Practical Tips for New Retirees on Getting Started with Medicare Right After Leaving Work

Key Takeaways

• Signing up for Medicare right after leaving work requires understanding your enrollment options, deadlines, and how to avoid penalties.

• Coordinating Medicare with any employer coverage you may still have can help you avoid coverage gaps and unnecessary costs.

Transitioning from Work to Medicare: What You Need to Know

Retiring marks a major milestone, and with it comes the transition from employer-sponsored health insurance to Medicare. Getting started with Medicare right after leaving work can feel overwhelming, but with the right steps, you can ensure smooth and uninterrupted coverage.

When Should You Enroll in Medicare?

Timing is everything when enrolling in Medicare. You need to sign up during a specific window to avoid late penalties and potential gaps in coverage.

Your Special Enrollment Period (SEP)

If you had employer-sponsored health insurance, you have an eight-month Special Enrollment Period (SEP) that begins the month after your employment or employer health coverage ends—whichever happens first. This is your chance to enroll in Medicare without facing late penalties.

General Enrollment and Open Enrollment Periods

If you miss your SEP, you’ll have to wait for the General Enrollment Period (January 1 – March 31) to sign up for Medicare Part A and Part B, but your coverage won’t start until July 1. This can leave you without health insurance for months.

For those already enrolled, the Medicare Open Enrollment Period (October 15 – December 7) lets you review and make changes to your Medicare plan every year.

Signing Up for Medicare: Step-by-Step

Getting started with Medicare is easier when you follow these steps:

1. Confirm Your Eligibility – You’re eligible for Medicare at age 65 or earlier if you qualify due to a disability.

2. Apply for Medicare – If you’re receiving Social Security benefits, you’ll be automatically enrolled in Medicare Parts A and B. If not, you must apply through the Social Security Administration.

3. Decide on Additional Coverage – Original Medicare covers hospital and medical services, but you may need additional coverage for prescription drugs and other healthcare needs.

4. Check Coordination of Benefits – If you have retiree coverage or COBRA, understand how it interacts with Medicare to prevent unnecessary costs.

Understanding the Costs of Medicare

Medicare isn’t free, and it’s important to budget for your healthcare costs.

• Medicare Part A (Hospital Insurance): Most people qualify for premium-free Part A, but if you haven’t worked long enough, you may have to pay a premium.

• Medicare Part B (Medical Insurance): Part B has a monthly premium and an annual deductible. The standard premium in 2025 is $185 per month, with a deductible of $257.

• Medicare Part D (Prescription Drug Coverage): This helps cover medication costs and has a maximum deductible of $590 in 2025.

Avoiding Medicare Late Enrollment Penalties

Failing to enroll in Medicare on time can lead to permanent penalties.

• Part B Penalty: If you don’t sign up for Part B during your SEP and later enroll, your premium increases by 10% for every 12-month period you were eligible but didn’t sign up.

• Part D Penalty: If you delay Part D enrollment and don’t have creditable drug coverage, you’ll pay 1% of the national base beneficiary premium for each uncovered month.

Coordinating Medicare with Employer or Retiree Coverage

If you still have coverage through your former employer, know how it interacts with Medicare.

• If Your Employer Has 20+ Employees: Your employer plan is primary, and Medicare is secondary.

• If Your Employer Has Fewer Than 20 Employees: Medicare becomes your primary coverage, and your employer plan may only provide secondary benefits.

Some retiree plans require you to enroll in Medicare before they provide coverage, so check with your benefits administrator.

Medicare and COBRA: What You Need to Know

If you’re offered COBRA after retirement, be careful. COBRA is not considered creditable coverage for Medicare, meaning you must still enroll in Medicare to avoid penalties.

• If you get Medicare first, you can still enroll in COBRA for additional coverage.

• If you enroll in COBRA first, your SEP to sign up for Medicare still begins when your employment ends—not when COBRA ends.

Choosing the Right Medicare Plan for Your Needs

Once you’re enrolled, you’ll need to decide if Original Medicare (Parts A & B) alone is enough or if you need additional coverage.

Comparing Coverage Options

• Original Medicare: Covers hospital and medical services but doesn’t include routine dental, vision, hearing, or drug coverage.

• Medicare Part D: Adds prescription drug coverage.

• Other Coverage: Additional options exist to cover expenses Medicare doesn’t fully pay for.

Getting Help with Medicare Enrollment

If you’re unsure about your options, you can consult a licensed professional listed on this website. They can help you:

• Understand your eligibility and enrollment periods

• Compare Medicare plans based on your healthcare needs

• Avoid penalties and coverage gaps

Preparing for Your First Year on Medicare

Once you’re enrolled, keep these tips in mind:

1. Review Your Coverage Annually – Medicare plans change, and your health needs may shift.

2. Use Preventive Services – Medicare covers many screenings and wellness visits at no additional cost.

3. Set Up Automatic Payments – Avoid missing premium payments by setting up autopay.

Ensuring a Smooth Start to Medicare

Transitioning from employer health insurance to Medicare doesn’t have to be complicated. By signing up on time, understanding your options, and getting professional guidance, you can make the most of your benefits and avoid costly mistakes.