Is Medicare Mandatory at 65 If You’re Still Working?

Why to delay Part B. People with access to employer-based health insurance often wait to sign up for Medicare Part B while they’re still working. That way, they don’t have to pay premiums for both Medicare and employer coverage.

Part B premiums cost $202.90 a month in 2026 and are projected to rise to $209.50 in 2027. High earners pay more.

If you choose to enroll in both a large-employer group plan and Medicare Part B, your employer insurance is always primary. So unless your workplace insurance doesn’t cover much, you could be paying monthly Medicare premiums with little or no return.

When your work coverage ends, you’ll have up to eight months to enroll in Part B without penalty.

Medigap also might be affected. If you sign up for Part B while you still have insurance from a large employer, you may have a difficult time getting a Medicare supplement policy, also called Medigap, after that employer coverage ends.

You have a right to buy any Medigap policy available in your state regardless of your health within six months of enrolling in Part B when you’re 65 or older. But if you signed up for Part B while working for a large employer and don’t buy a Medigap policy until after those six months have passed, insurers in most states can reject you for coverage or charge more because of a preexisting health condition, except in special circumstances.

You can’t buy Medigap before you enroll in Part A and Part B.

At a small firm, you may be vulnerable to coverage gaps

Even though most people work at establishments that Medicare considers large, all but about 2 percent of U.S. businesses have fewer than 20 employees. That’s Medicare’s definition of a small business.

An employer with fewer than 20 people may continue to cover workers and their spouses after they turn 65. But in most cases Medicare becomes the primary payer, and the employer plan pays second.

Health insurance is expensive, and federal law allows small businesses to make that choice. But if you fail to sign up for Medicare during initial enrollment around the time you turn 65, you essentially will be left with no coverage.

Never guess. If you work for a business close to that 20-employee threshold, always ask if your work insurance will continue once you or your spouse turns 65. If it has fewer than 20 workers, the answer will almost always be “Enroll in Medicare.”

Tallying the number yourself can be tricky. Part-time, seasonal and temporary workers generally count, but owners and independent contractors don’t.

If your small employer says its plan will remain your primary coverage after age 65, ask for that confirmation in writing. Keep it in case you need it.

Why it matters. If you don’t sign up for both Medicare Part A and Part B during your initial enrollment period, you could be left without primary coverage. Your workplace plan becomes secondary and won’t step up to pay in the absence of Medicare.

You could be on the hook to pay thousands of dollars of medical bills out of your own pocket. If you wait more than 12 months to enroll in Part B, you’ll face a lifetime 10 percent penalty for each year you delayed.

If a spouse providing the family’s health insurance is younger than 65, these rules can take everyone by surprise. The employee’s age doesn’t determine whether a small business’ insurance pays first; the age of the person insured does.

Think you delayed Medicare by mistake? Contact your State Health Insurance Assistance Program (SHIP) for free, one-on-one counseling in your area and help understanding your options.

How to approach Medigap. When Medicare is your primary insurance and the employer plan is secondary, you have a guaranteed issue right to buy a Medigap policy within 63 days of losing that coverage, regardless of preexisting conditions.

Signing up for Part B when you also have health insurance at a small company is not only important but also necessary to help pay for doctor visits and other services. It won’t jeopardize your chances of buying a Medigap policy after your employment ends.

ACA, COBRA, retiree plans take a back seat to Medicare

Be cautious if you are relying on one of these types of health insurance as you approach age 65. They’re rarely considered the primary payers, and if you’re not enrolled in the parts you need, most of the bills for your health care or your spouse’s could become your obligation — even if you’ve paid thousands of dollars in premiums.

Affordable Care Act plans. If you have a job that doesn’t offer health insurance, but you’ve bought coverage or qualify for a tax credit through the Affordable Care Act (ACA), sign up for both Part A and Part B of Medicare during your initial enrollment period.

Then drop your ACA plan to avoid an overlap in coverage. Once you’re eligible for premium-free Part A (generally at age 65), you won’t qualify for any subsidy to pay your monthly premiums.

If your insurer continues to receive subsidy payments on your behalf, you may have to repay that money when you file your tax return.

If you have to pay a premium for Part A, you can choose among ACA plans and Medicare. But if you’re not eligible for a subsidy, you may find paying for Medicare Part A and Part B less expensive than even the cheapest bronze ACA plan as you work toward 40 quarters to qualify for zero-dollar Part A premiums.

If you’re leaning toward Medicare:

• Choose a prescription drug plan that meets your needs to avoid any Part D penalty.
• Buy a Medigap plan within the first six months if you choose original Medicare.
• Confirm that a Medicare Advantage plan has your doctors in its network and your meds in its formulary.

If you qualify for a premium subsidy, take that into consideration as you make a choice. Once you sign up for Medicare, even just for Part A with a premium, you become ineligible for an ACA subsidy.

For help with this complicated Medicare enrollment decision, talk to a SHIP counselor in your state or territory.

COBRA. The Consolidated Omnibus Budget Reconciliation Act, better known as COBRA, allows workers to continue employer health insurance for up to 18 months after a job ends.

But COBRA isn’t the same as coverage from active employment. When you become eligible for Medicare, COBRA generally becomes secondary, similar to a health plan from a small employer.

So you’ll still need to sign up for Medicare during your initial enrollment period, even if you decide to continue COBRA. To postpone Medicare and qualify for a special enrollment period later, you or your spouse must be actively working for the employer that provides the health insurance.

Retiree health insurance. If you left a longtime job before age 65 but are still working elsewhere, you may be depending on this type of insurance plan to cover your health care needs. But you’ll likely find that the rules change when you reach Medicare age.

Each company is different, so check with your former employer. But the trend toward retiree health benefits is declining, down from 66 percent of large firms in 1988 to 27 percent in 2025, according to KFF, a health policy nonprofit that tracks this information.

The details are important:

• Some plans may function like Medigap or Part D and let you use retiree coverage instead of buying that insurance separately.
• Other companies have contracted with a Medicare Advantage plan, so you may have dental, hearing and vision benefits but face restrictions on doctors or hospitals where you can get care.

Much of the time, you’ll have to enroll in Part A and Part B because retiree coverage might not pay your medical costs otherwise. Medicare pays first and a retiree plan is secondary but might give you extra benefits.

Tricare. If you’re a military retiree who wants to continue your government insurance after you’re 65, you’ll have to sign up for Medicare. Otherwise, your military health care benefits will end the first day of the month you turn 65.

If you or your spouse has not worked long enough for you to qualify for premium-free Part A, you’ll have to visit a military card office to get your Tricare eligibility records updated so you won’t be cut off. Very few people fall in this category because military personnel have Medicare taxes deducted from their pay.

When you enroll in Part A and Part B, your Tricare coverage will automatically transform into Tricare for Life. This new plan will function like Part D and Medigap policies with extra benefits, such as overseas care, without additional premiums.

You will need to pay your monthly Medicare Part B premium. If you want dental and vision benefits, you can buy a policy through the Federal Employees Dental and Vision Insurance Program.

Veterans Affairs health care. The Veterans Affairs (VA) system uses doctors, clinics and hospitals separate from Medicare. You won’t lose VA coverage when you turn 65, but signing up for Medicare during your initial enrollment period will ensure you’re covered for any services you receive outside the VA.

If you delay enrolling, you could face lifelong Part B penalties because VA care is not based on current employment. The VA’s prescription coverage is considered creditable, as good as or better than a basic Part D plan under Medicare, if you want to postpone Medicare Part D; however, if you buy a Part D plan, you’ll be able to use it for medicine from doctors outside the VA system. 

Workers’ compensation. Here’s where your health needs get placed into two buckets: care associated with your workers’ comp claim and everything else.

Your workers’ comp insurance pays first for drugs or services related to your on-the-job injury. But since that’s not all the health care most people require, you may need to sign up for Medicare at age 65, or if you or your spouse is still working, make sure that you’re on a plan from a large company to pay for the rest of your medical needs.

Medicare may make what it calls a conditional payment to save you from using your own money to foot a bill, but it will want to be repaid from any future judgment you receive. If you’ve been paid a settlement for your workers’ comp claim, be sure to use that money to pay only for future medical expenses related to your injury or illness that Medicare would otherwise cover.