Medicare Enrollment at 65: Parts, Deadlines, and Penalties

Medicare enrollment looks simple from a distance: turn 65, sign up, done. Up close it is a series of decisions with deadlines attached, and the wrong sequence can cost you money for the rest of your life. A physician working past 65 on a group plan, a business owner with a small staff, a retiree on COBRA, and a spouse covered by a working partner's plan all face different rules about when to enroll.

The stakes are specific. Enrolling in Part B late adds a permanent surcharge to your premium. Missing the Part D window adds another. Waiting too long to buy a Medigap policy can mean being declined because of your health. And funding an HSA while enrolled in Medicare creates a tax problem.

This guide covers each part of Medicare, the enrollment periods at 65, how employer coverage changes the timing, and the Medigap versus Medicare Advantage choice. It is educational rather than individualized advice. The official rules and current premiums live at medicare.gov and change every year, so treat the figures here as a starting point for your own retirement planning.

The Four Parts of Medicare, in Plain Terms

The pieces you choose determine your premiums, your out-of-pocket exposure, and which doctors you can see.

Part A: hospital coverage

Part A covers inpatient hospital stays, skilled nursing care after a hospital stay, hospice, and some home health care. If you or your spouse paid Medicare payroll taxes for at least 40 quarters, Part A has no monthly premium, so there is rarely a reason to delay it unless you are still contributing to an HSA.

Part B: doctors and outpatient care

Part B covers physician visits, outpatient procedures, lab work, imaging, and preventive services. It carries a monthly premium, $202.90 for 2026 at the standard rate, plus an annual deductible and 20 percent coinsurance on most services with no cap. Higher-income enrollees pay more through the surcharge explained in our guide to Medicare IRMAA. Part B is the piece with the most consequential enrollment rules.

Part D and Part C

Part D is prescription drug coverage sold by private insurers under Medicare rules, with an annual cap on out-of-pocket drug costs set at $2,100 for 2026 and indexed each year. Part C, better known as Medicare Advantage, is a private plan that replaces Parts A and B and usually includes Part D, with its own network and cost sharing. You choose between Original Medicare (A plus B, usually with a Medigap supplement and a standalone Part D plan) and Medicare Advantage, not both.

Medicare Enrollment at 65: The Initial Enrollment Period

Your Initial Enrollment Period (IEP) is seven months long: the three months before the month you turn 65, your birthday month, and the three months after. If your birthday falls on the first, the window shifts one month earlier. Enrolling during the three months before your birthday month gives you coverage starting the first day of that month. Enrolling during or after your birthday month starts coverage the first of the following month, which can leave a gap.

If you are already receiving Social Security when you turn 65, you are enrolled in Parts A and B automatically. If you are not yet collecting, and most high earners are not at 65, you must apply through Social Security's Medicare sign-up page, by phone, or at a local office. Applying online takes about ten minutes.

Two other windows exist for people who miss the IEP. The General Enrollment Period runs January 1 through March 31 each year, with coverage starting the month after you enroll, and usually comes with the late penalty. A Special Enrollment Period applies to people who delayed because of employer coverage, described next.

Working Past 65: When Employer Coverage Lets You Delay

This is where most mistakes happen, because the rule turns on facts about your employer.

If you or your spouse are actively working and covered by that employer's group health plan, and the employer has 20 or more employees, the group plan pays first and Medicare pays second. You can delay Part B (and Part D, if the group drug coverage is creditable) without penalty for as long as that coverage lasts. Many people in this position enroll in premium-free Part A anyway, unless they want to keep funding an HSA.

If the employer has fewer than 20 employees, the order flips. Medicare becomes the primary payer at 65, and the small-group plan may pay very little for claims Medicare would have covered. Enroll in both A and B during your IEP even if you keep the group plan. Small business owners and physicians in small practices are the classic cases.

The Special Enrollment Period after employment ends

When the employment or the group coverage ends, whichever comes first, an eight-month Special Enrollment Period opens for Part B. Enroll in the first month to avoid a gap. For Part D, the window is shorter: you have about two months after losing creditable drug coverage to join a plan, and a gap of 63 days or more triggers the Part D penalty.

COBRA and retiree plans do not count

The exception applies only to coverage based on current employment. COBRA, retiree health plans, severance-period coverage, and marketplace plans do not qualify. If you retire at 66, take 18 months of COBRA, and then try to enroll in Part B, you have missed your Special Enrollment Period and you will owe a penalty. Enroll in Part B when you retire, and use COBRA only as secondary coverage. Retiree plans generally require Parts A and B and then pay second, so read the plan documents before assuming you can delay.

The Late Enrollment Penalties, and Why They Are Permanent

Medicare penalties are not one-time fees. They are added to your premium every month for as long as you have coverage.

• Part B: The premium rises 10 percent for each full 12-month period you could have had Part B but did not, unless you qualified for a Special Enrollment Period. Someone who waits three years pays 30 percent more for life, and the penalty grows as premiums grow.
• Part D: The penalty is 1 percent of the national base beneficiary premium for each month you went without creditable drug coverage after your IEP ended. Twenty months uncovered means a permanent 20 percent surcharge. Employer plans must tell you annually whether their drug coverage is creditable; keep those notices.

The HSA trap

You cannot contribute to a health savings account for any month you are enrolled in any part of Medicare, including premium-free Part A. When you apply for Part A after 65, enrollment is backdated up to six months, but not earlier than the month you turned 65, and contributions made during those months become excess contributions subject to tax and penalty. The clean approach is to stop HSA contributions six months before you plan to enroll and prorate the annual limit. IRS Publication 969 covers the details at irs.gov. Money already in the HSA stays tax-free for qualified expenses, including Medicare premiums.

Medigap vs Medicare Advantage: The Real Trade-Offs

Once you have Parts A and B, you have to decide how to handle the 20 percent coinsurance and the lack of an out-of-pocket cap under Original Medicare. There are two paths, and the choice is harder to reverse than most people realize.

Original Medicare with a Medigap supplement

Medigap policies are standardized by letter. Plan G, the most popular for new enrollees, covers nearly everything Original Medicare does not, except the Part B deductible. Plan N has a lower premium and adds small copays for office and emergency visits. Plans C and F are closed to anyone who became eligible for Medicare on or after January 1, 2020. With any Medigap plan you can see any provider in the country that accepts Medicare, with no referrals and no prior authorization. You pay a Medigap premium on top of Part B and buy a separate Part D plan. The standardized plans are described at medicare.gov.

Medicare Advantage

Advantage plans often have low or zero premiums beyond Part B, bundle drug coverage, and add dental, vision, and fitness benefits. In exchange, you accept a network, cost sharing per service, prior authorization for many procedures, and an annual out-of-pocket maximum that can run to several thousand dollars. Plans change networks and benefits every year. For a healthy person who rarely travels, the savings can be substantial. For someone with a complex condition, the network rules matter more than the premium.

Why the first six months are so important

Your Medigap open enrollment period lasts six months from the month you are 65 or older and enrolled in Part B. During that window, insurers must sell you any plan they offer at the standard rate regardless of your health. After it closes, most states, including Georgia, allow medical underwriting, and applicants with a history of heart disease, cancer, or diabetes can be declined or rated up. If you start in Medicare Advantage at 65 and leave within the first 12 months, a trial right lets you buy Medigap without underwriting. After that, switching depends on your health, which is why many advisors suggest deciding on Medigap at 65 if you can afford it.

A Timeline for the Year You Turn 65

Work backward from your birthday month.

• 9 to 12 months before: Confirm whether your employer coverage qualifies for delay. Get the creditable coverage notice for your drug plan. Compare your income from two years earlier against the IRMAA thresholds, and budget using our guide to healthcare costs in retirement.
• 6 months before: Stop HSA contributions if you will enroll in Part A at 65. Request Medigap quotes from several insurers; premiums for the same lettered plan vary widely.
• 3 months before (IEP opens): Apply for Parts A and B at ssa.gov unless you are delaying for employer coverage. Choose a Part D plan using the Medicare Plan Finder with your actual prescriptions entered.
• Birthday month: Coverage begins on the first. Drop other coverage only after Medicare is active.
• Every fall (October 15 to December 7): Review your Part D or Advantage plan during the Annual Enrollment Period, because formularies and premiums change every year.

Medicare enrollment rewards people who start early and understand which rules apply to their employment situation. Confirm whether you can delay, mark the seven-month window on the calendar, stop HSA contributions in time, and make the Medigap or Advantage decision while the guaranteed-issue window is open. For help fitting Medicare premiums and the timing of your retirement into one plan, reach out to Attend Wealth.

Tony Colunga · Founder, Attend Wealth

Tony leads Attend Wealth, a fee-based wealth management firm in Atlanta serving professionals, families, physicians, and business owners. Advisory services are held to a fiduciary standard. More about Attend