What are potential reasons for delaying Medicare?

If you’re thinking about deferring Medicare, discuss the pros and cons with your current insurer, union representative, or employer. It’s important to know how or if your current plan will work with Medicare, so you can choose the most comprehensive coverage possible.

Some of the common reasons you may choose to defer Medicare enrollment include:

• You have a plan through an employer that you want to keep.

• You want to keep contributing to a health savings account (HSA).

• You have coverage through Veterans Affairs, TRICARE, or CHAMPVA.

No matter your reasons for deferring, you must enroll in Medicare within 8 months of losing your current coverage. If you delay, you will incur penalties that may last for your Medicare coverage.

Some common reasons you may be considering deferring Medicare:

You have health insurance you want to keep

If you currently have a health insurance plan you love through a job, your spouse, a union, or another source, you may wish to continue your current coverage.

Deferring Medicare may save you money on monthly premiums, especially if you’re a high-wage earner. If your current insurance is provided through a large group insurer and covers everything that Medicare Part B and D cover, you won’t have a penalty if you defer for this reason.

You want to keep contributing to an HSA

You may also want to defer signing up for original Medicare if you currently have a health savings account (HSA). Once enrolled in original Medicare, you can no longer contribute funds to an HSA.

The money you put in an HSA increases on a tax-free basis and can be used to pay for many healthcare expenses.

HSAs are available to people with high-deductible health insurance plans. If your current health insurance meets Medicare’s requirements for creditable coverage, you won’t have a penalty if you defer for this reason.

You want to use your current Veterans Affairs benefits

If you’re a military veteran and have benefits through the Department of Veterans Affairs, you’re covered only for services provided at VA facilities. VA benefits typically won’t cover services you get at outside facilities unless specifically authorized by the VA.

In this instance, enrolling in Medicare Part A makes sense, so you can access services you may need at non-VA hospitals.

You might also be better off getting Part B during initial enrollment, even though you have to pay a monthly premium. If you defer enrollment in Part B, long-term penalties will raise your rates.

If you do enroll in Part B, your VA benefits will continue to pay for things that Medicare doesn’t cover, such as hearing aids and over-the-counter medications. You may also qualify for help paying your premiums through a Medicare savings program.

For flexibility, you might also want to enroll in a Medicare Part D (prescription drug) plan or a Medicare Advantage (Part C) plan that covers medications.

VA benefits include prescription drug coverage that’s considered to be at least as good as Medicare coverage. However, it requires you to use a VA medical facility and pharmacy.

If you lose your VA benefits or decide you want a Part D plan, you may enroll without penalty, even after your initial enrollment period expires.

You currently have TRICARE or CHAMPVA coverage

Active duty and retired military members and their families are typically eligible for TRICARE health insurance through the Department of Defense. Those who aren’t eligible, such as surviving spouses and children, may be eligible for CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs) coverage.

If you have TRICARE or CHAMPVA coverage and are eligible for premium-free Part A, you must also enroll in Part B to keep your current coverage.

If you aren’t eligible for premium-free Part A, you’re not required to sign up for Part A or Part B. If you don’t sign up during initial enrollment, though, you will incur a lifetime late enrollment penalty whenever you do sign up.