- August 14, 2020
Today, we’re going to answer the question, “Can Medicare drop you?” In other words, can you ever lose your Medicare coverage?
If you’re like most people, the thought of losing your health insurance is pretty scary. No one wants to face the uncertainty and financial risk of a surprise diagnosis or serious accident without health insurance. Which is why we’re going to dive into the different ways Medicare can drop your coverage, and teach you exactly how to avoid losing your Medicare coverage.
Can Medicare Drop You?
As you probably know, Medicare has four parts, Part A, B, C, and D. Each of these parts has different rules and guidelines, so to answer the question, “Can Medicare drop you?” we’ll need to examine each Medicare part separately.
Can Medicare Part A and B Drop You?
Original Medicare is called Part A and B. The only way Medicare A and B can drop you is if you don’t pay your premiums. For most people, Medicare Part A is absolutely free. As long as you’ve paid 40 quarters (10 years of work) into the Medicare tax system, Medicare A is free to you. Chances are, you’ve paid 40 quarters into Medicare taxes, so you’ll never have to worry about paying for (or getting dropped by) Medicare Part A.
Medicare Part B, on the other hand, has a monthly premium. This year, the Part B premium is $170.10. Again, the only way you can lose your Part B coverage is if you fail to pay your premium. If you’re on Social Security, your Part B premium will automatically be taken out of your SS check, so you won’t ever have to worry about missing a payment. Those of you not on Social Security will have to pay the Part B premium bill every quarter or you can set up a monthly bank draft through your bank account.
Can Medicare Supplemental Plans Drop You?
Many people in Original Medicare A and B purchase a Supplemental plan to help cover the expenses Medicare doesn’t take care of. If you purchase a Supplemental plan, you will be responsible to pay a monthly premium for the coverage. Typically, Supplemental premiums are between $100 and $250 per month. Once again, the only way the Supplemental insurance carrier can drop you is if you fail to pay your monthly premiums. Unlike other Medicare plans we’ll look at later, Supplemental plans are written for life, so no matter your age, how many claims you have, or where you move within the U.S., you’ll never have to worry about getting dropped by the plan.
Most people set up a bank draft payment for their Part B monthly premiums. This keeps things simple for you and helps ensure you never forget to make the payment. If you set up an automatic bank draft payment plan, just make sure to update your account and routing number if you ever move or switch banks. Because, once again, if you fail to make your monthly payment, your Supplemental coverage will be cancelled after a 30-day grace period.
Can Medicare Part C (Advantage Plans) Drop You?
Medicare Part C plans are called Advantage or replacement plans. The only way you can qualify for an Advantage plan is if you’re enrolled in Medicare A and B. This means you will have to pay your Part B monthly premiums if you purchase an Advantage plan. If you don’t pay your Part B premiums, you can be dropped from the Advantage plan.
Some Advantage plans have an additional monthly premium, some do not. Typically, if your Advantage plan has a premium it will only be around $20 to $50 per month. If your plan has a premium but you fail to pay it, the Advantage plan can drop you.
Another reason you could be dropped from your Advantage plan is if the company withdraws the plan. They are not allowed to drop your plan mid-year (unless they go out of business, of course), but since Advantage plans are only written for one year, the company can terminate the plan on December 31st. Sometimes insurance companies aren’t happy with the plan or they aren’t doing well as a company, so they decide to drop the plan. If this happens, you will have to enroll in a new Advantage plan for the coming year.
The final reason you could be dropped from your Advantage plan is if you move. Advantage plans are written only for a specific service area. Typically, service areas compass an entire city or metropolitan area, including all zip codes and counties within it. But if you move out of that metro area, most likely you will have to switch to a new Advantage plan.
Can Medicare Part D (Drug Plans) Drop You?
Medicare Part D plans are prescription drug plans. Drug plans come with a premium, but if you have an Advantage plan, it will typically be embedded within the plan. If, however, you stayed with Original Medicare A and B or purchased a Supplemental plan, you will have a stand alone drug plan with a separate premium. Drug plan premiums are usually in the low range, typically between $13 and $70 per month. And just like the other Medicare plans, if you fail to pay your monthly premiums, the Part D plan can drop you.
Similar to Advantage plans, drug plans can be withdrawn from the market. If the company or plan isn’t doing well, they can cancel your plan at the end of the year, meaning you will have to find and purchase another drug plan for the coming year. Further, like Advantage plans, drug plans are only written for specific areas. So if you move out of your drug plan’s service area, you will have to purchase a different plan.
The only way Original Medicare A and B can drop you is if you fail to pay the monthly premiums. For most people, Part A is completely free, so they only have to worry about paying their Part B premiums. Similarly, the only way Supplemental plans can drop you is if you fail to pay the monthly premiums. In contrast, you can be dropped from both an Advantage and a drug plan for three reasons: you didn’t pay your premiums, the company decided to drop the plan, or you moved out of the plan’s service area.
We understand how difficult making the right Medicare decisions can be. To take the next step, watch our full course here, or schedule a free one-on-one call with a certified Medicare School Guide who can answer your questions, compare plans options, and even help you enroll. Click here to get started.
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