How to Disenroll from Medicare plans

Medicare is a highly acclaimed health insurance program, combining affordability with vast, comprehensive coverage and many options. However, that doesn’t make it the perfect policy for everyone, and for some, canceling Medicare may make more sense than keeping it. For those who want to drop coverage, here’s how to cancel Medicare and the consequences and alternatives to canceling it.

Why cancel Medicare?

The primary reasons for canceling Medicare include having an opportunity to join another health insurance plan (such as an employer-sponsored health plan) or moving out of the country. These are instances when keeping Medicare may be more costly than beneficial.

With employer-sponsored insurance, you may want to opt out of Medicare due to your employer’s health insurance having more coverage or being more affordable. If you move out of the country, your Medicare coverage won’t apply, and by keeping it, you’re paying premiums for a policy that is impossible for you to use.

How to cancel Medicare Part A

Disenrolling in Medicare Part A is generally only possible if you have to pay premiums for it. Canceling Part A requires contacting Social Security, which can be done over the phone by calling 1-800-772-1213, sending a letter in the mail, emailing, or visiting your local Social Security office. After this, you will likely need to send a written request with your signature.

Another way to cancel Part A is if you recently received a welcome packet from Medicare after being automatically enrolled. This packet will come with instructions for disenrolling, which will also involve sending your Medicare card back. If you wish to cancel Part A but keep Part B, you can follow all instructions except for returning your Medicare card.

If you enrolled in Part A during the Initial Enrollment Period (which spans from three months before the month of your 65th birthday to three months after) and got the premium-free version, you generally won’t be able to cancel.

How to cancel Medicare Part B

Disenrolling from Medicare Part B is the same as disenrolling from Part A since Parts A and B constitute Original Medicare. The only difference is that canceling Part B coverage means you’ll have to return your Medicare card if you’ve recently gotten a welcome packet.

If you keep Part A and disenroll from Part B, you’ll get a new Medicare card showing only Part A coverage.

How to cancel Medicare Part C

Medicare Part C, commonly known as Medicare Advantage, has a few ways to disenroll. Since it’s a form of private insurance, you can cancel by calling your insurance provider and requesting a disenrollment notice, sending your provider a written notice with your signature, or contacting Medicare.

When you drop a Medicare Advantage plan, you return to Original Medicare. Your chance to drop Medicare Advantage and return to Original Medicare is during the Open Enrollment Period from October 15 to December 7.

How to cancel Medicare Part D

Dropping Medicare Part D follows the same steps as disenrolling from Medicare Advantage. Like Medicare Advantage, Medicare Part D is a private insurance plan, hence it has the same cancellation process. However, unlike Medicare Advantage (in which canceling automatically enrolls you in Original Medicare), canceling a Medicare Part D plan will not result in you being automatically enrolled in another type of prescription drug coverage.

Disenrolling from Medicare Supplement Plans

Canceling a Medicare Supplement Plan (also known as Medigap) should be done with careful consideration. This isn't like canceling any other type of plan mentioned in this article - both in how it can be done and what the consequences of disenrollment are.

Dropping a Medigap policy can be done at any time of the year, as the contracts are renewed on a monthly basis. You'll need to contact your insurer if you want to cancel. How you'll be able to cancel will depend on the insurer - some allow for over-the-phone cancellation, while others require a written notice.

If you cancel your Medigap policy and wish to re-enroll:

• You may get your policy back, but it could cost more.
  
• You may not be able to get the policy you had before, meaning you'll have to enroll in a different Medigap policy.
  
• It's possible that you may not be able to get any Medigap plan at all.
  

How to cancel Medicare online

Original Medicare cannot be canceled online. As for Medicare Advantage and Medicare Part D, some insurers offer policyholders the ability to request a disenrollment form via the company’s website. However, the process cannot be both initiated and completed online.

What if I enroll in a different health insurance plan before canceling Medicare?

Even if you enroll in another health insurance plan before canceling your Medicare plan, you could still enter a coverage gap after your Medicare coverage expires. Health insurance plans typically have waiting periods lasting 30 to 90 days. During the waiting period, you’ll pay premiums without getting coverage from your plan until that time has passed.

If your Medicare coverage ends while you’re still in the waiting period, it will be as if you have no health insurance. You’ll have to pay out-of-pocket costs if you get medical treatment before your new plan’s coverage kicks in.

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How could re-enrolling in Medicare after canceling affect premiums?

If you change your mind and re-enroll, your premiums can be higher than when you joined Medicare. If you originally had to pay the premium for Part A and wanted to re-enroll after canceling:

• Your monthly premium in 2023 will be $278 or $568 (depending on how long you or your spouse paid Medicare taxes), plus a late enrollment penalty. This fee can add up to 10% to your monthly premium. After being eligible, you'll have to pay this late enrollment penalty for twice the number of years you went without Part A.
  

As for Part B:

• Part B’s monthly premium is $164.90 (higher if you report an annual income above $97,000 if you file your tax return individually or $194,000 if you file jointly). Part B has a late enrollment penalty that increases by 10% each year you go without it. This will be added to your monthly premium, and you’ll pay that additional percentage for as long as you have Part B.
• Part B has a late enrollment penalty that increases by 10% per year you go without it. This will be added to your monthly premium, and you'll pay that additional percentage for as long as you have Part B.

Medicare Advantage doesn’t have a late enrollment penalty, but you must have Medicare Parts A and B to join it. Your late enrollment penalty for Part B would still apply since having Medicare Advantage still requires you to pay Part B premiums in addition to your Medicare Advantage plan’s premiums.

If you cancel Medicare Part D but enroll in a plan with creditable drug coverage (drug coverage that’s similar or comparable to Part D), you can go back to Part D without facing a late enrollment penalty. However, if you go 63 days or longer without Part D or creditable drug coverage, you will have a late enrollment penalty that you’ll have to pay for as long as you have Part D. This penalty increases by 1% every full month you don’t have drug coverage. That percentage is multiplied by the “national base beneficiary premium,” which is $32.74 as of 2023. The resulting figure is rounded to the nearest dime and added to your Part D premium.

When is it better to delay Medicare enrollment?

Delaying enrollment may be the better choice when you’re contributing to a Health Savings Account (HSA) or you already have health coverage from an employer. You may choose to delay because of wanting to contribute to an HSA. If you join Medicare, you can no longer contribute to your HSA without incurring a tax penalty. Also, you won’t be able to open a new HSA once enrolled in Medicare.

If you choose to delay, contact the Social Security Administration (SSA) beforehand because once you begin receiving Social Security benefits, you’ll automatically be enrolled in Medicare.

Delaying enrollment is also good if you have health insurance through an employer. Once your employment ends or your health coverage stops (whichever comes first), you enter a Special Enrollment Period (SEP), an eight-month period in which you can join Medicare without penalty.

When is it better to switch to a different Medicare policy?

You don’t have to cancel Original Medicare to change your coverage. If you’re dissatisfied with your Original Medicare plan, you may want to consider switching to a Medicare Advantage policy during the Annual Enrollment Period (October 15 to December 7). This is the only time you can switch from Original Medicare to Medicare Advantage.

Medicare Advantage bundles inpatient and outpatient coverage, and many plans offer drug coverage. You may also get bonus benefits such as dental, vision, and hearing coverage.

You can switch to a different plan if you have Medicare Advantage. These plans come in varieties such as:

• Health Maintenance Organization (HMO)
• Preferred Provider Organization (PPO)
• Private Fee-for-Service (PFFS)

You can switch from one Medicare Advantage plan to a different Medicare Advantage plan during the Annual Enrollment Period, as well as the General Enrollment Period (January 1 to March 31). Unlike canceling Medicare coverage, switching Medicare policies won’t result in late enrollment penalties if you have a change of heart later.