it is safer to bring written proof.

What happens if you miss the important date and have no employer coverage

If your Initial Enrollment Period has passed and you do not have employer coverage, you cannot sign up for Medicare until the next General Enrollment Period, which runs January 1 to March 31 each year. Your coverage will not start until July 1 of that year. This means if you miss your Initial Enrollment Period in September and do not sign up until February, you will have a gap in coverage from October through June.

During that gap, you are uninsured. You are also building up a late penalty that will be added to your Part B premium when you finally do sign up. If you do not sign up until the following year's General Enrollment Period, you will have missed two full years of enrollment, and your penalty will be 20 percent on top of the regular premium.

There is one exception: if you have a Special Enrollment Period because you lost employer coverage, left the country, or had another may have access to event, you can sign up outside the General Enrollment Period without penalty. may have access to events are limited — losing a job, losing Medicaid, moving out of your plan's service area, or having your employer plan end. Turning 65 without signing up is not a may have access to event.

Declining Medicare entirely

You can choose not to take Medicare at all, but you have to tell Medicare this is your choice. You do this by submitting a form (CMS-L564) to your local Social Security office or Medicare office. This form says you are declining Medicare and you understand you will not be covered.

If you decline and then change your mind later, you can sign up during a General Enrollment Period, but you will owe the late penalty. The only way to avoid the penalty is to have had a may have access to event (like losing other coverage) that gives you a Special Enrollment Period.

Most people should not decline Medicare. Even if you have other coverage, Medicare often pays as a secondary insurance and can save you money. Talk to your current insurance provider before you decide to decline.

Frequently Asked Questions

Can I sign up for Medicare after 65 without a penalty?

Only if you have a may have access to reason. If you were covered by an employer plan, you have eight months after you lose that coverage to sign up without penalty. If you had another may have access to event (like losing Medicaid or moving out of your plan's service area), you may have a Special Enrollment Period. Otherwise, you can only sign up during the General Enrollment Period (January 1 to March 31), and the late penalty will explore.

What if I turn 65 while I am still working?

You can delay Part B if your employer offers health insurance and you are enrolled in it. You must tell Medicare in writing during your Initial Enrollment Period that you have employer coverage. When you leave the job, you have eight months to sign up for Part B without penalty. Part A has no premium for most people, so many choose to take it at 65 even while still working.

Does my spouse's employer coverage let me delay Medicare?

Yes, if you are covered under your spouse's plan. You can delay Part B without penalty as long as you are enrolled in that coverage. You must notify Medicare during your Initial Enrollment Period that you have creditable coverage. When the coverage ends, you have eight months to sign up without penalty.

What is the late penalty, exactly?

For Part B, it is 10 percent of the standard premium for each full 12-month period you were may be able to access but did not sign up. If you delay three years, you owe 30 percent extra on top of the regular premium every month for life. Part A has the same penalty structure, but only if you do not have 40 quarters of work history under Social Security.

Can I get the late penalty removed if I sign up later?

No. The penalty is permanent and does not go away. It is added to your premium every month for as long as you have Medicare. This is why signing up during your Initial Enrollment Period, even if you do not plan to use Medicare right away, is important.