What are the Pros & Cons of not enrolling in Part B Medicare,

when one is living outside of the USA and covered under the National Health Insurance Program of another country?

Our page on Part B late enrollment penalty

Since Medicare benefits are available only in the United States, it may not be to your advantage to pay the premium for Part B medical insurance if you will be out of the United States for a long period of time. But be aware that when you return and sign up for Part B, your premium will be 10% higher for each 12-month period you could have been enrolled in Part B, but were not.

If you return to the United States, you must re-enroll in Part B, but you may only do so from January through March each year, your benefits will not begin until July, (Check out the Petersen Bridge Plan if you need coverage while waiting for Part B to start)  and you may have to pay a premium penalty.   CA Health Care Advocates HICAP

So, how do I figure out the penalty vs paying the premium, which is better?

Examples

Your Initial Enrollment Period ended September 30, 2009. You waited to sign up for Part B until the General Enrollment Period in March 2012. Your Part B premium penalty is 20%. (While you waited a total of 30 months to sign up, this included only 2 full 12-month periods.) You’ll have to pay this penalty for as long as you have Part B. Enrolling in Medicare # 11036  *

******************

Jeremy turned 65 in 2011. He did not sign up for Medicare Part B until 2017.

His penalty is:

10% x 6 years = 60 His penalty is thus 60% on top of the premium 0.6 X $134 (2017 Part B premium) = $80.40 penalty $80.40 + $134= $214.4 Jeremy will pay $214.4 on a monthly basis as his penalty Part B premium.  United Medicare Advisors So, how does the penalty compare to if he had paid the $134 premium for 6 years?

10 years to even out

  Here’s where a web site visitor did a spread sheet.  Spreadsheets are beyond my pay grade.

Web Visitor's Spread Sheet
Web Visitor’s Spread Sheet

Bibliography

medicare.gov/part-b-late-enrollment-penalty

Los Angeles Times 4.26.2015

Enrolling for Part A & B #11036  Page 28 Living outside USA Part B…    

Medicare and You 2020 #10050  
Everything you want to know 

Medicare and you

Different Parts of Medicare 

A = Hospital
B = Doctor Visits - Out Patient
C = Medicare Advantage or Medi Gap
D = Part D Rx 

Video

Understanding your Medicare Choices
Medi Gap vs Medicare Advantage

Topics

How to sign up for Parts A & B
Is  your test, service, or item covered?
Original Medicare Parts A & B
Medicare Advantage Plans & Part D Rx
Supplement Insurance (Medigap)
Low Income Help  LIS
Definitions


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6 comments on “Pros – Cons – Penalty vs Premium if living outside USA

  1. Because I enrolled for Part A from abroad (Italy), and declined Part B, I became a candidate to receive an unsoliticed phone call from a US government employee in Rome who handles SS/Medicare issues!! This person wanted to make sure I understood the issues with respect to Part B penalties. This person was very helpful, but knew nothing about MediGap. He didn’t even know what it was.

    It’s interesting to know that such employees exist.

  2. More on computing Medicare penalties.

    Medicare Part B penalties increment after each full year in which you could have had Part B but chose not to. What then is the date in which you could have had Medicare? You can sign up for Medicare for 3 months before eligibility, and if you do so your coverage date begins on the first day of the month of your 65th birthdate (unless your birthday is the 1st of the month). That, I believe, is the first date at which could have had Part B.

    For example, if you decline Part B in your initial enrollent period in 2018 but opt for Part B in the first general enrollment period of 2019, your coverage will start July 1, 2019. If your birthday is in July, your full-year penalty clock will start on July 1 and will have traversed a full year. If your birthday is in August, the clock will start on August 1 and it will have been only 11 months … hence no penalty for that year.

  3. So, it’s 20% of the standard premium amount for each year ongoing, and that standard premium amount subject to penalty will go up year over year.

    • Yes.

      Unfortunately, there is a “bug” or “snafu” with the indenting system, so when you hit “reply” it doesn’t always show in the correct place. This happened a few months ago and then corrected itself…

  4. Is the Medicare Part B penalty a fixed dollar amount or a percentage?

    For example, if I sign up for part B after a year, and the base premium is $134/mth, my penalty in that year will be $13.40/month.

    Suppose the premium the next year is $140. What will the penalty be in that year? $14 or $13.40?

    • Percentage – See page 7 of Publication 11036 Enrolling in Part A & B * CA Health Advocates.org *

      The late enrollment penalty takes the standard premium amount and increases it by 10% for each full 12-month period that you could have had Part B, but didn’t. For example, if you were first eligible for Part B in July 2015, but didn’t enroll until January 2018, you’d have a 20% late enrollment penalty. The standard premium amount would be increased by 20% for as long as you have Part B.

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