Think You Don't Need Medicare at 65? Here's When Delaying Can Backfire.

A lot of people look forward to turning 65 because that's when Medicare eligibility generally starts. But it's not a given that you'll want to enroll in Medicare at age 65.

It may be that you're still working at 65 or have health insurance through a spouse's workplace plan. At that point, why enroll in Medicare -- and pay for it -- when you're happy with your coverage?

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But in some cases, delaying Medicare enrollment isn't the harmless move you might think it is. And it's important to understand when it's safe to wait, and when it isn't.

Having coverage isn't always enough

It's not automatically a mistake to delay Medicare once you're eligible. You may have a heavily subsidized workplace plan that offers great coverage. Even if Medicare were to serve as secondary insurance for you in that situation, it may not be worth paying those Part B premiums.

Also, it may be that your current health plan is compatible with a health savings account (HSA). You can no longer contribute to one of these accounts once you enroll in Medicare. And you may not want to give up the tax break you get from your HSA just yet.

If you work for a company with 20 or more employees that provides you with health insurance, your group plan is generally considered creditable coverage. That means you can generally delay your Medicare enrollment without facing late penalties. Once you leave your job or your group health coverage ends, you'll typically qualify for a special enrollment period to sign up.

But if you work for a smaller company or buy your own insurance through the ACA Marketplace, your coverage may not be considered creditable. At that point, you may be not eligible for a Medicare special enrollment period. And if you don't sign up for Medicare during your initial enrollment window, you could face serious surcharges.

Not only might you be hit with surcharges on your drug plan premiums, but you risk a 10% surcharge on your Medicare Part B premiums per 12-month period you're eligible for enrollment but don't sign up. Over a decades-long retirement, those extra costs could add up in a serious way.

Make sure you know the rules

You might think you don't need Medicare at 65. But before you decide to delay your enrollment, make sure you're eligible for a special enrollment period.

Otherwise, you may want to plan on signing up for Medicare when you're first eligible. Your initial enrollment window starts three months before the month you turn 65 and ends three months after that month. It could pay off big time to make sure you put Medicare coverage in place during that seven-month window.

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