Can I Have Health Insurance When I Begin Medicare?

Most Americans are eligible for Medicare, the federally sponsored health insurance program, when they turn 65. Medicare has multiple parts: Part A, which covers hospital services; Part B, which covers doctor's visits and routine care; and Part D prescription drug coverage. If you have worked in Medicare-eligible employment for at least 10 years, you are automatically enrolled in Part A, which is free for most people, and given the option to enroll in Part B, which carries a monthly premium.

Creditable Coverage

• In most cases, if you have creditable health insurance when you become eligible for Medicare, you can opt out of Medicare until that coverage stops. Creditable coverage is health insurance that offers comparable benefits to Medicare. For example, if you are still working when you turn 65 and have health insurance through your employer, or if you are covered under your spouse's policy, you can opt out of Medicare without a penalty.

Premiums and Penalties

• As of 2011, the monthly premium for most Medicare Part B recipients is between $96.40 and $110.50 per month. The premium is taken out of your Social Security check each month. If you have private health insurance, compare the cost and coverage offered by your private insurer and choose the option that works best for you. If your insurance coverage ends, or you stop working, you have eight months from the date your coverage ends to enroll in Medicare without paying a penalty on the monthly premium. Federal law requires that for every 12 months you go without creditable health insurance coverage while you are eligible for Medicare, a 10 percent penalty will be added to your monthly Medicare premium for as long as you have Medicare.

COBRA and Medicare

• If your health insurance is through COBRA or a retiree medical plan, and not through a current employer, you do not have the eight month Special Enrollment Period when that coverage ends. You must wait until the Medicare General Enrollment Period, which usually occurs from January through March of each year. You may have to pay the late enrollment penalty in this case. If you are receiving COBRA benefits, and turn 65, you should enroll in Medicare Part B as soon as possible to avoid penalties.

Opting Out of Medicare

• If you have health insurance when you turn 65, and choose not to enroll in Medicare Part B, return the response card that comes in your enrollment package indicating that you do not wish to enroll in Part B. You can also opt out of Medicare Part B by calling Social Security.