Is Part B Medicare Coverage Required?

** Is Part B Medicare Coverage required even if you can't use it. No, but... **

Q: My husband is about to turn 65. He recently retired from his job and applied for Social Security benefits. In the next six months we'll be moving to Mexico to live out our retirement years in the sun and enjoy a more laid-back lifestyle while spending less.

I know that Medicare coverage is not good in Mexico; annoying but I can live with it since the coverage doesn't cost me anything additional. The problem is with Medicare Part B. Does he have to enroll and pay for Part B Medicare coverage even if he can't take advantage of its benefits?

A: It sounds like you have a fun and exciting retirement plan in place. Congratulations! But living outside the country does present its own challenges for seniors.

You're right that for U.S retirees, Medicare coverage in Mexico does not exist. Medicare won't pay any benefits for your medical care when you live outside the U.S. You will either have to buy an international health insurance plan, pay your medical bills directly out of pocket, or return to the U.S. for treatment.

As to Medicare Part B, you can opt not to enroll when you apply for Part A, saving the Part B premium—$96.40 a month in 2009 for most recipients. But opting out might possibly be a bad idea. If you decide to return to the U.S. in a few years and want to enroll in Medicare Part B at that time, it will cost you significantly more.

When you join Part B coverage after the age of 65, you'll pay a 10% penalty on your monthly premiums for each year you're "late." Whether this is a wise idea for you or not is something only you can answer. If you remain outside the country for many years—or forever—you'll save a lot of money by opting out of Part B. But if circumstances make you come back after a few years, the extra monthly premium could be a huge burden.

You need to look at your own personal situation to determine if you'll save money in the long run by paying for part B medicare coverage you can't use now so you'll have it if you need it later or if you'll spend less by opting out now and possibly having to pay a lot more by enrolling down the road.

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