Medicare isn’t mandatory. There are options to delay coverage if you’re not ready when you first become eligible. But, if you don’t have creditable coverage, you’ll get stuck with penalties. If you’re not quite ready to join Medicare when you turn 65, there are some options to help delay your coverage. Find out when Medicare is and is not mandatory below.
Can You Opt-Out of Medicare?
Many people often wonder if it’s possible to opt-out of Medicare when they turn 65. Well, several factors can come into play here. Ultimately, this depends on your specific situation. You can opt-out of Medicare if you have creditable coverage through an employer. Yet, this means you must get employer coverage from a larger company. Now, delaying Medicare can result in Part B penalties. Also, buying Marketplace insurance after turning 65 is costly. Once Medicare eligible, you’ll lose your subsidy. So, for many, Medicare makes the most financial sense.
Opting out is an option if you have employer benefits and aren’t retiring. But, if you’re retiring, you’ll need coverage. Below we’ll discuss some factors you’ll want to keep in mind for enrollment in Medicare.
Is it Mandatory to Go on Medicare at Age 65?
For some, not enrolling in Medicare can be a poor decision. But, some people won’t receive a penalty for delaying enrollment. Let’s take a look at a few different scenarios.
Factors that come into play:
Are you retired?
- If retired, you more than likely need to enroll at 65 years of age.
Are you still employed?
- If the company has fewer than 20 employees, you should enroll as soon as possible. If more than 20 employees, you may have options.
Are you happy with your employer group health coverage?
- If you’re happy with your coverage, you can keep using it as your primary insurance and use Medicare as secondary insurance.
Your Initial Enrollment Period begins three months before your sixty-fifth birthday and ends three months after you turn 65. Thus, you have seven months to enroll.
If you choose to enroll after your Initial Enrollment Period ends, you could face a penalty. Or worse, delaying Part B could result in having to wait for the General Enrollment Period, which adds to the cost of your late penalty.
What Parts of Medicare are Mandatory?
Medicare is not mandatory for most people. However, it’s beneficial for eligible individuals to sign up as soon as possible in most cases to avoid penalties.
Enrolling in Part A is mandatory to keep your Social Security benefits. Part A inpatient coverage comes at no cost to most Americans. It’s not mandatory to have Part A but if you’ve worked 40 or more quarters (ten or more years), you’ll get it premium-free. Those who qualify for free Part A should enroll once eligible.
But, if you want to contribute to a Health Savings Account after age 65, delaying Part A makes sense. Once Part A is active, you can’t add to a Health Savings Account.
Is it Mandatory to Have Medicare Part B?
While Part B is optional, penalties can be high if you wait too long. Part B covers physician visits, lab tests, outpatient surgeries, and even Durable Medical Equipment.
If you choose to delay Part B you can pay up to 10% above the standard premium for a period of every 12 months that you don’t carry coverage. Also, the more time that passes the higher the penalty.
When Did It Become Mandatory for Medicare Beneficiaries to Have Part D?
Part D is not mandatory. But, drug coverage is great to have, even when you don’t have a monthly prescription. When you get a prescription for an antibiotic or another temporary drug, it’s nice to know you have coverage.
If you choose to enroll at a later date, you’ll have a penalty. If you have a prescription plan through another carrier and it meets specific standards, you won’t have to pay the penalty.
Those taking medications may find even more financial relief by selecting the mail order pharmacy option through their plan. Mail order options generally mean a three month supply at a two-month or less cost, though this isn’t always the case.
Is Medicare Coverage Mandatory for Government Employees?
Medicare is mandatory for those hired or rehired as state or local government employees after March 31, 1986. Those under a Section 218 Agreement already receive coverage for Medicare. On the other hand, Medicare Qualified Government Employees don’t receive Social Security coverage for their services, but they must pay FICA’s Medicare-only portion.
Is Medicare Mandatory if on Disability?
People who get Social Security Disability benefits are automatically eligible for Part A. Medicare disability eligibility begins after 24 months of disability. Depending on income levels, you may have monthly premiums to pay.
The amount you pay depends on your monthly income. If you’re Medicare-eligible and you delay enrollment without creditable coverage, you WILL get a penalty.
The only instance where a penalty may receive a waiver is when you get extra help or Medicaid.
Is Medicare Mandatory for Veterans?
If you’re a veteran receiving Veterans benefits, Part B isn’t necessary. But, the Veterans Affairs suggests both Part A and Part B. Veterans have a more extensive network of doctors and services when they have Medicare and Veterans Association. By choosing to opt-out or delay benefits, veterans may potentially have penalties when they need Medicare.
Veterans qualifying for TRICARE must have Part B to keep their benefits. To enroll in Part B, you need Part A or at least a Part A effective date. Also, it’s essential to keep your information in DEERS current.
Active duty members and family members can have Part A and TRICARE, and delay Part B. Then, once active duty status ends, you need Part B to keep TRICARE.
Is the Medicare Wellness Exam Mandatory?
Once a beneficiary turns 65 and begins Medicare coverage, they’ll be eligible for their Welcome to Medicare visit. This visit is an initial physical exam, covering some vaccines, blood pressure, height, and weight measurements, a basic vision screening, and body mass index calculation. This appointment isn’t mandatory. If you go to a wellness visit, you must do so within the first 12 months of enrolling in Medicare.
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