Answer: No. It’s 100% false and probably the most common misinformation that’s passed around by people who don’t know the rules or regulations of Medicare. 

If you or your spouse are actively working and getting health insurance benefits from that employer, you can opt out of Medicare Parts A, B, and D without fear of any late enrollment penalties. 

In addition, if you lose employer health coverage, either voluntary or involuntary, you can then sign up for Medicare Part B immediately, at anytime during the year, ensuring there’s never a gap in coverage.  

Bad advice is abundant 

I’ve said it 1,000 times, when it comes to anything Medicare related, do not listen to what we call “over the fence advice” from friends, family, coworkers, and even employees of Social Security or someone in your Human Resources Department. Never opt in or out of Medicare Parts A or B until you reach out to us here at The Health Insurance Store. Making the wrong decision can be ridiculously expensive. 

I recently worked with a client who was in a situation like Joe, had good employer health insurance that cost nothing, yet paid for Medicare Part B over 10 years unnecessarily due to bad advice and lack of research. She threw away almost $20,000!

There are also countless people who have opted out of Part B when they shouldn’t have. We’ve met retirees, many public school teachers, who got five to seven years of health insurance as an early buy out incentive package that lasted past age 65 and opted out. Even though these people were receiving no or low cost health insurance, they weren’t “actively working,” which disqualifies them from opting out of Part B without penalty. The penalty for failing to get Part B after first becoming eligible accrues at 10% per year. It  lasts forever and is based on the current year Part B premium which means those charges increase ever time Part B does!

What about those with VA or Federal retiree health benefits?

Although they can without penalty, we almost never recommend those with VA or Federal retiree health benefits to opt out of Part B! There’s too much volatility in those programs to risk future complications and cost! What you may save in the short term could wind up being much more expensive down the road!

Not everyone working past age 65 should opt out of Medicare

I want to make it clear that not everyone who works past age 65 or has a spouse who does, should opt out of Part B. Premiums on many employer health plans are going as much as 25% annually. Often, these costs are passed onto employees in the form of larger payroll deductions, higher deductibles, co-pays, and total out of pocket medical and prescription expenses. Due to this trend, I estimate that close to 50% of those working past 65 an/or their spouses are actually best to enroll in Medicare and a Supplement or Advantage Plan. We’re also seeing many employers who are giving their staff a pay increase as an incentive to opt out of company benefits, making a move to Medicare an easier decision to make. 

Again, anyone who is planning on working past age 65 and gets employer provided health insurance should reach out to us four to six months before their birthday to determine which is best, staying on employer coverage or opting out and going on Medicare. 

Don’t assume the coverage you have at work is a good

We also invite those who are already 65 and getting employer health insurance to have us evaluate your situation during your annual election period, when any changes in company benefits or costs are announced. That can easily be done on brief phone call or even via email. Don’t assume your health benefits at work are a good value if you’re eligible for Medicare! 

If you have any questions regarding this or any other Medicare, health, or life insurance related topic or would like to make an appointment, give us a call or email me personally at @Aaron@GetYourBestPlan.com.