How do I Defer or Delay Medicare?

At age 65, you can defer enrollment into Medicare by delaying your retirement benefits from Social Security or the Railroad Retirement Board. However, if you get these retirement benefits, you may automatically be enrolled in Medicare Parts A and B. (Enrolling in Medicare)

Most people should enroll in premium-free Medicare Part A, even if they have health insurance from an employer. However, beneficiaries who have health insurance from their (or their spouse’s) current employer can delay Part B enrollment. (CMS.gov)

defer medicare happy senior couple

After you enroll in Medicare Part A, you can sign up for Part B and a Part D drug plan. However, delaying your enrollment in Medicare Part B and D can result in late enrollment penalties.

Medicare Late Enrollment Penalties

Medicare Part B

If you have a Medicare Part B penalty, you’ll have to pay it every time you pay your premium for as long as you have Part B.

Furthermore, the Part B penalty accumulates the longer you defer enrollment. Specifically, your Part B premium goes up 10% for each 12-month period you could have had Part B but didn’t enroll.

Medicare Part D

The Medicare Part D penalty cost depends on how long you did not have creditable prescription drug coverage while eligible for Medicare drug coverage. To calculate your penalty, multiply 1% of the “national-based beneficiary premium” ($43.07 in 2021) by the number of full, uncovered months that didn’t have Part D or creditable coverage. Then, the final amount is rounded to the nearest $.10 and added to your monthly premium.

When to Delay Medicare Enrollment?

Please consult with your employer or union benefits administrator before delaying Medicare enrollment. For instance, you may choose to defer Medicare until after age 65 to get more retirement benefits.

Retirement Benefits

At age 65, you or your working spouse will need to make a retirement decision. If you were born in 1929 or later, you become eligible for social security benefits by paying taxes on earned income for 40 quarters (10 years). After earning 40 credits, you can retire as early as age 62 with reduced benefits. 

However, to get full retirements benefits, you may choose to retire at age 66 or older, depending on your date of birth. For example, if you were born between 1943-1954, you can receive full retirement benefits at age 66. (SSA.gov)

Part A Premiums 2021
You pay Part A premiums if you worked less than 40 quarters.

Discover how you can retire after age 65 and avoid paying Medicare Part B late enrollment penalties.

Can I Delay Part B if I’m Still Working?

You can delay enrollment in Medicare Part B and avoid paying a late enrollment fee if you or your spouse has active health insurance from a current employer and that employer has at least 20 employees. Furthermore, you save the Part B premium, $148.50, in 2021 for most Medicare beneficiaries. Moreover, you can postpone your one-time Medigap Open Enrollment Period so you can purchase this coverage later.

Then you can sign up for Part B during an 8-month Special Election Period (SEP) anytime after your Initial Enrollment Period. If you enroll during SEP a whole month after your employer coverage ends, Medicare coverage will begin on the first day of the following month. We recommend you enroll in Part B before you stop working or your employer coverage ends to avoid a coverage gap. (When does Medicare coverage start and SSA.gov)

However, you only have two full months after the month your employer coverage ends to join a Medicare Advantage or Part D Prescription Drug Plan. (Special Circumstances SEP)

Watch a MedicareBob video to learn when you can defer Part B while still working and avoid a late penalty.