You can turn down Medicare Part A and Part B, but the decision has real consequences

Yes, you can refuse Medicare when you first become may be able to access at 65, and you can also drop coverage later if you already have it. But "opting out" does not mean you stop paying Medicare taxes — it means you go without hospital and doctor insurance during the years you decline it. If you return to Medicare later, you may face permanent premium increases, and you will have a gap in coverage that could leave you paying medical bills out of pocket.

The rules differ depending on whether you have other health insurance through work or a spouse's job. If you do, you have more flexibility. If you do not, declining Medicare is usually a costly choice.

Key Takeaways

  • You can refuse Part A (hospital insurance) and Part B (doctor insurance) when you turn 65, but you must do so in writing through Social Security.
  • If you have health insurance through current employment — yours or your spouse's — you can delay Medicare without penalty, but you must tell Social Security you are still working.
  • If you decline Medicare and have no other coverage, you pay all medical costs yourself, and your Part B premium will increase by 10 percent for each year you did not have it.
  • Once you stop working and lose employer coverage, you have a limited window to sign up for Medicare without penalty — usually eight weeks after your job ends or your coverage stops.
  • Dropping Medicare after you have enrolled is harder than refusing it at 65; you can only do so if you have other may have access to coverage in place.

Declining Medicare at 65 if you have employer coverage

If you or your spouse are still working and have health insurance through that job, you can turn down Medicare Part A and Part B without penalty. This is the main situation where opting out makes financial sense. You keep your employer plan, and Medicare stays available to you later.

The catch: you must tell Social Security in writing that you are declining Medicare because you have current employer coverage. straightforward not signing up is not enough. You need to submit a form or letter to your local Social Security office stating that you are still employed and covered by a group health plan. Social Security uses this information to know that you are not subject to the late-enrollment penalty when you do sign up later.

When you or your spouse stops working, you have eight weeks from the date your coverage ends to sign up for Medicare without penalty. This window is called your Special Enrollment Period. If you miss it, Part B premiums will be permanently higher.

Declining Medicare at 65 with no other coverage

If you do not have employer insurance and you turn down Medicare, you are uninsured. You will pay for all doctor visits, hospital stays, prescriptions, and tests yourself. This is a significant financial risk, especially as you age.

You will also face a late-enrollment penalty on Part B if you change your mind later. The penalty is 10 percent of the standard Part B premium for each full year you did not have it. If you declined for five years, your premium will be 50 percent higher than the standard rate — and that increase is permanent, for as long as you have Medicare.

Part A (hospital insurance) does not have a late-enrollment penalty, but you still cannot sign up retroactively. Any hospital bills from the months you were uninsured are your responsibility.

Dropping Medicare after you have already enrolled

If you are already on Medicare and want to stop, the rules are stricter. You can only drop Part A and Part B if you have other health insurance that is considered creditable coverage — typically an employer plan, a union plan, or TRICARE (military coverage).

You cannot drop Medicare straightforward because you want to. You must have the other coverage in place first, and you must request the disenrollment in writing through Social Security. If you drop Medicare and then lose your other coverage, you cannot re-enroll until the next general enrollment period (January 1 to March 31), which means you could have months without any insurance.

If you drop Part B but keep Part A, you will still be charged the Part B premium unless you formally request to drop it. Many people make this mistake and end up paying for coverage they are not using.

What happens if you have no coverage and get sick

If you declined Medicare and have no other insurance, hospitals and doctors will still treat you in emergencies. But you will receive a bill for the full cost. Hospitals may offer payment plans or financial information, but you are responsible for negotiating those terms yourself.

Prescription drugs are another major cost. Without Medicare Part D (prescription coverage), a month of medications can cost hundreds of dollars. Some pharmacies offer discount programs, but these are not the same as insurance.

If you cannot pay medical bills, they can go to collections and damage your credit. Some providers may sue for unpaid debts. This is why most financial advisors recommend staying on Medicare even if you have other coverage — it acts as a safety net.

Documenting your decision to decline Medicare

If you decide to turn down Medicare, do not straightforward ignore the enrollment notices. Instead, contact your local Social Security office or call Social Security at 1-800-772-1213 and ask for a form to decline coverage. The form is called a CMS-20033 (Statement Regarding Your Enrollment in Part A and/or Part B).

Fill out the form, sign it, and keep a copy for your records. This creates an official record that you declined Medicare intentionally. Without this documentation, Social Security may enroll you automatically, and you will have to go through a more complicated process to unenroll.

If you are declining because you have employer coverage, write on the form or in a cover letter that you are employed and covered by a group health plan. Include the name of your employer and the date your coverage began. This protects you from the late-enrollment penalty later.

Frequently Asked Questions

Do I still pay Medicare taxes if I opt out?

Yes. Medicare taxes (1.45 percent of your wages) are withheld from your paycheck as long as you are working, regardless of whether you are enrolled in Medicare. Once you are 65 and retired, you do not pay Medicare taxes, but you also cannot get a refund for taxes you paid while working.

Can I drop just Part B and keep Part A?

Yes, you can drop Part B while keeping Part A. However, you must request this in writing through Social Security. If you do not formally drop Part B, you will continue to be charged the premium even if you are not using it. Part A has no monthly premium if you or your spouse paid Medicare taxes for at least 10 years.

What if I missed the important date to sign up for Medicare without penalty?

You can still sign up during the general enrollment period (January 1 to March 31 each year), but your Part B premium will be 10 percent higher for each year you were may be able to access but not enrolled. This penalty is permanent. If you have a valid reason for the delay (such as employer coverage you did not know about), you may be able to request a waiver, but you must contact Social Security to ask.

If I have Medicare and get employer coverage, can I drop Medicare?

You can drop Part B if you have current employer coverage, but you should keep Part A because it has no monthly premium and covers hospital care. To drop Part B, contact Social Security in writing and explain that you now have employer coverage. Make sure your employer plan is active before you submit the request.

What counts as creditable coverage for dropping Medicare?

Creditable coverage is health insurance through an employer, union, TRICARE, the Veterans Health Administration, or certain government employee plans. It does not include Medicaid, short-term plans, or discount programs. If you are unsure whether your coverage qualifies, ask your insurance company or contact Social Security.