COBRA and Medicare: What You Must Know Before Turning 65
If you’re turning 65 or planning to retire after 65, understanding how COBRA and Medicare work together is absolutely critical. I’ve seen too many people get caught in a financial mess simply because they misunderstood how Medicare enrollment works when COBRA is involved. Let’s walk through the rules, the risks, and how to avoid costly mistakes.
Why COBRA Isn’t a Substitute for Medicare at 65
COBRA lets you keep your employer’s group health plan for a limited time after you leave your job—typically 18 months. While that sounds like a helpful safety net, it becomes dangerous when you hit 65. Once you turn 65, Medicare becomes the primary payer, and COBRA automatically becomes the secondary payer. That means if you haven’t enrolled in Medicare yet, COBRA won’t cover most of your medical bills. Imagine being stuck with 80% of a $100,000 hospital bill because you didn’t enroll in Medicare on time. That’s why you must enroll before your 65th birthday if you’re on COBRA.
The Initial Enrollment Period (IEP): Your Best Opportunity
Your IEP is the seven-month window that includes the three months before your 65th birthday, the birthday month, and three months after. If you’re on COBRA, enrolling during the three months before your birthday ensures Medicare coverage begins the first day of your birthday month. Wait too long, and you could have a dangerous coverage gap where you’re financially exposed.
Special Enrollment Period (SEP) for Those Retiring After 65
If you’ve continued working past 65 and had credible coverage through your employer, you get an SEP when you retire. This lets you enroll in Medicare without a late penalty—but only if you file the right forms promptly. You’ll need Form L564 (to prove you had credible coverage since turning 65) and Form CMS 40B (to request your Medicare start date). Timing matters here too—if your employer coverage ends June 30, your Medicare should start July 1 to avoid a lapse.
Don’t Miss the Medigap Open Enrollment Window
Once you enroll in Part B, you get a six-month Medigap Open Enrollment Period (OEP). During this time, you can sign up for supplemental plans like Plan G or Plan N with no medical underwriting. That means no health questions, no exclusions, and guaranteed approval. But once that window closes, it’s a different story. Applying later means answering 20–25 health questions and possibly getting denied based on your medical history.
Supplemental Plans Add Critical Protection
Even with Medicare Parts A and B, you’ll face deductibles and coinsurance. That’s where Plan G or Plan N come in. These supplemental plans pick up where Medicare leaves off and can save you thousands. But again, the key is to enroll during your Medigap OEP. Miss it, and your options could be limited or unavailable entirely, depending on your health.
The Biggest Risk: Gaps in Coverage
The biggest mistake I see? People assuming COBRA will fully protect them after 65. It won’t. As soon as you’re eligible for Medicare, COBRA becomes secondary. And if you haven’t enrolled in Medicare, you’re left holding the bag. You must align your Medicare start date with your COBRA end date or risk a gap in coverage that could cost you tens of thousands of dollars.
My Recommendations Are Simple
Enroll in Medicare before you turn 65 if you’re on COBRA. If you’re working past 65, use the SEP and submit Forms L564 and CMS 40B on time. And once you have Part B, take full advantage of the Medigap Open Enrollment Period. These steps can mean the difference between financial security and a lifetime of regret.
