Is Medicare Mandatory? Health Insurance Coverage Options for Seniors

• by Zia Sherrell, MPH
• November 29, 2021

More than 61.2 million people in the United States are Medicare beneficiaries, making it one of the most extensive healthcare programs on the planet.

The majority of these individuals received retirement benefits and were automatically enrolled in the program once they turned 65. Other seniors may have manually enrolled around their 65^th birthday. 

If you’re approaching the age of eligibility, you may wonder whether Medicare is mandatory at age 65 and what the consequences of opting out or delaying enrollment may be.

Is it mandatory to go on Medicare when you turn 65?

While registering for the Medicare program is often automatic, you don’t have to sign up if you aren’t automatically enrolled. If you decide to delay Medicare enrollment because you or your spouse have health insurance coverage through an employer or another source, you may be able to enroll in Medicare Part A and/or Part B at a later date without facing late enrollment penalties.

As with all your health care decisions, you can choose whether to be part of the Medicare program or not. However, there are consequences for declining or delaying enrollment.

What are some of the reasons people don’t enroll in Medicare?

Two common reasons people may decide they don’t want to become Medicare beneficiaries include:

• They have existing health insurance
  People who have other health care insurance (such as through their employer or their spouse’s employer) may decide it provides adequate coverage without also having Medicare.
  
  However, Medicare can work with additional health insurance to save you money, so it’s usually worth enrolling anyway. Some retiree plans also won’t cover costs for people eligible for Medicare who aren’t registered.
  
  
• They don’t want to pay the premiums
  While most people receive premium-free Medicare Part A (hospital insurance), some people are required to pay a monthly Part A premium. Medicare Part B (medical insurance) is optional but requires a monthly premium.
  
  Some people may decide they’d rather avoid these payments, though it could mean they’ll pay extra for their Medicare coverage later when they eventually sign up.

What happens if you don't sign up for Medicare?

If you do not sign up for Medicare Part A or Part B when you first become eligible, you may be subject to a late enrollment penalty if you choose to sign up later on. 

• The Part A late enrollment penalty is only applicable to beneficiaries who do not qualify for premium-free Part A (which we’ll outline below). 
  
  The Part A late enrollment penalty is up to 10 percent of the monthly premium (if you are required to pay one), and you must pay the penalty for twice the number of years that you could have had Part A but did not.
  
  For example, if you were eligible for Part A for two years before you finally signed up, you would have to pay the extra 10 percent penalty for four years.
  
  
• The Part B late enrollment penalty is up to 10 percent of the standard Part B premium for each 12-month period that you could have had Part B but did not. You have to pay this penalty for as long as you are enrolled in Part B.

Late enrollment penalties do not apply to everyone who delays coverage, however.

For example, if you delay enrollment because you have employer-provided health insurance coverage, you may be able to enroll in Medicare Part A and/or Part B at a later date without facing a late enrollment penalty.   

Is Medicare Part A mandatory?

Technically, no Medicare Part A is not mandatory.

If you don’t sign up for Medicare Part A, however, you must withdraw from all federal benefits programs. That means you cannot receive Social Security or Railroad Retirement Board benefits. You must also repay any benefits you have already received if you decline Medicare. This is one reason why most people keep their Part A coverage once their eligible.

You will qualify for premium-free Medicare Part A benefits if you worked and paid Medicare taxes for at least 10 full years (40 quarters).

Most beneficiaries qualify for premium-free Part A. Enrolling in Medicare Part A does not kick you off your existing health coverage. 

Medicare works with other types of insurance, such as employer coverage, VA insurance and Tricare. If you are still working and have quality health insurance provided by your employer, you can have coordination of benefits to cover your health care costs. 

• If your employer has fewer than 20 employees, Medicare will be the primary payer. That means Medicare will pay first for any covered care you receive, and then your employer insurance will pick up the rest of the services covered by that plan.
  
  
• If your employer has 20 or more employees, your employer insurance will pay first and Medicare will serve as the secondary payer to pick up any additional covered services. 

Some Medicare beneficiaries have to pay a premium for their Part A coverage.

If you did not accumulate at least 40 quarters (10 years) of working and paying Medicare taxes, you will have to pay a premium for your Part A coverage.

• You will pay $274 per month in 2022 for Medicare Part A if you paid Medicare taxes for between 30 and 39 quarters.
  
  
• If you paid Medicare taxes for fewer than 30 quarters, your Part A premium will be $499 per month in 2022.

If you do not qualify for premium-free Part A, you will need to manually enroll in Medicare Part A.

Is Part B of Medicare mandatory?

Medicare Part B is optional, and it covers qualified outpatient care, certain preventive care services and durable medical equipment (DME).

Most beneficiaries pay the standard Part B premium of $170.10 per month in 2022. Some higher income-earners will pay more for their Part B coverage. This higher amount is called the Income-Related Monthly Adjustment Amount, or IRMAA.

Although Part B is optional, it is mandatory to have Medicare Part A and Medicare Part B in order to enroll in a Medicare Advantage (Part C) plan or a Medicare Supplement Insurance (Medigap) plan.

Summary

Medicare isn’t a mandatory program, so you’re free to opt-out of the program if you prefer. However, Medicare is one of the benefits that people work and pay taxes for. After you retire, taking advantage of this program makes sense. 

Remember that most people qualify for premium-free Part A. If you’ve worked and paid taxes for at least 10 full years or 40 quarters, you won't pay monthly premiums. That means that if you qualify, being in Medicare doesn’t need to cost you money unless you're using the program. 

Consider the consequences carefully before deciding you don’t want to become a Medicare beneficiary.

It is not mandatory to enroll in Medicare Advantage plans or Medicare Part D prescription drug plans. However, Part D plans also have late enrollment penalties if you choose not to sign up but decide you want a plan later.

Call today to speak with a licensed insurance agent who can help you determine your eligibility to enroll and compare Medicare plans in your area.

Or call 1-800-557-6059 1-800-557-6059 TTY Users: 711 to speak with a licensed insurance agent. We accept calls 24/7!

About the author

Zia Sherrell is a digital health journalist with over a decade of healthcare experience, a bachelor’s degree in science from the University of Leeds and a master’s degree in public health from the University of Manchester. Her work has appeared in Netdoctor, Medical News Today, Healthline, Business Insider, Cosmopolitan, Yahoo, Harper's Bazaar, Men's Health and more.

When she’s not typing madly, Zia enjoys traveling and chasing after her dogs.

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