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Can you opt out of Medicare and still collect Social Security?

By on February 8th, 2012
Filed: Caregivers, Consumers, Disabled, Early Retirees, Facts, Medicare, Medicare, Self-Employed, Seniors

It’s kind of an odd question, but we do get it. And, according to a recent ruling from a Federal appeals court the answer is, “no.”

Some people would  prefer to keep their private insurance, after they turn 65. And, presumably, by opting out of Medicare they’d leave  more dollars in the system for someone else who wants or needs it. It seems logical, especially when you consider the economics.

Last year the Washington Post (WAPO) reported on the gap between what we pay in taxes for Medicare and Social Security and what we get in exchange.

Using data from the Urban Institute, the WAPO reported that…


…the average-wage two-earner couple together earning $89,000 a year that retired in 2011 would have paid $114,000 in Medicare payroll taxes during their careers, but would receive medical services – including prescriptions and hospital care – worth $355,000.

The article went on to say…

The same hypothetical couple retiring in 2011 will have paid $614,000 in Social Security taxes, and can expect to collect $555,000 in benefits. They will have paid about 10 percent more into the system than they are likely to get back.

So, essentially, the average taxpayer turning 65 in 2011 paid $728,000 in payroll taxes and gets $910,000 in benefits. What we lose in Social Security, we make back – and then some – in Medicare.

When you look at the numbers that way, having the option to decline Medicare and keep Social Security seems like a bad deal for the beneficiary, but a good deal for taxpayers. And, it makes this news  reported in the Associated Press a little harder to understand…

…a federal appeals court ruled that senior citizens who receive Social Security cannot reject their legal right to Medicare benefits, in a rare case of Americans suing to get out of a government entitlement.

Former House Majority Leader Dick Armey is among the five senior citizens who sued to stop their automatic eligibility for Medicare. But the appeals court ruled in a split decision that the law gives them no way to opt out of their eligibility if they want to keep their Social Security benefits.

It may be hard to understand why someone would want to opt out of Medicare, especially when the data from the WAPO article suggests  that letting people opt-out could save the program money. It’s probably a rare question for most Medicare-eligible Americans, but in case you wanted an answer, at least for today, we have one.

Have other tough questions about Medicare? Let us know here at Get Smart, Get Covered and we’ll see if we can answer them.


Medicare has neither reviewed nor endorsed this information

About Nate Purpura

Nate Purpura is a 15-year veteran of print and broadcast journalism, corporate communications, PR and internet marketing. He’s spent the last decade working in the health care and insurance industries. Over fifteen years he’s covered numerous areas of health care including pharmaceuticals, health and wellness programs, chronic disease management programs, cutting-edge diagnostic tools, Medicare and health insurance, and online marketplaces (exchanges).

2 Comments Add Your Comment

David Fava on Tuesday, May 8 @ 5:57 pm

I am 53 and on disability. I do NOT want Medicare because it supersedes insurance the State of CA provides as I am a retiree after 30 years. My State health coverage provides the care I need but with Medicare, I cannot get the care I need and I am told that my State covered health care is now secondary to Medicare so if Medicare does not cover something, neither does my my state health coverage.

Medicare does not cover Marriage and Family Therapy or Acupuncture either.

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