Do You Have to Have Medicare When You Retire?

Medicare is a government-sponsored national health insurance program in the United States. It is available to people 65 and older and to a select group of other people, such as those with Lou Gehrig's disease. Medicare is a complex program with four key parts. Some parts are clearly optional, but others are automatically provided to retirees who receive Social Security benefits.

Medicare

• Medicare health insurance was created by legislation in 1965. Former President Harry Truman and his wife Bess were the first two people to receive Medicare coverage. The Medicare program is financed by federal payroll deductions made during your working life and by contributions from your employer. As with most health insurance programs, Medicare covers some medical costs, but also involves out-of-pocket costs.

Four Parts

• Medicare consists of four major parts. Part A covers hospital visits and some other major medical expenses such as hospice care. Part B is medical insurance that applies to doctor visits and other medical costs not included in hospital coverage. Part C coverage is provided by private companies in partnership with the Medicare program and generally includes Part A and Part B and additional benefits, such as extra coverage for hospital stays. Part D covers prescriptions.

Retiree Enrollment

• Retirees who receive Social Security benefits are automatically enrolled by the Social Security Administration (SSA) in Medicare Part A and Part B. You can't decline Part A, which is free. There is a charge for Part B if you elect to keep it after receiving notification of the automatic enrollment. However, you can decline Part B if you don't want to pay for it. Enrollment in Part C and Part D Medicare is optional.

Exceptions

• Most retirees are automatically enrolled in Part A and Part B Medicare. However, residents of Puerto Rico and Social Security recipients in foreign countries are not automatically enrolled in Part B coverage. These people must contact SSA to apply for Part B coverage.