There are times you may want to get off the ride. That’s okay as long as you do it safely. Just get back on again at another time. The same goes when it comes to cancelling Part B coverage.

Why You May Want to Cancel Part B

There are a number of reasons you could think about cancelling Part B coverage. That doesn’t always mean you should.

• You got a new job that offers its own health plan. This can be tempting, especially if you have family members that also need health care. Remember that Medicare coverage is for you and you alone you, not for your family.
• Your spouse got a new job that covers you. To save on Part B premiums, it may make sense to move over to your spouse’s employer-sponsored health plan.
• You are automatically enrolled in Part B because you were receiving Social Security benefits (or Railroad Board benefits) when you turned 65. If you (or your spouse) are still working and are on your (or your spouse’s) employer health plan, you may consider cancelling Part B to save on premiums.
• You can’t afford your Part B premiums. Unlike Part A premiums which are free to anyone who paid 40 or more quarters (10 years) in Medicare taxes, everyone has to pay Part B premiums. Before you consider cancelling Part B, look to see if you qualify for Medicaid or a Medicare Savings Program to help with those costs. It’s important to have health coverage!

MEDICARE SAVINGS PROGRAMS (MSPs)
There are four different Medicare Savings Programs that can help decrease your Part A and/or Part B costs. Depending on the MSP, it can cover your premiums, deductibles, copays, and/or coinsurance.

Cancelling Part B may save you money in the short term but you also need to think about the long term. You could face late penalties when you sign up for Part B again in the future. You could also find it hard to sign up for a Medigap plan down the road.

When You Sign Up for an Employer Health Plan

To prevent late penalties (a reminder that Part B late penalties last as long as you have Medicare!), two things need to happen.

1. You continue to work.
2. You enroll in your employer’s group health plan.

Large Employer (Hires More Than 20 Employees)

Your decision is easier when you work for a large employer. In this case, they are required to offer you the same health plan they offer to people younger than 65. If you sign up for their health plan, you can defer Medicare Part B without repercussions — as long as you follow the rules.

Once you leave your job or leave their health plan, whichever happens first, the clock for the Medicare Special Enrollment Period starts ticking. You have eight months to sign up for Medicare Part B or late penalties will start to accrue.

Small Employer (Hires Fewer Than 20 Employees)

Small employers do not have to offer you the same health plan they offer to people younger than 65. In fact, they are not obligated to offer you a plan at all. If they do decide to offer you a plan, they can require you to sign up for Medicare.

This puts you in an awkward position. If you do not sign up for Medicare, you will not have access to the healthcare benefits you need. It may be in your best interest to sign up for Part B.

Small Employer Exception

There’s always an exception. Some employers can appear to be a large employer when they’re really a small one. Take the following example.

Corporation A owns two companies, B and C. They have 35 and 15 employees respectively. Corporation A is a large employer. Company B is a large employer too. However, company C has fewer than 20 employers and could be considered a small employer. In that case, they can request a small employer exception through the Benefits Coordination & Recovery Center (BCRC). If approved, they will follow the Medicare rules for a small employer.

ALWAYS DOUBLE CHECK
Do not assume you work for a large employer, especially if your company is part of a bigger group. Depending on their size, it is possible they sought a small employer exception. Reach out to their Human Resources Department to find out about your healthcare options and how their plan works with Medicare.

Medigap Issues

The biggest caveat about cancelling Part B relates to Medigap plans. These plans, also known as Medicare Supplement plans, can help people on Original Medicare (Part A and Part B) save a lot of money! That’s because they help to pay down the costs that Medicare leaves on the table, costs like deductibles, coinsurance, copays, and in some cases, emergency care you receive in another country.

The catch is that there is only one Open Enrollment Period for Medigap. It starts the day you first sign up for Part B and lasts 6 months. After that, the companies that offer these plans can increase your rates or deny you coverage based on any preexisting conditions you have. You will not get a new Open Enrollment Period when you sign up for Part B a second time.

Again, there are exceptions. These relate to what are called guaranteed issue rights. For example, if you opted for a Medicare Advantage plan the first year you were on Medicare, you get another 6 month Medigap enrollment period without medical underwriting if you decide to change to Original Medicare in your second year. Depending on the state you live in, there may be other guaranteed issue rights. Be sure to check them out before you consider cancelling Part B. You do not want to miss out on savings opportunities in the future.

Cancelling Part B Coverage

Cancelling Part B requires you to contact your local Social Security office. There will be a form to complete. However, a personal interview will also be conducted to discuss the risks associated with cancelling Part B coverage.

NEVER EVER CANCEL PART A
Part A is paid for by your FICA taxes and is directly linked to your Social Security benefits. If you cancel Part A, you are effectively cancelling any current or future Social Security benefits too.

 

Civil Action No. 08-1715 (RMC). United District Court for the District of Columbia.

How do I terminate my Medicare Part B. (2022). Social Security Administration. https://faq.ssa.gov/en-us/Topic/article/KA-02713

Medicare Secondary Payer | Working Aged MSP. (2022). Centers for Medicare & Medicaid Services. https://www.cms.gov/medicare/coordination-of-benefits-and-recovery/coordination-of-benefits-and-recovery-overview/medicare-secondary-payer/downloads/msp-working-aged.pdf

Request for Termination of Premium Part A, Part B, or Part B Immunosuppressive Drug Coverage. (2023). Centers for Medicare & Medicaid Services. https://www.cms.gov/medicare/cms-forms/cms-forms/downloads/cms1763.pdf

Small Employer Exception. (2021). Centers for Medicare & Medicaid Services. https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/EmployerServices/Small-Employer-Exception