Getting older isn’t something everyone celebrates. But there’s a reason to get excited about turning 65 – that’s when Medicare eligibility begins for many folks. And if you’ve been waiting to turn 65 so you can sign up for Medicare and leave your career behind, that’s certainly a milestone to be happy about.
Once you turn 65, you likely are eligible to receive both Medicare Parts A and B, which cover inpatient care and outpatient/physician care, respectively. Some seniors opt to enroll in only Part A when they first become eligible since there’s generally no premium cost for Part A. (Note that if you’re not covered under a group health plan as an active employee or spouse of an active employee, you will potentially face a late enrollment penalty if and when you do eventually sign up for Part B.)
As of mid-2025, nearly 69 million people were enrolled in at least one part of Medicare. Almost all of them — 68.8 million enrollees — had Part A coverage, while 63.1 million had Part A and Part B. So there were about 5.7 million people enrolled in only Medicare Part A, without Part B.
Once you turn 65 and are eligible to sign up for Part A, two factors to consider are:
You’ll need to stop contributing to your HSA
Health savings accounts (HSAs) are one of the most tax-efficient tools available. Contributions go in tax-free, investment gains are tax-free, and withdrawals are tax-free when used to cover qualifying medical expenses. Learn more about HSAs.
You may be motivated to sign up for Medicare Part A at 65, but here’s another incentive: Even if you have group health coverage through your employer, Part A can coordinate with your existing insurance or serve as primary or secondary payer insurance. And if you’re not subject to a premium for Medicare Part A, which holds true for most enrollees, then you might as well snag that additional coverage.
But if you have access to an HSA, enrolling in Part A will mean you have to stop funding your account. That could mean you’d miss out on near-term tax savings because your taxable income could be higher and might put you in a higher tax bracket (HSA contributions reduce taxable income, so taxable income will be higher if you don’t contribute to an HSA). And it could also result in less money in your HSA over the long term, since HSA contributions remain in the account until you use them.
Halting your HSA contributions could also result in higher Medicare costs down the line, depending on your income. High-income retirees are at risk of income-related monthly adjustment amounts (IRMAAs), which are surcharges that apply to both Part B and Part D premiums.
IRMAAs are calculated based on your Modified Adjusted Gross Income (MAGI) from two years before the current year. If you sign up for Medicare Part A at 65 and lose your HSA contribution, and that bumps your income over the IRMAA threshold (or into a higher IRMAA bracket), it could result in an IRMAA (or larger IRMAA) two years later.
Note that if your income or circumstances have changed and your income from two years prior is no longer an accurate representation of your current situation, you can appeal an IRMAA decision.
One important thing to note if you’re enrolling in Medicare Part A more than six months after you were initially eligible: You must stop HSA contributions six months before your Part A enrollment if you’re signing up past the age of 65 and a half. That’s because Medicare enrollees who sign up after turning 65 get up to six months of retroactive coverage (as far back as the month they turned 65).
Your coverage through an employer already gets the job done
Enrolling in Part A alone could mean getting access to primary or secondary payer insurance for hospital care – for free. But if you have outstanding health coverage through your employer, Part A may not be necessary. There’s no harm in accepting it, unless you have HSA-eligible coverage from your employer and you want to continue to contribute to an HSA. In that case, you have to delay Part A (and Part B) while you’re continuing to make HSA contributions.
When you’re enrolled in a group health plan of 20 or more employees at age 65, that employer plan is typically your primary insurance and Medicare is a secondary payer. If you end up needing hospital care and are signed up for Part A, your employer insurance will be billed first. Part A might then pick up the tab for the costs of services Part A covers and which your primary insurer hasn’t paid for.
However, if your employer coverage is great, your desire for additional coverage may not outweigh the complications of navigating coverage from multiple insurers. If your employer coverage is outstanding and your anticipated savings from getting Part A as a backup are minimal, you may not want to deal with the hassle. Just make sure you have a plan to enroll in Medicare, including Part B, once you eventually retire and your active employee coverage ends.
Maurie Backman has been writing professionally for well over a decade, and her coverage area runs the gamut from healthcare to personal finance to career advice. Much of her writing these days revolves around retirement and its various components and challenges, including healthcare, Medicare, Social Security, and money management.
