Jeffrey Wade
Medicare insurance can be suspended or deferred under certain circumstances. For example, if you or your spouse have health insurance through a large group employer or union, or if you want to keep your health savings account (HSA), you may defer Medicare coverage. It is important to note that if you lose your coverage, you must enroll in Medicare within 8 months to avoid penalties. Additionally, you can cancel or terminate certain parts of your Medicare plan, such as Part A (Hospital Insurance) and Part B (Medical Insurance), by submitting a written request or completing a disenrollment form.
| Characteristics | Values |
|---|---|
| Cancelling Medicare Part A | Only possible if you pay a premium for it |
| Cancelling Medicare Part B | Possible at any time |
| Cancelling Medicare Part C | Only possible during an open or special enrollment period |
| Cancelling Medicare Part D | Only possible during an open or special enrollment period |
| Cancelling Medigap | Possible at any time |
| Deferring Medicare | Possible if you have qualifying health insurance or a health savings account (HSA) |
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What You'll Learn
Cancelling Medicare Part A and Part B
You can cancel Medicare Part A and Part B, but there are some important considerations to keep in mind. Firstly, you can generally only drop Part A (Hospital Insurance) if you have to pay a premium for it, which is also called Premium-Part A. You can choose to drop Part B (Medical Insurance) at any time, but there may be consequences.
If you decide to cancel Medicare Part A and/or Part B, you will likely need to send your request in writing and include your signature. Contact your local Social Security office to initiate the process. If you have recently received a welcome packet for automatic enrolment in Medicare Part A and Part B, follow the instructions in the packet and return your Medicare card. Retaining the card indicates your agreement to maintain Part B, and you will be charged the monthly Part B premium.
Your coverage will typically end on the last day of the month following your request. For example, if you submit your request on April 5th, your coverage will terminate on May 31st. If you change your mind about cancelling before the date your coverage ends, you can contact the Social Security Administration (SSA) to reverse your cancellation.
It is important to be aware of the potential costs and gaps in coverage associated with cancelling Medicare Part A and/or Part B. You may have to pay all the costs for services that Medicare covers, including hospital stays, doctors' services, medical supplies, and preventive services. Additionally, if you decide to enrol in Medicare again later, you may have to wait until the next General Enrollment Period (January 1st to March 31st each year) to sign up. There is also a potential late enrollment penalty if you don't qualify for a Special Enrollment Period. This penalty increases the longer you go without coverage.
Before making a decision, carefully consider your alternatives. If you have other health insurance coverage through an employer, union, or a health savings account (HSA), you may defer Medicare coverage. Discuss the pros and cons with your current insurer, union representative, or employer to ensure you make an informed choice.
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Cancelling Medicare Part C and Part D
Cancelling Medicare Part C (Medicare Advantage) and Part D (prescription drug coverage) can be done in a number of ways. It's important to note that you can only cancel Part C and Part D during certain periods, namely an open or special enrollment period.
To cancel your Part C plan, you must contact your provider directly. You can usually find a phone number on your plan card or on the "Contact Us" page of your insurance provider's website. Your provider will guide you through the process, which typically involves submitting a written request or completing a disenrollment form.
For cancelling your Part D plan, you can call Medicare at 800-633-4227 (TTY: 877-486-2048) 24 hours a day, 7 days a week, except some federal holidays. Your Part D provider will also guide you through the process, which usually involves a written request or a disenrollment form.
You can also cancel both Part C and Part D by downloading Form CMS-1763 from the Medicare website or by visiting your local Social Security office to receive a paper copy. Make sure you fill it out completely, including having two witnesses to the form exchange, who must provide their full names, primary addresses, and mailing addresses. Mail or fax the completed form to your local Social Security office. Your coverage will end on the last day of the month after you file your request.
It is important to understand the implications of cancelling your Medicare policy. If you cancel without a replacement, you may be responsible for all healthcare costs moving forward. You may also be subject to late enrollment penalties if you sign up for new coverage during the next open or special enrollment period.
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Deferring Medicare coverage
If you have a health insurance plan that you like through your job, spouse, union, or another source, you may want to continue with that coverage and defer Medicare. Deferring Medicare may save you money on monthly premiums, especially if you are a high-wage earner. If your current insurance is provided through a large group insurer and covers everything that Medicare Part B and D cover, you won't be penalised for deferring.
You may also want to defer signing up for original Medicare if you have an HSA. Once enrolled in original Medicare, you can no longer contribute funds to an HSA. HSAs are available to people with high-deductible health insurance plans, and the money in an HSA increases on a tax-free basis and can be used for healthcare expenses. If your current health insurance meets Medicare's requirements for creditable coverage, you won't be penalised for deferring.
If you are a military veteran with benefits through the Department of Veterans Affairs (VA), you are typically only covered for services provided at VA facilities. Enrolling in Medicare Part A can give you access to services at non-VA hospitals. VA benefits include prescription drug coverage that is considered equivalent to Medicare coverage, but it requires you to use VA facilities and pharmacies. If you lose your VA benefits or want a Part D plan, you can enrol without penalty, even after your initial enrolment period.
It is important to note that most people eligible for Medicare benefit from enrolling in both Part A and Part B during their initial enrolment period. You can defer Part B coverage, but you may face significant financial penalties when you do sign up. These penalties will be in addition to your monthly premium, and they will increase the longer you go without Part B coverage.
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Cancelling Medigap
Medicare supplement insurance, better known as Medigap, is an additional policy that helps pay for original Medicare copayments, deductibles, and other out-of-pocket costs. Some Medigap policies provide extra coverage, for example, for foreign travel emergencies. Private insurers sell Medigap policies, and federal and state laws regulate the plans.
You can cancel your Medigap policy at any time. However, it is important to note that you may not be able to get it or any other Medigap policy back later. Cancelling your Medigap policy does not affect your Original Medicare benefits in any way. However, it may not be easy to enrol in a new plan or to re-enroll in the same plan at a later date. Insurers may reject you or charge more because of pre-existing health conditions.
To cancel your Medigap policy, contact your insurance company. You should inform them both in writing and over the phone. When you talk to a representative of your insurance provider, they can guide you through the process and inform you of the steps to take to complete the process. Depending on your insurance provider, they may ask you for a formal termination letter or for you to fill out a disenrollment form.
If you bought your Medigap policy during your 6-month Medigap Open Enrollment Period, you can switch to a different Medigap policy. When you get your new Medigap policy, you have 30 days to decide if you want to keep it (called a 30-day free look period). Do not cancel your first Medigap policy until you have decided to keep your second Medigap policy. You will need to pay both premiums for the month that you have both.
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Cancelling Medicare Part B
You can voluntarily terminate your Medicare Part B coverage at any time. However, you may need to have a personal interview to review the risks. There are two ways to drop coverage.
To drop Part B, you usually need to send your request in writing and include your signature. If you received a welcome packet for automatic enrolment in Medicare Part A and Part B, follow the instructions in the packet and send your Medicare card back. If you keep the card, you agree to keep Part B, and you’ll start paying the monthly Part B premium.
Your coverage will end at the end of the month after you file the request. For example, if you file the request on April 5th, your coverage would end on May 31st. If you change your mind about cancelling your coverage, you need to contact the SSA before the date your coverage ends. Contact your local Social Security office.
If you’re dropping Part B but keeping Part A, you will be sent a new Medicare card showing you have only Part A coverage.
If you change your mind and want to sign up for Part B again later, you may have to wait until the next General Enrollment Period (January 1-March 31 each year) to sign up. Your coverage starts the month after you sign up.
Late enrollment penalty: If you don’t qualify for a Special Enrollment Period to get Medicare later, you’ll have to pay a monthly late enrollment penalty for as long as you have Part B coverage. The penalty increases the longer you go without Part B coverage.
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Frequently asked questions
You can suspend your Medicare insurance by cancelling your coverage. To do this, you usually need to send a written request or complete a disenrollment form. You can also call Medicare at 800-633-4227 (TTY: 877-486-2048) for guidance.
There are a few different ways to suspend your Medicare insurance:
- Cancelling premium Part A, Part B, and Medigap at any time.
- Cancelling Part C and Part D during certain enrollment periods.
- Deferring Medicare coverage if you have other qualifying health insurance, such as a large group plan covering 20 or more employees.
Suspending Medicare coverage may be beneficial if you have other comprehensive insurance coverage through a job, your spouse, a union, or another source. It can also be advantageous if you have a health savings account (HSA) that you want to continue contributing to, as enrolling in original Medicare would prevent you from doing so.
Suspending Medicare insurance may result in some risks and considerations:
- If you cancel Part B and change your mind, you may have to wait until the next General Enrollment Period (January 1-March 31) to sign up again.
- You may incur a late enrollment penalty for Part B or Part D coverage if you decide to enroll later and do not qualify for a Special Enrollment Period.
- If you defer Medicare and lose your current coverage, you must enroll in Medicare within 8 months to avoid penalties.
