Can I Still Get Medicare if I Work Past 65?

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With seniors staying on the job later in life and the 65-and-older age group poised to become the fastest-growing segment of the workforce by 2024,[1] many may wonder if it’s possible to continue working and still enroll in Medicare.

The short answer is yes. Employed or not, you’re eligible for Medicare Part A (hospital insurance) and Part B (medical insurance) once you turn 65, assuming you’re an American citizen, permanent legal resident, worked at least 10 years and paid Medicare taxes during that time.

Accessing both Part A and B benefits can make sense if your current workplace insurance is inadequate, if you’re self-employed, a 1099 contractor or working part-time. But what if you’re happy with your existing employer-based coverage and expect it to keep working for several more years?

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Putting off Medicare While Covered at Work

Since Part A is free for most people, there’s no downside to signing up during the initial enrollment period (which begins three months before you turn 65), even if you’re still covered through your employer. As for Part B, if you like your existing coverage, your company employs 20 or more people, you don’t need to enroll and can stay with your company coverage for as long as you’re employed. When you do retire, you’ll be able to sign up for Part B without penalty through a Special Enrollment Period.

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Beware the late enrollment penalty

But let’s say you have insurance through a company that employs fewer than 20 people. Here’s where it gets a bit tricky: You’ll still need to sign up for Part B during the initial enrollment period, since Medicare will be considered your primary source of coverage once you turn 65.

This is critically important, because failure to sign up for part B once you’re eligible (if you’re retired, unemployed or working for a firm with fewer than 20 people) can have long-lasting financial consequences. Specifically, you’ll be assessed a late enrollment penalty for as long as you have part B.  

The penalty adds 10 percent to your monthly Part B premium for each year that you could have enrolled in Part B but did not. So, for example, if you were eligible for Part B in July 2015 but did not enroll until January 2018, you’d be hit with a 20 percent late enrollment penalty. This would increase your premium by 20 percent effectively for the rest of your life. With the standard Part B premium at $135.50 per month in 2019, a 20 percent penalty would cost you and extra $325 a year, or $27 a month.

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Do your homework

Deciding whether to continue with employer-based coverage or shift to Medicare once you’re eligible comes down to determining which option provides the best coverage at the most reasonable cost. You may want to speak with your company’s benefits administrator for help in making that determination.

Whichever choice you make, it pays to do your Medicare homework well before you turn 65. A solid understanding of Medicare’s costs and benefits, as well as how and when to enroll, will help you make the best health insurance decisions -- today and in the future.  

[1] Mitra Toossi, Elka Torpey, “Older workers: Labor force trends and career options,” Bureau of Labor Statistics, May 2017

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