Is it costly to wait to apply for Medicare?

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Dear Insurance Adviser,
I am 65 and plan on working until age 70. I have health insurance through a large employer and have not applied for any parts of Medicare. My concern is if I apply for Part A, I can no longer contribute to my health savings account. Am I correct on this? If I don’t enroll in Part A now, will I have to pay a penalty down the road?
— Gary

Dear Gary,
As illogical as it may seem, my Medicare source says that if you have either Medicare Part A (hospital insurance) or Part B (medical insurance), you can’t contribute anything additional to your health savings account.

So, yes, you are correct. Don’t enroll in Part A yet.

As for late enrollment penalties with Medicare, since Part A is free to virtually all Americans, there is no late enrollment penalty because there is no cost. There is a penalty for enrolling late in Part B, but that penalty is waived if you’re covered in a group insurance program, which, of course, you are.

When you do retire at age 70, be sure to apply for Part A and Part B Medicare about 60 to 90 days in advance of the end of your group insurance coverage. Once you receive your Medicare card showing you have parts A and B, contact an insurance agent specializing in Medicare to arrange supplemental coverage plus Part D prescription drug coverage.

All the best.

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