“Kathleen, I’m confused about a paragraph which I received today in your newsletter to do with Medicare.
“As I read this, and perhaps I’m wrong or I’m reading this out of context, but it looked like you were saying that an American living in Panama must keep Medicare Part A in order to continue collecting Social Security payments in Panama. This is not correct. I opted out of Medicare many years ago simply because for me it’s a complete waste of money and I collect Social Security payments every month. They are automatically deposited into my Panamanian bank account. Medicare is recommended but not essential for a retiree to receive Social Security payments.
“Love your newsletter! Just was confused by this.”
–Rick S., Panama
We have received a great deal of mail on this topic, so we’d like to try to clarify.
Medicare Part A is free and automatic for most Americans collecting Social Security.
At age 65 the government automatically enrolls Social Security recipients in Medicare Part A and B. Part B costs just over US$100 a month, which the government takes out of your Social Security benefit each month.
If you are not yet collecting Social Security, about three months before age 65 you should apply for Medicare.
Part A covers hospitalization, Medicare Part B outpatient care. You can opt out of Part B if you wish, in either of the above scenarios, but we recommend you pay for Part B. Even though Medicare doesn’t cover you outside the United States, if you plan to visit the United States or go to the States for treatment, Part B will kick in.
Bottom line, both parts A and B make sense no matter where you’re living. Combined, these become a robust fallback plan.
Late Enrollment For Medicare Part B
“Kathleen, if a U.S. citizen living abroad does not sign up for Medicare Part B when turning 65 and years later returns to the United States, can he or she avoid the late enrollment penalty that Medicare imposes?
“Keep up the good work!”
–Richard R., United States
No, I don’t believe so. If you don’t sign up when you are first eligible for Medicare, then you have to go through underwriting when you do sign up.
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