Why Are You Being Forced Into Medicare at Age 65?

Nearly every American 65 or older is eligible for Medicare, and almost all of them are eligible for Medicare Part A (hospital insurance) with no premiums.

Although about three-quarters of Medicare beneficiaries are satisfied with their coverage, not everyone in this age group wants to receive Medicare. Some individuals feel like they are being forced into Medicare at the age of 65 against their personal wishes.

An older man being examined by his doctor
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Why Are You Forced Into Medicare?

If you or your spouse worked for at least 10 years in a job where Medicare taxes were withheld (including self-employment where you paid your own self-employment taxes), you'll become automatically eligible for Medicare once you turn 65.

Recent immigrants are not eligible for Medicare, but once they've been legal permanent residents for five years and are at least 65, they have the option to purchase Medicare coverage—as opposed to getting Medicare Part A for free—which is the same option available to long-term U.S. residents who, for one reason or another, don't have a work history that gives them access to premium-free Medicare Part A (although most people get Medicare Part A without any premiums, it costs up to $458 per month in 2020 for people who have to buy it because they have few or no years of work history). Note that immigrants who go on to work for at least 10 years in the US do then become eligible for premium-free Part A Medicare if they're 65 or older, just like anyone else who has paid into the Medicare system for at least a decade.

Once you become eligible for premium-free Medicare Part A, you have to enroll in Medicare Part A or you forfeit your Social Security benefits. Most individuals are unwilling to forfeit their Social Security benefits, and thus accept the enrollment into Medicare. Note that you're only required to accept Medicare Part A—which is premium-free if you're receiving Social Security benefits—in order to retain your Social Security benefits. You are allowed to reject Medicare Part B—which has a premium—if you choose to do so, although you could be subject to a late enrollment penalty if you choose to enroll in Part B at a later date. (you'll avoid the late enrollment penalty if you delayed Part B because you were covered under your current employer's health plan or your spouse's current employer's health plan, and the employer had at least 20 employees).

There is a great deal of speculation about why the system is set up in this manner. Perhaps this policy was initially instituted to make it easier for seniors to enroll in Medicare once they reached the age of 65, but was never discontinued when private coverage became more commonplace. Private coverage wasn't as common in the past as it currently is, so many elderly individuals were without health coverage prior to the introduction of Medicare. This presented an issue when they inevitably needed health care.

Regardless of why the system is set up in the manner that it is, the rules are the rules, and they are not very likely to change in the near future.

Some Retiree Health Plans Terminate at Age 65

If you're not yet 65 but are retired and receiving retiree health benefits from your former employer, make sure you're aware of the employer's rules regarding Medicare. Some employers don't continue to offer retiree health coverage for former employees once they turn 65, opting instead for retirees to transition to being covered solely by Medicare. Without coverage from your company, you'll need Medicare to ensure that you are covered for potential health issues that arise as you age.

Retiree Coverage Continuing Past Age 65? You'll Still Need to Enroll in Medicare A and B

Some companies will not cut a retiree off completely at the age of 65, but instead continue to offer supplemental retiree benefits, which can be used in conjunction with Medicare (retirees with this sort of coverage will need to enroll in both Medicare Part A and Part B in order to receive full benefits, as Medicare will be the primary payer in this situation and the retiree health plan will provide secondary coverage). The supplemental retiree health benefits may include prescription drug coverage (which isn't covered by regular Medicare but can be purchased via Medicare Part D if you don't have access to supplemental employer-sponsored coverage), doctor visits, and other outpatient health care. Medicare will be your primary coverage if you're covered under a retiree health plan, with the plan offered by your former employer serving as secondary coverage.

Individual Market Coverage

If you have individual market coverage, purchased in the exchange in your state or outside the exchange, you'll need to contact the exchange or your insurer to ask them to cancel your coverage when you transition to Medicare. Prior to the Affordable Care Act (ACA), individual market insurers typically wouldn't insure anyone over the age of 64, so plans were automatically terminated when people turned 65. That is no longer the case, so enrollees need to make sure that they actively cancel their individual market coverage when they switch to Medicare.

There's no rule that says you have to drop your individual market plan when you enroll in Medicare, although there's generally no reason to keep the individual market plan after you enroll in Medicare. And if you're receiving a premium subsidy to offset some of the cost of your individual market plan, that would end when you turn 65.

Delaying Enrollment Could Result in a Permanent Penalty

As described above, you can't reject premium-free Medicare Part A (hospital coverage) without also giving up your Social Security benefits. But since your work history (or your spouse's work history) is allowing you access to Medicare Part A without any premiums, few people consider rejecting Part A coverage.

The other parts of Medicare, however, do involve premiums that you have to pay in order to keep the coverage in force. That includes Medicare Part B (outpatient coverage) and Part D (prescription coverage), as well as supplemental Medigap plans. Medicare Part C, otherwise known as Medicare Advantage, wraps all of the coverage into one plan and includes premiums for Part B as well as the Medicare Advantage plan itself.

So it's understandable that some Medicare-eligible people, who are healthy and not using much in the way of medical services, might not want to enroll in Part D and/or Part B. Similarly, people who are eligible for Part A but with premiums (i.e., they would have to pay for it because of insufficient work history) might want to avoid enrolling in order to save money on premiums. But before deciding to postpone enrollment in any part of Medicare, it's important to understand the penalties and the enrollment limitations that will apply if you decide to enroll in the future.

There are penalties associated with delaying your Medicare enrollment unless the reason you're delaying is that you (or your spouse) are still working and you're covered by the employer's health plan. If that's the case, you'll be eligible for a special enrollment period to sign up for Medicare when you (or your spouse, if that's where you get the coverage) eventually retire. 

Part A Late Enrollment Penalty

You'd only be subject to a Part A late enrollment penalty if you're not eligible for premium-free Part A coverage. Most Americans don't have to worry about this, as they have at least ten years of work history, or are/were married to someone who does. But if you'd have to pay a premium to buy Part A coverage, there's a penalty if you delay your enrollment.

The penalty is a 10% increase in your monthly premium. In 2020, the Part A premium is $458/month for people with 0-29 quarters (i.e., less than 7.5 years) of work history, and $252/month for people with 30-39 quarters (i.e., between 7.5 and 10 years) of work history. So those premium amounts would increase to $504/month and $277/month, respectively, if you're subject to the late enrollment penalty.

But unlike the penalties for Part B and Part D, the penalty for late enrollment in Part A does not last forever. Instead, you'd pay it for twice as long as the amount of time you delayed your enrollment. So if you were eligible for Medicare for three years before enrolling, you'd have to pay the extra Part A premiums for six years. Keep in mind that the Part A premium changes each year (generally increasing), so the actual amount you'd be paying would vary for each of those six years.

Part B Late Enrollment Penalty

If you delay enrollment in Part B and don't have coverage from a current employer (or your spouse's current employer), you'll be subject to a late penalty when you eventually enroll in Part B. For each 12-month period that you were eligible for Part B but not enrolled, the penalty is an extra 10% added to the Part B premiums. And you'll pay this penalty for as long as you have Part B—which generally means for the rest of your life.

In 2020, most Medicare Part B enrollees pay $144.60/month. So a person who is now enrolled but had delayed their enrollment in Medicare Part B by 40 months would be paying an extra 30% in addition to those premiums (40 months is three full 12-month periods; the extra four months aren't counted). That means they'd be paying roughly an extra $43/month for their Part B coverage, for a total of about $188/month.

Part B premiums generally change each year. Sometimes they stay the same from one year to the next, but the general trend has been upwards over time. So the part B penalty will generally also increase from one year to the next. If you're paying 10% or 30% or 50% more than the standard rates, the dollar amount of that penalty will increase as the standard premiums increase over time.

Part D Late Enrollment Penalty

The Part D late enrollment penalty is similar to the Part B late enrollment penalty, in that you have to keep paying it for as long as you have Part D coverage. But it's calculated a little differently. For each month that you were eligible but didn't enroll (and didn't have other creditable drug coverage, which means it had to be at least as good as standard Part D coverage), you'll pay an extra 1% of the national base beneficiary amount.

In 2020, the national base beneficiary amount is $32.74/month. Medicare Part D premiums vary significantly from one plan to another, but the penalty amount isn't based on a percentage of your specific plan—it's based instead on a percentage of the national base beneficiary amount. Just as with other parts of Medicare, Part D premiums change from one year to the next, and the national base beneficiary amount generally increases over time.

So a person who delayed Medicare Part D enrollment by 27 months would be paying an extra $8.84/month (27% of $32.74), on top of their Part D plan's monthly premium in 2020. A person who had delayed their Part D enrollment by 52 months would be paying an extra $17.02/month. As time goes by, that amount could increase if the national base beneficiary amount increases (although it has gone down in recent years). People subject to the Part D late enrollment penalty can pick from among several plans, with varying premiums. But the Part D penalty will continue to be added to their premiums for as long as they have Part D coverage.

Enrollment Windows Are Limited

If you're thinking about delaying your enrollment in Medicare, keep in mind that there are enrollment windows that apply. After your initial enrollment window ends, you can only sign up for Medicare Part A and B during the general annual enrollment period from January 1–March 31, with coverage effective July 1.

And you can sign up for Part D during the annual enrollment period from October 15–December 7, with coverage effective January 1 of the coming year.

So if you delay your enrollment, you could be paying higher premiums when you eventually do enroll, and you'll have to wait until an open enrollment period in order to have access to coverage. If you're only enrolled in Part A, for example, and you get diagnosed with a serious illness in April, you'll have to wait until the following January to have Part D coverage, and until the following July—more than a year in the future—to have Part B coverage.

Although Medigap plans don't have late enrollment penalties, insurers in most states are allowed to use medical underwriting if you apply for a Medigap plan after your initial enrollment window (when you're first eligible for Medicare) ends. This means they can charge higher premiums or reject the application altogether if your medical history doesn't meet their requirements. There is no annual open enrollment window for Medigap plans, so unless you're in one of a handful of states that have guaranteed-issue rules for Medigap plans, you might be unable to purchase Medigap coverage if you don't do so during your initial enrollment period when coverage is guaranteed-issue.

Keep all of this in mind when you're deciding whether to enroll in the parts of Medicare that have premiums.

10 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. eHealth. Medicare Consumer Survey. February 2019.

  2. Medicare.gov. Medicare Part A Costs.

  3. Medicare.gov. Part B Late Enrollment Penalty.

  4. Centers for Medicare and Medicaid Services. Medicare Secondary Payer.

  5. Centers for Medicare and Medicaid Services. Frequently Asked Questions Regarding Medicare and the Marketplace. August 28, 2014

  6. Medicare.gov. Part A Late Enrollment Penalty.

  7. Medicare.gov. Medicare Costs at a Glance. Medicare Part B (Medical Insurance) Costs.

  8. U.S. Department of Health and Human Services. The Part D Late Enrollment Penalty.

  9. Kouzoukas, Demetrios, Principal Deputy Administrator and Director, Center for Medicare. Centers for Medicare and Medicaid Services. Annual Release of Part D National Average Bid Amount and Other Part C & D Bid Information. July 30, 2019.

  10. Medicareresources.org. Is there a best time to purchase a Medigap policy?

Additional Reading

By Kelly Montgomery
 Kelly Montgomery, JD, is a health policy expert and former policy analyst for the American Diabetes Association.