Turning 65 should be a milestone to celebrate, not a source of financial stress. Yet, for millions of Americans, navigating Medicare enrollment and the initial enrollment period (IEP) can be a confusing, high-stakes gamble.
The IEP is a critical seven-month window centered on your 65th birthday, and missing it can result in lifetime late-enrollment penalties added to your Part B and Part D premiums, along with costly gaps in coverage. Whether you are ready to retire or plan to keep working when you reach age 65, make sure you understand this deadline.
Navigating medicare enrollment and understanding late penalties
Medicare’s IEP includes the three months before the month you turn 65, the month you turn 65, and the three months after your birthday. Note that if your birthday falls on the first day of the month, your initial enrollment period starts four months before the month you turn 65 and ends two months after the month of your 65th birthday.
If you don’t sign up during your IEP and aren’t eligible for a special enrollment period (usually due to having employer coverage — more on that below), you pay penalties once you do enroll. For Part B medical insurance, the penalty is an extra 10% of the standard premium for every full 12-month period you were eligible but didn’t enroll. And if you go 63 days or more after your IEP ends without prescription-drug coverage that Medicare deems “creditable,” you’ll owe a penalty for Part D prescription-drug coverage.
(For a plan to be creditable, it must be expected to pay, on average, at least as much as standard Medicare Part D coverage.) Medicare calculates the Part D penalty by multiplying 1% of the “national base beneficiary premium” ($38.99 in 2026) by the number of full, uncovered months you were eligible but didn’t enroll.
If you or your spouse is still working and covered by a group health plan from an employer with 20 or more employees, you can use it in place of Part B and delay Part B enrollment without penalty. (Since Part A hospital insurance is usually premium-free, many people enroll in it at 65, even while working.)
You can also delay Part D penalty-free if your employer offers creditable coverage. But even if your employer-provided health insurance meets Medicare’s standards, its prescription-drug coverage may not. You should receive a notice every September from your employer that lets you know whether your prescription-drug coverage is creditable.
When your current employment ends or your employer coverage ends (whichever comes first), you qualify for a special enrollment period to enroll in Medicare. This SEP lasts for eight months. If you fail to meet that deadline, you may be barred from enrolling in Medicare until the next general enrollment period, which runs from Jan. 1 to March 31 every year.
How to sign up
You will be automatically enrolled in Part A and Part B if you are already receiving Social Security retirement benefits at least four months before you turn 65. In that case, you’ll receive your Medicare card in the mail about three months before your 65th birthday. You can opt out of Part B if you have qualifying employer coverage.
If you are not receiving Social Security benefits at age 65, you must sign up for Medicare manually during your IEP. The fastest method is to apply online through your Social Security account, at ssa.gov. Alternatively, you can call the Social Security Administration at 800-772-1213 or go to your local Social Security office (click on the “Find an office” link at ssa.gov).
Donna LeValley is a retirement writer at Kiplinger.com. For more on this and similar money topics, visit Kiplinger.com.
©2026 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.
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