17 Oct What happens if I cancel Medicare Part B coverage?

Q. I went on early Medicare at 61 due to end stage renal disease. Medicare became secondary to my primary employer group health. I elected both Parts A and B on Medicare. Since I’m still working, I’m paying a high income surcharge quarterly premium for the Part B. Can I cancel the Part B for now to save money until Medicare becomes my primary at age 65? Is there any penalty that would affect me once I get back on Part B at age 65?
— Still working

A. We’re sorry to hear about your health challenges.

Yes, you can cancel Medicare Part B because you are still working and you have an employer sponsored health care plan.

Medicare Part B is typically for medical services and outpatient care, which in many cases, would become the primary insurance once you turn 65, said Betty Thomas, a chartered financial consultant and certified financial planner with Peapack Private Wealth Management in Summit.

There would not be a penalty to re-enroll in Medicare Part B if you enroll during the Special Enrollment Period, she said.

“The Special Enrollment Period will begin eight months after your employer coverage ends or you leave your job, whichever happens first,” she said. “During this time, you would be able to enroll in Part B, Part C, which is a Medicare Advantage Plan and Part D which is a drug plan, without late penalties.”

Usually, a Medicare Advantage Plan is from a private insurance company that could cover Part A and Part B benefits instead of the original Medicare, she said.

To cancel Medicare Part B, you would need to contact the Social Security Administration to start the process, Thomas said. You may have to provide proof that you have other medical coverage from your employer stating that the coverage is active.

It is also important that you are aware of the timing for cancellation, she said.

“Typically, cancellation would occur during a Special Enrollment Period or during the General Enrollment Period,” she said.

If you cancel during the General Enrollment Period, which is between Jan. 1 through March 31 each year, the coverage will end on Dec. 31 of that year,” she said, noting that there would not be a penalty to re-enroll in Medicare Part B if you enroll during the Special Enrollment Period, but it is important to speak with a Social Security representative or Medicare expert to ensure that you follow the correct procedure for your situation, as rules and regulations regarding Medicare can change over time.

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This story was originally published on Oct. 17, 2023.

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