If you are approaching retirement age or have been diagnosed with a chronic disability, you may be curious about Medicare health benefits. Although these benefits are not mandatory, you may face some difficulty opting out of them fully. If you decide to enroll later, you may also face penalties. This is what you should know about opting out of Medicare.
What Is Medicare?
Medicare allows people who meet the eligibility requirements to receive affordable health care benefits. If you are above age 65, you automatically qualify, but if you suffer from a chronic disability, you need to have at least 24 quarters of Social Security Disability benefits collected before you can enroll in Medicare.
Once you have enrolled, you have the option to enroll in any of the parts of Medicare. The parts are as follows:
- Part A Hospital Insurance
- Part B Medical Insurance
- Part C Medicare Advantage
- Part D Prescription Drug Coverage
You can choose to enroll in Parts A and B, which comprise Original Medicare, or you can choose Part C Advantage coverage which is administered through private insurance companies. If you choose Original Medicare, you will need Part D coverage to receive drug coverage. Advantage plans often have drug coverage included.
Opting Out Of Medicare
Technically speaking, Medicare is not a mandatory program. Though, there are few people who are eligible for Medicare but do not act on their benefits. People who choose to delay their Medicare enrollment may do so to continue contributing to a health savings account, as enrolling in Medicare prevents you from further adding to the account.
If you receive Social Security benefits, you cannot opt out of Medicare without forfeiting your benefits entirely. If you are able to delay your enrollment, it is best to ensure that you will qualify for a Special Enrollment Period when you do plan to enroll. If you do not enroll during such a period, you will likely face substantial late enrollment penalties. These penalties increase the longer you wait to enroll, so you want to make sure to avoid them if at all possible.