You are not required to take Medicare, but refusing it has real costs

No, you do not have to accept Medicare when you become covered under SSDI. Social Security will enroll you automatically after you have been on SSDI for 24 months, but you can turn it down. However, declining Medicare means you lose access to hospital insurance (Part A) and medical insurance (Part B), and you will pay more out of pocket for medical care. Most people on SSDI keep Medicare because the cost of going without it is higher than the cost of the premiums.

The choice matters most if you have other insurance through a job, a spouse, or a former employer. If you have coverage that is as good as or better than Medicare, you may be able to refuse Medicare without serious financial risk. But if you have no other insurance or only catastrophic coverage, turning down Medicare usually costs you more in the long run.

Key Takeaways

  • Social Security enrolls you in Medicare automatically after 24 months on SSDI, but you can refuse it by contacting Social Security in writing.
  • If you refuse Medicare Part A (hospital insurance), you lose coverage for hospital stays, skilled nursing care, and hospice, and you cannot get it back without a penalty.
  • Refusing Part B (medical insurance) means you pay the full cost of doctor visits, lab work, and outpatient care, plus a permanent surcharge if you enroll later.
  • You can keep Medicare while working and earning income, and your coverage does not change if your SSDI payments stop.
  • If you have employer health insurance or coverage through a spouse, you may be able to refuse Medicare without penalty, but you should confirm this with Social Security before you decline.

What happens if you refuse Medicare Part A

Part A covers hospital stays, skilled nursing facility care, home health services, and hospice. If you refuse Part A, you are responsible for the full cost of these services if you need them. A single hospital stay can cost tens of thousands of dollars, and Medicare Part A covers 80 percent of these costs after you meet your deductible.

Once you refuse Part A, you cannot enroll in it later without a penalty, even if your circumstances change. The penalty is a permanent 10 percent increase to your Part A premium for each year you could have had it but did not. If you refuse for five years and then change your mind, your premium will be 50 percent higher for the rest of your life. This penalty applies even if you later lose other insurance and have no way to pay for hospital care.

The only exception is if you have group health insurance through an employer or a spouse's employer. In that case, you can refuse Part A without penalty as long as you are covered by that plan. Once that coverage ends, you have eight months to enroll in Part A without a penalty.

What happens if you refuse Medicare Part B

Part B covers doctor visits, outpatient surgery, lab work, imaging, and other medical services. If you refuse Part B, you pay the full cost of these services out of pocket. A doctor visit that Medicare would cover for a copay might cost $150 to $300 without insurance, and a specialist visit can cost more.

Like Part A, Part B carries a permanent penalty if you refuse it and enroll later. The penalty is a 10 percent increase to your Part B premium for each year you could have had it but did not. Unlike Part A, this penalty lasts for the rest of your life, even after you finally enroll. If you refuse Part B for three years, your premium will be 30 percent higher forever.

You can avoid the Part B penalty if you have creditable coverage—health insurance through an employer or a spouse's employer that is at least as good as Medicare. You must tell Social Security that you have this coverage before you refuse Part B. If you do not notify them in writing, Social Security will assume you are refusing coverage without a valid reason, and the penalty will explore.

When you might refuse Medicare without penalty

You can refuse Medicare without penalty only if you have other health insurance that Social Security considers creditable coverage. Creditable coverage means the insurance is at least as comprehensive as Medicare and covers the same types of services. Employer health plans and coverage through a spouse's employer usually may have access to. Veterans benefits, TRICARE (military family coverage), and some state Medicaid programs also count as creditable coverage.

To refuse without penalty, you must notify Social Security in writing before your Medicare coverage begins. You can do this by contacting your local Social Security office, calling 1-800-772-1213, or submitting a written statement to Social Security. You will need to explain what other coverage you have and provide proof that it is creditable. Social Security will review your request and confirm whether you can refuse without penalty.

If your other insurance ends, you have a window to enroll in Medicare without penalty. For Part A, you have eight months after your other coverage ends. For Part B, you also have eight months, but the penalty clock does not reset—it only stops running while you had creditable coverage. This means if you refused Part B for two years, then had employer coverage for one year, then lost that coverage, you would still owe a penalty for the two years you refused.

How Medicare affects your SSDI payments and work

Having Medicare does not change your SSDI payment amount. Your benefit is based on your work history and the age at which you became disabled, not on whether you have health insurance. You receive the same monthly payment whether you have Medicare, Medicaid, or no insurance at all.

You can continue to work while on SSDI and keep Medicare. If your earnings are high enough that your SSDI payments stop, your Medicare coverage continues for at least 93 months (about 7.5 years) after your payments end. This is called Extended Medicare Coverage, and it is one of the strongest reasons to keep Medicare even if you are working. After the 93-month period ends, you can continue to buy into Medicare by paying the full premium, but you cannot get it back for free.

If you lose Medicare coverage because you refused it, and then your work situation changes and you can no longer work, you cannot get Medicare back without a penalty. This is why most people on SSDI who work keep their Medicare coverage—the cost of the premium is usually much lower than the cost of going without it.

How to refuse Medicare or change your decision

To refuse Medicare, you must contact Social Security in writing. You can mail a letter to your local Social Security office, call 1-800-772-1213 and ask to speak with a representative, or visit an office in person. You will need to state clearly that you are refusing Medicare Part A, Part B, or both. If you have other insurance, include proof of that coverage and explain why you believe you can refuse without penalty.

Social Security will send you a written confirmation of your refusal. Keep this letter, because you will need it if you want to enroll later or if you need to prove you refused coverage for a specific reason. If Social Security denies your request to refuse without penalty, they will explain why and tell you how to appeal.

If you change your mind after refusing Medicare, you can enroll during the General Enrollment Period, which runs from January 1 to March 31 each year. Coverage begins on July 1 if you enroll during this period. However, if you refused without a valid reason, you will owe the permanent penalty. If you had a valid reason (such as losing employer coverage), you may be able to enroll without penalty during a Special Enrollment Period.

What to consider before you refuse

Before you refuse Medicare, think carefully about what could happen if you need medical care. A single hospital stay, emergency surgery, or serious illness can cost hundreds of thousands of dollars. Even if you are young and healthy now, medical emergencies happen without warning. Medicare Part A covers these costs; refusing it means you cover them yourself.

Also consider the long-term cost of the penalty. If you refuse Part B for two years and then enroll, you will pay 20 percent more for Part B for the rest of your life. If you live to 85, that penalty could cost you tens of thousands of dollars in extra premiums. For most people, the cost of keeping Medicare is much lower than the cost of refusing it and paying the penalty later.

If you have employer coverage or coverage through a spouse, confirm with Social Security that it qualifies as creditable coverage before you refuse Medicare. Do not assume your insurance is good enough—Social Security has specific rules about what counts. Getting this confirmation in writing protects you if your coverage changes or if Social Security later questions your refusal.

Frequently Asked Questions

Can I refuse Medicare Part A but keep Part B?

Yes, you can refuse either part separately. However, both parts carry penalties if you refuse without creditable coverage. Most people either keep both or refuse both, because the penalty for refusing one part usually outweighs any savings.

What if I refuse Medicare and then lose my job and my employer insurance?

You can enroll in Medicare during a Special Enrollment Period without penalty if you lose creditable coverage. You have eight months after your coverage ends to enroll. If you wait longer than eight months, you will owe the permanent penalty for the time you were uninsured.

Does Medicare cost money if I'm on SSDI?

Part A is free for most people on SSDI. Part B has a monthly premium, which is usually deducted from your SSDI payment. The premium amount changes each year. You can find the current premium on the Medicare website or by calling 1-800-MEDICARE.

If I refuse Medicare, can I get Medicaid instead?

Medicaid and Medicare are separate programs, and refusing one does not automatically enroll you in the other. Medicaid is run by your state, and rules vary. You can be on both Medicaid and Medicare at the same time. Contact your state Medicaid office to learn whether you may be covered.

What happens to my Medicare if my SSDI payments stop because I'm working?

Your Medicare coverage continues for at least 93 months after your SSDI payments end, even if you are working and earning a lot of money. After 93 months, you can continue to buy into Medicare by paying the full premium. This is one reason to keep Medicare even if you are working and your SSDI payments have stopped.