When you turn 65, or are diagnosed with a qualifying disability, you are eligible to sign up for Medicare. Original Medicare is made up of two parts: Part A (hospital insurance) and Part B (medical insurance).

While most people should enroll when they are first eligible, some may choose to delay coverage, specifically Part B coverage. There are a few reasons you would want to do so, but there are also risks. Understanding how delaying or dropping Part B coverage would affect you is important when determining whether or not you should consider it.

Is Medicare mandatory?

While it’s recommended to enroll in Medicare when you first become eligible, it is not mandatory. If you delay enrollment and have creditable coverage elsewhere, there's no late fees. But, if you do not have creditable coverage and a year or more passes, you will have to pay lifelong late enrollment penalties if you ever do sign up for Medicare.

The Centers for Medicare and Medicaid Services (CMS) sets the rules and regulations for who is required or recommended to have Original Medicare coverage. Depending on which type of health coverage you have when you become eligible, you may want to delay enrolling. Or on the other hand, you may be required to enroll in Parts A and/or B in order to keep that coverage.

Please note that, when we say "mandatory," what we mean is that Medicare would legally be considered the primary payer if you don't have creditable coverage. That means that, if you don't have Medicare, you will be responsible for your healthcare costs.

In most cases, you wouldn’t want to opt out of Medicare coverage. Enrolling when you’re eligible can help you avoid late enrollment penalties and gaps in coverage. Even if you don’t want Medicare, you may still get enrolled automatically, especially if you’re already getting Social Security benefits. When you’re first eligible for Medicare, you’re sent a “Welcome to Medicare” packet, which has instructions for dropping Part B coverage.

Note: In some cases, Part A coverage is mandatory. If you do not have to pay a premium for Part A, it’s required to enroll (unless you also give up your Social Security or Railroad Retirement Board (RRB) benefits).

Why would I delay Medicare coverage?

In most cases, you should only decline Part B if you have group health insurance from an employer you or your spouse is actively working at, and that insurance is primary to Medicare, meaning it pays before Medicare does.

Here are a few situations that may apply to you, and what you should do when it comes to enrollment.

If one of the below scenarios is applicable, you may want to consider delaying Parts A and/or B coverage; however, it’s important to work with your group health plan, employer, or other health insurance provider to understand the coverage rules. Ask your plan how it works with and without Medicare, and understand what your options are.

• You’re currently working and have coverage through your job. If your employer has fewer than 20 employees, you should sign up for Parts A and B because Medicare will pay before your other coverage. You may have to pay a Part B late enrollment penalty if you don’t enroll on time, or you may also have a gap in coverage.

If your employer has more than 20 employees, check that you have group health plan coverage. If so, you may be able to delay enrolling in Parts A and B without a late penalty down the road. In this case, you don’t need to do anything when you turn 65.

Once your employment coverage ends, you may:

1. Get COBRA coverage, which continues your health insurance typically for 18 more months.
2. Sign up for Part B coverage within eight months of your employer coverage ending.

If you already have COBRA coverage when you enroll in Medicare, your COBRA will likely end. It will always be secondary to Medicare coverage.

• You have coverage through your spouse, who is currently working. If their employer has fewer than 20 employees, you should sign up for Parts A and B when you’re first eligible because Medicare will pay before your other coverage. You may have to pay a Part B late enrollment penalty if you don’t enroll on time, or have a gap in coverage.

If the employer has more than 20 employees, check that you have group health plan coverage. If so, you may be able to delay in enrolling in Parts A and B without a late penalty. However, how you delay your coverage depends on:

1. If you’ll be getting benefits from Social Security or the Railroad Retirement Board (RRB) for at least four months before you turn 65. In this case, you’ll automatically be enrolled in Parts A and B. If you don’t want Part B, follow the instructions received with your red, white and blue Medicare card. If you keep the card, you keep Part B and must pay Part B premiums.
2. If you won’t be receiving Social Security or RRB benefits at least four months before turning 65, you don’t need to do anything.      

          Once your employment coverage ends, you may:

1. Get COBRA coverage, which continues your health insurance typically for 18 more months.
2. Sign up for Part B coverage within eight months of your employer coverage ending.

If you already have COBRA coverage when you enroll in Medicare, your COBRA will likely end. It will always be secondary to Medicare coverage.

• You have TRICARE and are a retired service member. If you’re eligible for Part A and TRICARE, you must enroll in Part B in order to keep your TRICARE coverage.
• You have TRICARE and are an active-duty service member. If you’re active-duty, or the spouse or dependent child of an active-duty service member, you do not have to enroll in Part B to keep your TRICARE coverage, as long as the service member is on active duty. Before the service member retires, you must enroll in Part B to keep TRICARE coverage.
• You have retiree coverage (from a former employer or spouse’s employer) or COBRA. If the employer has fewer than 20 employees, you should sign up for Parts A and B when you’re first eligible.
• You have Veterans' benefits. In this case, you should enroll in Part A and B when you’re first eligible.
• You have CHAMPVA. You must get Part B to keep your CHAMPVA coverage.
• You have End-Stage Renal Disease (ESRD). If you qualify for Part A, you can also get Part B, though whether or not you enroll in Part B is up to you. However, you must have both Parts A and B to receive full Medicare benefits, including those that cover certain dialysis and kidney transplant services. You can enroll in Part B without paying a late enrollment fee if you apply for Medicare and are approved based on your ESRD status.
• You have Marketplace or other private insurance. Even if you have private insurance, if you’re eligible for premium-free Part A, you should enroll in both Parts A and B. Then, you should drop your other insurance so it stops when your Medicare coverage starts.

If you have Marketplace coverage and are getting reduced premium or tax credit, it will stop once your Part A starts since you no longer need this coverage. However, if you get tax credits to help pay your Marketplace plan premium after Part A starts, you may have to pay those credits back when you file taxes.

If you are not eligible for premium-free Part A, you may stay in the Individual Health Insurance Marketplace for coverage as it may cost less than Medicare coverage.

If none of the above situations apply to you:

• You may face a late enrollment penalty if you do not enroll in Part B when eligible. Your monthly premium may go up 10% for each 12-month period you could have had Part B but didn’t. In most cases, you’ll have to pay this penalty each time you pay your premiums for as long as you have Part B, and it could increase the longer you go without coverage. This is a life-long penalty.
• You may also face a gap in coverage, so if something happened to you and you had to go to the doctor or hospital, you would not have insurance coverage and have to pay 100% of the costs out-of-pocket.

How to opt out of Medicare Part B

If you’ve reviewed your situation and have decided you do not want Part B, you are able to delay or drop the coverage.

• If your Medicare coverage hasn’t started yet, there are two ways to delay or drop Part B coverage.

1. If you were automatically enrolled in Parts A and B and sent a red, white and blue Medicare card, you will have received instructions that come with the card for dropping Part B. Be sure you send the card back. If you keep it, you will keep Part B and be required to pay Part B premiums
2. If you signed up for Medicare through Social Security, you must contact Social Security.

• If your Medicare coverage has started already, you must contact Social Security for instructions on how to submit a signed request to drop Part B coverage.

In most cases, this requires filling out Form CMS 1763 and completing an interview with a representative from Social Security. In this interview, the representative will be sure you understand the consequences of dropping Part B, as well as help you do so. Your coverage will end on the first day of the month after Social Security gets your request.

What happens when I drop Part B?

If you follow the above steps and delay or drop Part B coverage, this means you are relying on your existing group health plan or private coverage for medical insurance. You will not have to pay Part B premiums (or have them deducted from your Social Security or RRB check).

However, there are some cases in which you should carefully consider whether or not to drop Part B. If you have health insurance that is secondary to Medicare, meaning it will pay after Medicare does, and drop Part B coverage, you risk having your insurance plan deny claims that Medicare would have paid for. If this happens, you may have to pay the full cost out of your pocket. You may also face late penalties.

To avoid late penalties and having to pay out-of-pocket, you should consider keeping Part B if:

• You have health insurance you purchased on the open insurance market, not provided by an employer.
• You have health insurance through an employer, but there are fewer than 20 employees.
• You have retiree benefits from a former employer.
• You have health benefits from TRICARE.

What if I want to re-enroll in Part B?

If you change your mind, you may re-enroll at a later time. Keep in mind you may have to pay late enrollment penalties if you didn’t have appropriate coverage in place. In some cases you may be able to re-enroll online, though if you have Part A and not part B, you must print, sign and submit new forms.

In some cases you may need to prove you had adequate employer-sponsored or other coverage to avoid penalties. Once this happens, you’ll be granted a “special enrollment period” so you can re-enroll. During this time, you may also be able to add Part D drug coverage, Medicare Advantage or Medigap coverage as well.

What do Medicare Parts A and B cover?

Part A, which in most cases is free, covers:

• Inpatient care in a hospital
• Skilled nursing facility (SNF) care
• Nursing home care (excluding custodial or long-term care)
• Hospice care
• Home health care

In 2024, the deductible for Part A is $1,632.

Part B, which has a standard premium of $174.40 in 2024, covers medically necessary services and preventive services such as:

• Durable medical equipment (DME)
• Inpatient and outpatient mental health services
• Lab tests
• Diagnostic screenings
• Ambulance transportation

In 2024, the deductible for Part B is $240.

What is Medicare’s enrollment period?

The first time you enroll in Medicare, it’s called your “initial enrollment period.” This typically begins three months before the month you turn 65, and ends three months after the month you turn 65. This gives you a total of seven months to determine whether or not you’d like to enroll.

Most people enroll in Medicare Part A when they turn 65 even if they have a health insurance plan from an employer. This is because if you’ve paid Medicare taxes while working (typically for 10 years), you do not have a premium for Part A.

Most people also enroll in Part B when they turn 65, unless one of the previously discussed scenarios applies to them.

If you receive benefits from Social Security or the RRB for at least four months before you turn 65, you will automatically be enrolled starting the first day of the month you turn 65. If you are not receiving these benefits, you must submit an application with Social Security to get Parts A and B.

Once your Parts A and B begin, you will have Original Medicare health coverage. While there are other forms of coverage, such as Medigap, Medicare Advantage plans, and Part D prescription drug coverage, there are only certain times during the year when you can enroll in this additional insurance, and enrollment periods may vary. However, you can enroll in any additional plans during your initial enrollment period.

Additional resources

• ClearMatch Medicare: Find a Medicare Plan
• Medicare.gov: Special Election Periods