People With Medicare

Medicare Question of the Month

Each month, our expert showcases a Medicare question submitted by one of our readers. You may submit a question at any time and get a personal response.

This month's question:

I am turning 65 and live permanently outside the country. Do I need to enroll in Medicare?

Answer:
Most newly-eligible people enroll in Part A when they turn 65. Some people can delay enrolling in Medicare B when first eligible and not face a penalty. These include people who are working and have employer-related health insurance (or get health insurance through an actively-working spouse). Those who are newly-eligible for Medicare and do not have employer-related health coverage can face a 10% penalty premium surcharge for each 12 months they were eligible for and not enrolled in Medicare Part B.

Medicare does not provide coverage for services outside the United States, except in very limited circumstances. However, living overseas does not exempt you from the Part B penalty. If you are living overseas and actively-working with health insurance through a group health plan (including a foreign national health plan), you can delay Part B until you retire or lose your employer-related health insurance. You will have an 8-month Special Enrollment Period to enroll in Part B, if and when you return to the states.

If you are retired and live overseas and do not have health insurance through active employment (either through your own or a spouse), there are a few things to consider about enrolling in the various parts of Medicare during your 7-month Initial Enrollment Period when you turn 65:

• Part A: For most people, Part A is free so you should enroll during your 7-month IEP. Medicare benefits are generally not available outside the U.S. But, you can use your benefits when you return to the states and avoid a late-enrollment penalty. (The Part A penalty premium is 10% of the current Part A premium. You would continue to pay the penalty premium for twice the number of years you were eligible for Part A but did not enroll.)
• Part B: Here you will need to weigh the pros and cons of cost. That is, paying the monthly premium for Part B while overseas (without having access to Medicare Part B benefits until you return to the states) versus the cost of paying a (likely hefty) lifetime penalty for not enrolling in Part B when first eligible. Also, after your IEP, you can only enroll in Part B during a certain time of year (between Jan 1 - March 31) with coverage not starting until July 1, so enrolling during your IEP can help you avoid a potential future gap in health coverage. 
• Part C and Part D: To enroll in a private Medicare Advantage Health Plan or a Medicare Part D Prescription Drug Plan, you must live in the plan's service area. Since you are living overseas and do not have an U.S. primary address, you cannot enroll in a C or D plan. When you return to the states, you will have a Special Enrollment Period to enroll in a health or drug plan, if you decide to do so.
• Medigap: Like Parts C and D, you cannot purchase a Medigap policy if you do not have a primary address in the U.S. If you live overseas and enroll in Part B, you will trigger your Medigap Open Enrollment Period. This is the 6-month period after you enroll in Part B (remember, you need Parts A and B to purchase a Medigap policy) during which insurance companies must sell or "issue" you a Medigap policy even if you have health problems. Because of this protection, it is generally the best time to buy a Medigap policy. There is no guarantee when you return to the states that an insurance company must sell you a Medigap policy outside the Open Enrollment Period.

Since more baby boomers may be retiring and living part of the year overseas or traveling overseas, there are some other options to consider for health coverage. Learn more. Remember, Medicare does not generally cover services outside the U.S., only in certain and rare emergency situations.

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