Generally, an individual enrolls in Medicare when they turn 65 years old. However, a person may choose other healthcare options or opt out of the program.
Medicare is available to United States citizens and long-term residents who are 65 years old or older. In some cases they may be automatically enrolled in the program.
This article looks at Original Medicare and automatic enrollment. It also discusses when and if someone can opt out of Medicare, along with any penalties, and costs.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
What is Original Medicare?
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According to the Kaiser Family Foundation (KFF), over 60 million people are enrolled in Medicare.
Original Medicare includes Part A, hospital insurance, and Part B, medical insurance.
Medicare coverage is based on the following three factors:
both state and federal laws
national coverage decisions made by Medicare
local coverage decisions that Medicare claims processing companies make in each state
Part A covers:
inpatient hospital care
skilled nursing facilities (SNF)
mental and behavioral health
hospice care
nursing home care
home health services
Part B covers:
outpatient services, such as doctor visits
preventive care, such as vaccines
ambulance services
durable medical equipment (DME)
clinical research
oxygen equipment and accessories
mental health and substance use disorders
Individuals with Original Medicare can also choose to enroll in Part D, which offers prescription drug coverage through Medicare-approved private insurance companies.
Some people are automatically enrolled in Original Medicare, while others need to enroll themselves when they become eligible.
Learn more about Original Medicare.
Automatic enrollment in Medicare
A person may be automatically enrolled in Medicare in the following situations:
If a person is under 65 years old and has certain disability benefits, they will be automatically enrolled after receiving benefits for 24 months.
If a person has amyotrophic lateral sclerosis (ALS), they will be automatically enrolled when they start receiving disability benefits.
If a person gets retirement benefits from Social Security (SSA) or the Railroad Retirement Board (RRB), they will be enrolled in Medicare Part A when they turn 65 years old. If they also registered for Part B at the same time as they signed up for the retirement benefits, they will also be automatically enrolled in Part B.
If a person has end stage renal disease (ESRD), they can apply to be enrolled in Original Medicare.
Can I delay enrolling in Medicare?
If a person is not automatically enrolled in Original Medicare, they may be able to delay doing so.
Medicare Part A
If a person qualifies for premium-free Part A, they generally cannot opt out of the coverage. If they choose to do so, they may lose any Railroad Retirement Board retirement benefits and Social Security benefits.
However, if a person does not qualify for a premium-free Part A plan, they will have to pay the premium, which in 2024 is a maximum of $505 each month.
Can I delay enrolling in Part A?
A person can delay enrolling in Part A if they have another type of health insurance coverage, such as COBRA.
However, Medicare may apply a penalty of up to 10% to the monthly premiums if someone delays enrollment.
A person must pay the increased premium for twice the number of years they deferred enrollment. For example, if someone delays enrollment for one year, they will have to pay the increased premium for two years.
Medicare Part B
In 2024, the standard premium for Medicare Part B is $174.70. Some people may have to pay more if their income is above $103,000.
Can I delay enrolling in Part B?
People can delay enrollment in Part B if they have other health insurance coverage. If someone does not enroll when their employment ends or the group health insurance ends, they may have to pay a late enrollment penalty.
If someone delays enrollment, the penalty can be an additional 10% on the Part B premiums for each year of delay.
Read more about Medicare late enrollment penalties.
Do I need to enroll in Medicare at all?
A person does not legally have to enroll in Medicare. Medicare opens enrollment to people when they turn 65 years old if they are a United States citizen or legal resident.
A person can enroll in Medicare before the age of 65 if they have:
a diagnosis of end stage renal disease (ESRD)
a diagnosis of amyotrophic lateral sclerosis (ALS)
received Social Security disability benefits for 24 months
If a person gets Social Security benefits, Medicare enrollment is automatic.
Enrollment periods
Medicare offers several enrollment periods when a person can enroll in Original Medicare.
A person can use this online tool to help find out when they are eligible to enroll and how much their premium will cost.
The Medicare Initial Enrollment Period (IEP) lasts for 7 months. It starts 3 months before someone’s 65th birthday, includes the birthday month, and ends 3 months after.
If someone misses the IEP, they can also enroll during the Open Enrollment Period (OEP), from October 15 to December 7 each year.
Read more about Medicare enrollment periods.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Summary
People can choose to opt out of Medicare, as it is not a lawful requirement. However, people may have to give up certain retirement benefits if they choose not to enroll.
Medicare can also apply late enrollment penalties if people initially opt out of Medicare and then decide to enroll at a later date.
If a person is choosing between two or more health insurance policies, they should check the Medicare rules and restrictions to ensure adequate healthcare coverage.
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