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Should You Apply for Medicare Even Though You're Still Working?


Dear Carrie: I'm turning 65 next year and plan to work for a couple more years. Should I apply for Medicare even though I have coverage through my employer? —A Reader

Dear Reader: This is an important question that affects a growing number of workers. In fact, data from the University of Michigan's Health and Retirement Study, conducted from 2006-2010 and sponsored by the National Institute on Aging, shows some eye-popping trends. According to the study, 79.5 percent of respondents expect to work past age 65, with 65.2 percent expecting to retire by age 80 — and 22.4 percent planning never to retire at all!

Your question is doubly important because while enrollment in Medicare is automatic if you've already filed for Social Security, if you're still working and not receiving Social Security, enrollment is in your hands. And it's not just a question of whether or not you need Medicare coverage right now. You must apply for Medicare within a certain time window to avoid getting hit with a penalty for late enrollment.



Even if you're not receiving Social Security benefits at age 65, you're still eligible for full Medicare benefits. This includes the premium-free Part A (hospitalization), as well as Part B (doctors visits and outpatient care) and Part D (prescription drugs); you pay a premium for each. But it's up to you to contact Social Security to sign up, and you must do this within what's called your initial enrollment period. Generally, this period extends from three months before the month you turn 65, until three months after the month you turn 65 — a seven-month period in total. If you want your Medicare benefits to start right when you turn 65, you have to sign up during the three months before your birthday.

If you miss this initial enrollment period, you may have to wait until what's called the general enrollment period, which runs from Jan. 1-March 31 each year. There are a couple of drawbacks to waiting. First, your benefits won't start until July 1 of the year in which you enroll. And second, you may have to pay a penalty.



The good news is that, in a situation such as yours, you don't have to enroll in all parts at once.

If you have insurance coverage through an employer plan, you can apply for the premium-free Part A only and still meet the enrollment deadline. Part A might help pay for some of the costs not covered by your group plan. And as long as you have group coverage, you won't be penalized for delaying Part B; you can choose to enroll at any time while you're still covered by that plan. When your employment or group coverage ends, you then have eight months in which to sign up.



Whether to enroll in Medicare Part B is a cost/value decision. Monthly premiums range from $99.90 to $319.70, depending on your income and filing status. So your decision to enroll in Part B while you're still working might depend on how much money you're making.

You also need to consider what you're getting. If you work for a company with 20 or more employees, your group health plan is still the primary payer of your medical bills, making your Medicare benefits of limited value.

However, if your company has fewer than 20 employees, Medicare would be the primary payer and your company's plan the secondary payer. In this case, it's best to talk to your employee benefits administrator. The Part B coverage may well be worth the monthly premium.



It's not unheard of for insurance needs to change as people move in and out of the work force. So what happens if you retire, enroll in Part B and then find yourself back at work with employer coverage once again? In this situation, you can drop Part B while working and re-enroll at any time while you have group coverage or during the eight months after your employment ends, without risk of penalty or higher premiums.



For now, I'd mark the dates of your initial enrollment period on your calendar. Then when the time comes, call the Social Security Administration at 800-772-1213 to sign up. You can also go to for more detailed information. No matter how long you choose to work, there's no reason not to take advantage of the benefits you've earned.

Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER(tm), is president of Charles Schwab Foundation and author of "It Pays to Talk." You can email Carrie at This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at




2 Comments | Post Comment
This very helpful and easy to understand. Thanks
Comment: #1
Posted by: Gregg Gardiner
Sun Jan 26, 2014 11:36 AM

I am confused about the late penalty. I plan to move to Mexico when I'm 65 and stay there until my mid-70s, or possibly permanently. I will need Mexican insurance, and I will not need Medicare since Medicare does me no good in Mexico. Yet, on the off chance that I may return at some point when I'm older, I'm told I will have a 10 percent penalty for every year I didn't take Medicare. How much sense does this make? Our government has been asked to provide Medicare to those of us who choose to retire in Mexico, and has taken no action. Since I can't use Medicare there, and I won't be in the US, and I have to buy Mexican insurance, how much sense does it make for me to be double insured? Why is there a penalty under these circumstances? I feel like I am bound to a country I cannot afford to retire in (the US), and am being punished for this by having to pay for insurance I won't be using. Can you explain? Thank you.
Comment: #2
Posted by: Beth Murphy
Tue Nov 25, 2014 2:41 PM
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Carrie Schwab-Pomerantz
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