What happens to health insurance when you turn 65 is that Medicare eligibility rewrites the rules for every other plan you hold. Employer coverage changes how it pays. Marketplace subsidies disappear. Health Savings Account contributions have to stop. COBRA stops protecting you the way you think it does. And a set of enrollment deadlines kicks in with penalties that stay on your premium for life. The standard Part B premium in 2026 is $202.90 a month, Part A is free for most people, and getting the timing right on the switch matters more than almost any other decision in this transition.
When You Actually Need to Sign Up
Your Initial Enrollment Period runs seven months: the three months before the month you turn 65, your birthday month, and the three months after.1Centers for Medicare & Medicaid Services. Original Medicare (Part A and B) Eligibility and Enrollment If you’ve already been collecting Social Security for at least four months before you turn 65, enrollment in Part A and Part B happens automatically. Everyone else has to sign up through the Social Security Administration.
Part A covers hospital stays, skilled nursing, hospice, and some home health care. Most people pay nothing for it because they or a spouse paid Medicare taxes for at least 40 quarters. Part B covers doctor visits, outpatient care, preventive screenings, and durable medical equipment.2Medicare. What Part B Covers After a $283 annual deductible, Part B pays 80% of approved charges and you pay the other 20%, with no cap on what that 20% can add up to.3Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
Whether you actually have to enroll in Part B during that seven-month window depends on what other coverage you have. That’s where most of the trouble starts.
If You’re Still Working at 65
Your employer’s size decides which plan pays first, and that in turn decides whether you can safely delay Part B.
At companies with 20 or more employees, your group health plan stays primary and Medicare is secondary. You can hold off on Part B without a late penalty for as long as that employment-based coverage continues.4Centers for Medicare & Medicaid Services. Small Employer Exception When you eventually leave the job or lose the group plan, an eight-month Special Enrollment Period opens for you to sign up for Part B, starting the month after employment or coverage ends, whichever comes first.5Social Security Administration. More Info – Special Enrollment Period (SEP)
At companies with fewer than 20 employees, the rules flip. Medicare becomes the primary payer and the employer plan pays second. If you don’t enroll in Part B during your Initial Enrollment Period, your employer plan will pay as if Medicare had already covered its share, and you’ll be on the hook for the difference.4Centers for Medicare & Medicaid Services. Small Employer Exception Sign up on time.
Most people still take Part A at 65 either way, since it’s free. But that free enrollment has a side effect if you have a Health Savings Account, which is worth knowing before you sign the form.
Retiree Coverage Is Different
Retiree health benefits from a former employer are not the same as active employment coverage. Medicare pays first, and the retiree plan works like a supplement.6Medicare.gov. Retiree Insurance and Medicare Retiree coverage does not qualify you for a Special Enrollment Period, so you still need to enroll in Part B during your Initial Enrollment Period or you’ll face the late penalty.
COBRA Doesn’t Buy You Time
This is the trap that catches the most people. COBRA does not count as employer group health coverage for Medicare enrollment purposes. If you’re turning 65 near the time you leave a job, your eight-month Special Enrollment Period starts when the job or the group plan ends, not when COBRA runs out.7Medicare. COBRA Coverage Electing COBRA doesn’t pause the clock.
People who ride COBRA for its full 18 months assuming they’re covered often find out at month nine or ten that they’ve already missed their Medicare window. Then they’re stuck: no Part B until the next General Enrollment Period, a coverage gap in the meantime, and a permanent premium penalty for life. If you’re 65 or older and leaving a job, enroll in Part B right away regardless of what COBRA offers.
Your HSA Has to Stop Taking Deposits
Once you enroll in any part of Medicare, including free Part A, you can’t contribute to a Health Savings Account anymore. The account itself stays open and you can still spend the balance tax-free on qualified medical expenses, including Medicare premiums and out-of-pocket costs. You just can’t add to it.
The wrinkle is retroactive Part A enrollment. When you apply for Social Security after 65, Medicare Part A is enrolled automatically and back-dated up to six months.1Centers for Medicare & Medicaid Services. Original Medicare (Part A and B) Eligibility and Enrollment The IRS treats those retroactive months as months you had Medicare, and any HSA contributions during that lookback become excess contributions that get hit with a 6% excise tax. If you’re past 65 and still contributing to an HSA, stop contributing at least six months before you plan to file for Social Security or Medicare.
If You’re Buying Insurance on the Marketplace
The moment you become eligible for premium-free Part A, you lose your eligibility for premium tax credits and cost-sharing reductions on a Marketplace plan.8Medicare. Medicare and the Marketplace Without those subsidies, the same Marketplace policy costs its full unsubsidized price, which is almost always far more than Medicare.
Your Marketplace plan does not cancel itself. You have to end it, and the timing has real consequences. If you keep collecting advance premium tax credits after becoming Medicare-eligible, you’ll owe some or all of that money back when you file your taxes.9Centers for Medicare & Medicaid Services. Transitioning from Marketplace to Medicare Coverage Update your Marketplace application as soon as you enroll in Medicare, and set the Marketplace plan’s end date to line up with the day your Medicare coverage starts.
Private insurance bought outside the Marketplace works the same way in terms of cancellation. It won’t terminate on its own. There’s no penalty for keeping it alongside Medicare, but you’d be paying two premiums for coverage you can only use once.
What Medicare Won’t Cover, and the One-Time Medigap Window
Original Medicare has real gaps. There’s no annual out-of-pocket maximum on Part B’s 20% coinsurance, no routine drug coverage without Part D, and almost nothing outside the United States. If you want a supplement policy (Medigap) to fill those gaps, the timing is tied to your Part B enrollment.
Medigap policies are standardized by letter (A through N), so a Plan G from one insurer covers the same things as a Plan G from another; only the premium differs. Your six-month Medigap open enrollment window starts the first month you’re both 65 or older and enrolled in Part B.10Centers for Medicare & Medicaid Services. Timing of the Six-Month Medigap Open Enrollment Period During those six months, insurers have to sell you any policy they offer in your state at their best rate, no matter what your health looks like. After the window closes, most states let insurers use medical underwriting, which means they can charge you more or turn you down based on pre-existing conditions.
Delaying Part B also delays this window. That’s another reason to enroll on time if you don’t have qualifying employer coverage keeping you out.
Prescription drugs are a separate decision. Part D plans are sold by private insurers, and if you go 63 or more consecutive days without Part D or equivalent drug coverage after becoming eligible, a late enrollment penalty attaches to your Part D premium for life.11Medicare. Avoid Late Enrollment Penalties Higher-income beneficiaries also pay a surcharge on Part B and Part D called IRMAA, tied to their tax return from two years earlier.3Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
What Missing the Deadline Actually Costs
Miss your Initial Enrollment Period without a qualifying employer plan, and the consequences aren’t a slap on the wrist. Your Part B premium goes up 10% for each full 12-month period you could have had it but didn’t. Two years late means a 20% surcharge on the $202.90 premium for the rest of your life on Part B.11Medicare. Avoid Late Enrollment Penalties
You also can’t just fix it whenever you want. If you missed both your Initial Enrollment Period and any Special Enrollment Period, you have to wait for the General Enrollment Period, which runs January 1 through March 31 each year, and coverage doesn’t start until the month after you enroll.12Medicare. When Does Medicare Coverage Start Everything between the day you should have been covered and the day your Part B kicks in is uninsured time.
The people who delay Part B legally, because they have employer coverage at a company with 20 or more employees, are exempt from the penalty. But the burden of proof falls on you. Keep records of your employment dates and your group health coverage; you’ll need them when you finally do enroll.