Sign-up For Medicare at 65 to Avoid Costly Penalties

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September 25th, 2013

If you file for Social Security benefits at 66, the Full Retirement Age (FRA), then you will be enrolled in Medicare automatically.  This makes things easy.  But, if you're not ready for Social Security, you don't want to make the costly mistake of waiting on Medicare, too!

The rewards of working past 66 are well-known and often discussed.  For example, some people retire as early as 62, which results in a permanent reduction of SS benefits.  Other people retire after they turn 66, which results in a permanent increase of benefits for every full year they wait.  But the hidden penalties you face for holding off on Medicare complicate things.  Your decision regarding Social Security should not necessarily drive your decision regarding Medicare enrollment.

For starters, you should know that most seniors pay $99.90 per month for Medicare Part B outpatient coverage.  But that amount can jump significantly if you wait.  Each 12-month period you wait after your eligibility begins, the premium you pay increases by 10%.  This increase is permanent.

The trick then is to wait for Social Security, but to file independently for Medicare.  That way, you get the increase in Social Security benefits (more money for you) without the increase in Medicare premiums (also more money for you).

You can apply for Medicare independently of Social Security by using the services of the Social Security Administration (SSA).  The SSA handles both forms of enrollment, but that doesn’t mean you have to get both at the same time.  To get the best of both worlds, you should apply for Medicare within the window of either three months before or three months after you turn 65—your first year of eligibility.  You can apply in person at your local SSA office or by visiting  

The way this works is fairly simple.  If you are still employed, you can keep your employer-provided insurance plan.  If your employer has more than 20 workers, then the employer plan is your primary medical coverage.  If your employer has fewer than 20 workers, then Medicare is your primary medical coverage.  Either way, you can keep both forms of coverage while you work.

There is one catch.  If you are working and you apply for coverage, there may be a surcharge.  These charges are levied on individuals with $85,000 or more in annual income or $170,000 or more for joint filers.  Those in the lowest of the income brackets where a surcharge is applied will pay $480 more per year for their coverage.  You should also check with your employer to learn whether or not the coverage they provide is as good as or better than Medicare Part D, as that will impact your application decision.  In fact, you may want to consult with both your employer and a local SSA representative before you make any final decisions about Social Security or Medicare.  But you definitely don’t want to wait until these penalties kick in.


Miller, Mark. (January 20, 2012.) “Big penalties await those who delay Medicare filing.” Reuters:

Miller, Mark. (January 18, 2012.) “To maximize retirement benefits, know the rules.” Reuters: