Declining Medicare while under disability before age 65

[GaryB75446]

I have recently been approved for disability SS. I am 63 years old. They automatically signed me up for Medicare part B and the monthly costs.I don't need or want Medicare since I continue to be covered by my employer's group Medical (I'm on Long Term Disability). Before I decline Medicare I want to make sure I understand the 10% penalty.

My understanding is I would only be penalized if I need to re-sign up for medicare before I'm 65 and once I reach 65, there is no penalty. I've gotten conflicting advice from the SS folks and the Medicare folks. One says I would be penalized for the rest of my life and the other says there's no penalty as long as I sign up at 65 (which my employer requires). I would appreciate any pointers to where the correct answer is documented so I can make the correct decision.  Thank you!

[GailL1]

@GaryB75446 

Something doesn't seem right here - so just making sure of your situation.

You said:  I have recently been approved for disability SS. I am 63 years old. They automatically signed me up for Medicare part B and the monthly costs. I don't need or want Medicare since I continue to be covered by my employer's group Medical (I'm on Long Term Disability). Before I decline Medicare I want to make sure I understand the 10% penalty.

A person on SSDI (Social Security Disability Insurance) who is less than 65 years old does NOT qualify for MEDICARE (none of it)  until they have been on SSDI for (2) years unless you have (ALS) or end stage renal disease (ESRD).  They waive the wait period for these conditions.

If that is your situation then yes, you would be allowed Medicare immediately - and it would be just as if you were at the age of 65.

Either way, you really MUST understand how this relates to your employer coverage because that is gonna determine what Medicare Parts you actually NEED now or can be put off until you either lose employer coverage or it is switched to a retiree type. 

A lot of employer plans may require that you sign up for Medicare Part A (Hospital Insurance) - usually premium free since this is the Medicare Part that is paid for with your working years contribution.  Then the employer coverage works with this part of Medicare on a hierarchy schedule  of who pays 1st or 2nd.  

But if either of those conditions mentioned above are applicable to you - you may need to reassess your Part B and perhaps Part D Medicare options now - based on your employer plan, when your LTD might end.

All I am saying here is, based on the info you provided here, your situation may be more complicated than the usual / normal.  

[ReTiReD51]

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@GailL1  You’re over thinking and reading too much into his question.

His question is if he incurs a penalty with Medicare while under 65 and on Medicare because of a disability will the penalty carry over to when he is entitled to Medicare because of age at 65.

An AARP expert says No, here’s a  Link  to that expert’s opinion.

He’s not asking if he’s met the criteria to getting Medicare disability or age-related Medicare. You’re just assuming he hasn’t met the criteria. Trust what he says, he’s been on long-term disability and wants to decline Medicare. Keep it simple.

[Tonster521]

@ReTiReD51 It is not as simple as you indicated. There are other factors that GaryB did not provide, knowingly or unknowingly, that will affect the decision to enroll with Parts B and D now that he is entitled to Medicare due to disability. First, are there 100 or more employees? Second, does GaryB have "current employment status"? I suspect that GaryB is not actively working due to disability. Generally, LTD benefits have a six (6) month waiting period. So, he could be not working for longer than 6 months. Because the SSA generally does not approve many initial disability applications, GaryB may have been not working for 12 months or even longer if he had to appeal an initial SS denial to Reconsideration or an Appeals Judge. If subsequently approved for SS Disability, his SS Disability Award may be retroactive to an earlier date. I am linking info from the Code of Federal Regulations (CFR) that is important in GaryB's situation. This is why I previously suggested that he review the most recent SPD from his employer and Plan Document as well to determine if has coverage with the Group Health Plan (GHP). As I mentioned in my earlier posting, some employers are generous (knowingly or unknowingly) even if they are not liable. If the issue is covering the cost of a physician office call, this may overlooked and is moot. However, should the issue becomes who pays for a catastrophic claim before attainment of age 65, it is critical that Gary B makes the correct decision. Saving the Parts B and D premiums may be minimal compared to cost of a catastrophic claims which with the wrong decision may be his cost. 

[ReTiReD51]

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@Tonster521  if you don’t try to surmise, theorize or hypothesize, GaryB’s question is very simple with a simple answer. Gary has obviously done his homework, because I’ll tell you now very very few people know about that penalty and I’ll bet you were unaware of it until now.

I don’t pretend to be an expert but I’ve learned in my seven years’ experience as a volunteer counselor with the Senior Health Insurance Information Program (SHIIP) don’t try to bedazzle folks with Medicare laws and regulations. Just answer their question clearly, concisely and to the point.

The questions I get asked most “What’s the difference between original Medicare and Medicare Advantage” and “show me how to use Medicare.gov.”

[Tonster521]

@ReTiReD51 This is a follow up to my recent reply. I thought this article from Patricia Barry, AARP Ask Ms. Medicare, is appropriate for folks thinking about dropping Medicare Part B. https://wikis.westchesterlibraries.org/sbic/wp-content/uploads/2015/12/AARP-Article.pdf There are other folks that write about the perils of dropping Part B. Here is another from Josh Schultz which is current (2021). https://www.medicareresources.org/medicare-eligibility-and-enrollment/why-you-cant-afford-to-get-med... I hope O copied and pasted the articles correctly. If not, Patricia's article dated Aprol 2016 may be found at aarp.org/bulletin17. Josh's article can be found via google search.

[Tonster521]

@ReTiReD51 It is called analysis and is a skill that is needed to correctly answer the question in GaryB's case as well as others who qualify for Medicare prior to age 65 due to disability. GaryB did not provide pertinent info such as how long does his GHP continue. Is it continued for life? Until age 65? Some amount of time such as 6 months, 1 year, 2 year or another period of  time (generous employer)? Is it continued pursuant to COBRA? Another law (i.e., Workers' Comp, Occupational Disease, Black Lung, etc.)? Does GaryB's employer have 100 or more employees? What is GaryB's current employment status? He obviously stopped working some time ago. These are all important questions. Based on the answers, GaryB may need to enroll in Medicare Parts B and D even though he does not want such coverage. Medicare may be his primary coverage. If his GHP is deemed to be a secondary payer under the MSP provisions, his costs may be greater than just a 10% per 12 month period increase in Medicare Part B premium. GaryB did not indicate his opinion regarding Medicare Part A. So, how do you know the answers to these questions? Have you reviewed the SPD for the GHP? Have you contacted the employer regarding current employment status?GaryB asked for pointers so he could make the correct decision. If GaryB is still reading this thread, perhaps he can provide the pertinent info. 

With regard to your bet, I don't want to take your money. I have worked with Employee Benefits (both Retirement and Welfare) as well as SS Old Age (aka Retirement), Survivor and Disability Income in administrative, managerial, and fiduciary capacities since 1971. Although I stopped working in a structured work capacity in 2015, I still do Pro Bono work from time to time and consult when work is available and travelling is not required. I commend you for your counseling efforts with the SHIIP. People need help when many benefit programs are as "clear as mud". However, my suggestion is to brush up on the law and regs. inasmuch as that is were the answers are found. As I recall, the 30 or so hours of education/training required by most SHIIP does not get into the laws and regs. which govern many of the benefits.

[Tonster521]

My link did not load. So, I am trying again https://www.govinfo.gov/content/pkg/CFR-2011-title42-vol2/pdf/CFR-2011-title42-vol2-sec411-104.pdf I think I got timed out the first time. Hopefully it worked this time.

[ReTiReD51]

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@GaryB75446 

You understand it correctly. When you turn 65 Medicare will reset the clock and give you a second initial enrollment period and Medicare coverage begins anew as though you never had it before.  AARPlink 

[Tonster521]

@GaryB75446 There are additional factors to consider regarding your decision to enroll with Medicare Parts A, B, and D or Part  C (Medicare Advantage). First, you need to obtain a copy of your Employer's Summary Plan Description (SPD) and all Summary Modifications if the SPD is not current. You may also request a copy of the Plan Document which will be quite lengthy or a copy of the group insurance policy if the Plan is insured. In either approach, there should be a Section in the documents that addresses your situation. You can read pertinent info about Medicare Secondary Payer provisions in articles such as the one I am linking https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Reco... . However, your situation will be governed by the SPD, etc. In other words, do not assume your employer will pay first unless you see it in writing. Some employers are very generous and may pay health care benefits even though they are not liable. Do not bet on this happening especially if you incur catastrophic medical expenses. Because you may not be employed even though your employer may be continuing your health care coverage, the SPD, Plan Document, etc. should stipulate how long your coverage will continue (i.e., 1 year, 2 year, etc.). Thereafter, your employer may offer retiree health care benefits via a different plan; and, of course, a different SPD, Plan Document, etc. You will need to review that info as well. MSP rules generally apply when you are employed or if you covered through a spouse's employment.