Dear AMAC,
I am growing increasingly frustrated with Medicare and I want to know, can I opt out of it? It seems like it doesn’t pay much, so I don’t see the use in paying a monthly premium for Part B. Please advise.
-Mark (Boise, ID)
Hello Mark,
This is a very common and valid question. Medicare Part A and B are considered optional, so it is possible to opt out by contacting the Social Security Administration. However, you may want to consider the consequences of dropping this coverage, as you may face penalties later down the road and/or lose your Social Security benefit check.
If you are not replacing your Part B with credible coverage, you will start incurring a penalty when you drop it. That penalty will be assessed if you pick up Part B again in the future. If you are liable for the Part B penalty, your monthly premium may go up by 10% for each 12-month period that you do not have Part B. The penalty will continue to rise the longer you go without Part B or credible coverage.
Part A is usually premium-free, and you typically can not drop it unless you pay a premium for Part A. If you do not qualify for premium-free Part A, you may also face a penalty by dropping it. The penalty is a 10% increase in your monthly premium for twice the amount of time you went without Part A coverage. So if you went three years without Part A, you will pay the higher premium for 6 years.
Additionally, if you are receiving Social Security benefits, you cannot opt out of Medicare Part A without opting out of Social Security as well. Many people rely on their Social Security benefits to pay for living expenses. Be sure to weigh out the financial implications of dropping Part A before doing so.
Once you drop Part A and/or B, you may not be able to pick it up right away if you change your mind. You may have to wait until the General Enrollment Period, which runs from January 1st to March 31st of each year. The soonest your Part A or B will begin again is July 1st of that year.
Now, if you have a stand-alone prescription drug plan (Part D), your coverage will terminate if you no longer have neither Medicare Part A nor B. You need at least one or the other to keep your drug coverage. Before terminating Part A or B, consider what your drug costs might be if you had to pay the full retail price for them.
You should know that Original Medicare, Part A and B, were never intended to cover everything. Not having any additional medical coverage leaves you paying a portion of your hospital and medical expenses with no annual limit, among other expenditures.
Fortunately, there are other types of insurance that you can add on or replace your Original Medicare with, which can help offset your costs. It may be worthwhile to speak with one of our licensed Medicare Advisors. We can discuss all your options and find out which path makes sense for you.
Sincerely,
Your Medicare Advisor
If you would like to review specific plan options, our licensed agents here at AMAC would be happy to assist you. They are licensed with top-rated insurers throughout the country.
Call 1-855-611-4856 to learn more today or request a quote below!
It is Evil to Penalize senior citizens on limited income, for late enrollment or any other medicare related issue .
That needs to change
I read the article about dropping Medicare, and you mention it has to be replaced by ‘credible’ insurance. What is credible insurance? Does a medicare advantage plan count?
Hello Susabella,
Credible coverage is considered insurance that covers at least, if not more than what Medicare covers. A Medicare Advantage plan is considered credible coverage, but you must keep Medicare Parts A and B in order to keep the Advantage plan.
Veterans who receive medical care from the VA should consider dropping their Medicare coverage and enjoy the increase in their SS direct deposit. I dropped my Medicare coverage years ago.
Hello Lincoln,
That is a good point. Just keep in mind that VA health care is not considered credible coverage to replace Part B. So if you drop Part B and ever need to pick it up again in the future, you may face a penalty.
Could you elaborate more about “credible coverage”? Since Part A is thrust on everyone reaching age, I did not know that it was cancel-able and thought all other Parts, after A were pay-in, hence the supplemental push annually. Is Part A being withheld monthly? I reflect Lincolns action as that is what I did…cancelled Part B and have it returned monthly. I’ve had full VA coverage since 1979 via (Montgomery GI Bill) and have had letters mailed to me stating that I didn’t have to apply for “Obamacare” and to add that since Trump’s administration via (Choice program) I have not endured any cost out of pocket, except the bogus cost for my VA clinic visits.
Hello Pat,
Credible coverage is considered insurance that covers at least the same amount as what Medicare covers. Although Part A & B are not neded to keep your VA benefits, VA health care is not considered credible coverage to replace Part B.
Most people qualify for Part A premium-free because they or their spouse paid enough Medicare taxes while working, or meet other certain circumstances. If for some reason you do not qualify for Part A premium-free, then you would have to pay a premium to Medicare directly or it will be taken out of your Social Security check (or Railroad Retirement check).
Keep in mind that if you are receiving Social Security benefits, you cannot opt out of premium-free Part A without opting out of Social Security as well. So if your Part A is premium-free, opting out will cost you your Social Secuirty check each month. As you can see, there is a lot to consider before making that decision.
Thank you for your questions!
I was a Nursing Home Administrator for forty years. I cannot tell you the number of Veterans who discovered that the V.A. has very poor long-term care coverage. Many veterans who did not have medicare A, B, and a good Supplemental found themselves in a world of hurt financially when they needed Long Term care after a broken hip or a stroke and found the VA was not going to help them.
If by Long Term Care coverage you mean coverage for custodial care rather than medical care, Medicare doesn’t cover custodial care either (and neither does Medicare Supp/Medigap insurance plans).
You need to buy a separate Long Term Care policy from a private insurance carrier if you want coverage for custodial care.
This is correct Dan, Medicare does not cover custodial care!