financial planner Stephen Zelcer


Should I delay medicare enrolment?

I hope you’re doing well. My wife and I took your FERS planning course (and then audited a second time) last year and we have a question that has come up.  I hope you don’t mind helping on this point.

As we are approaching a certain age we are being flooded with ads for Medicare Advantage type insurance and also I saw an article yesterday that mentioned the medicare delayed enrollment penalty. Our understanding is that we should sign up for Part A (free) anytime within 7 months before and after our 65th birthdays.  However, since I plan to continue working at least til age 70 (maybe longer) and we will maintain FEHB enrollment, I thought we could delay signing up for Part B until I retire without incurring a penalty. Is this correct?  The Washington Post article I saw yesterday suggested otherwise.  We recognize the combination of FEHB and Part B could eliminate physician coinsurance / co-pay out-of-pocket expenses but, in our case, the Part B premiums would cost more than we pay for those out-of-pocket costs. The health element where we feel under-insured is our Rx costs but Part D is said to be worse than FEHB and none of the FEHB plans do well-covering name-brand prescriptions.

Is our plan sound?




Great Question, unfortunately, it’s not so simple to just take Medicare A at 65.  Even though it is free, it will preclude you from participating in an HSA (Health Savings Account) which has robust tax benefits and will lower the cost of your FEHB substantially.

You are correct about Part B penalties not applying so long as you are an active employee covered by FEHB.

Sticking with FEHB alone makes sense, but as you point out, having Medicare does have a benefit, in that it can reduce out-of-pocket expenses.   So, you will want to compare your out-of-pocket exposure without Medicare vs. your Medicare part B premiums to see if it’s worth it.

I hope this helps!


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