Ask the Medicare Specialist

QUESTION:

From Greg: : I just turned 65 and plan on retiring in the summer of 2020. I was told I need to enroll in Medicare and a Supplement before December 7th when the Annual Election Period ends. Is that true?

ANSWER:

No. That is not correct. Depending on what month you retired, you could have cost yourself as much as $1,500 to $2,000 by enrolling in Medicare and a Supplement now, instead of waiting until the summer.

If you or your spouse are working and get insurance through an employer, you can enroll in Medicare any time after turning 65. There are no set dates when that must be done. You will need to have a “Request for Employment Information” form filled out by your employer in order to enroll in Medicare Part B, however. That form needs to be taken to a Social Security office and can be done up to 90 days before the month you want Part B to go into effect.

I’m glad you reached out to me with your question. So many people make mistakes by taking what I call “over the fence” advice from a neighbor, friend, or family member.” Today alone, Counting Greg, I’ve been contacted by three people who got bad advice. I had someone email me after correctly being told by a Social Security representative they would not be able to enroll in Part B until this July. After her husband retired, instead of going on Medicare, they elected COBRA. They didn’t think they had to take Part B, which on the surface makes complete sense. Why should I pay for Part B if I already have good coverage through another source? Unfortunately, to avoid the Part B late enrollment penalty and in order to enroll any time during the year, you must be “working,” not retired. In this case, I’m not sure what this gentleman is going to do. His COBRA ran out and it appears he will be without insurance for outpatient medical services for six months.

I had another email from a client who has a friend she says was told by Social Security he had to enroll in Part B at 65 despite his wife having an employer health plan that was very inexpensive for him to be on. He did what he was told and then bought a Supplement. I don’t know how long he’s been paying for these, but he didn’t need to be. I advised the client to let her friend know he can still opt out of Part B and go back on his wife’s plan. When she retires, he can re-enroll and get another Supplement without going through Medical Underwriting.

As far as opting out of Part B, never do it until you have called us. Don’t take it for granted your HR person at work knows all the rules either. I’ve heard this one plenty of times. “But my Human Resources person told me .... ”

It’s not just bad advice that can be a problem. It’s making assumptions. Let’s discuss some other very common mistakes people make when going on Medicare for the first time.

Assuming the same rules of the Affordable Care Act (Obamacare) apply to Medicare is one. “I thought it was illegal for insurance companies to deny people for pre-existing conditions,” is common to hear. It is for those selling Obamacare plans, but not Supplements. The only time you can get a Supplement without having your current or previous medical conditions taken into consideration, with a couple of exceptions, is when you get Part B for the first time. Those who take inexpensive Advantage Plan HMO’s or PPO’s may possibly never be able to get one. To me, this is the biggest risk of enrolling in an Advantage Plan.

Which brings me to a related mistake. Choosing an Advantage Plan based on what your health is today. “I never go to the doctor so why should I pay more for a Supplement.” Think about it in this perspective. You also have never had a fire in your house, but you still carry insurance in case you do. I’ve been stopped in the grocery store or a restaurant too many times to count by clients wanting to thank me for enrolling them in a Supplement. Their stories are usually the same. They were in great health when they met me, but a year, two, or three later they were diagnosed with Cancer, had surgeries, Chemo, Radiation, etc., and never got a bill. In 2017 I had a client who got a rare parasite from tainted romaine lettuce. She got a bad salad! As outstanding as our Pittsburgh hospitals are, none had the technology to treat her. Only the Mayo Clinic and the Cleveland Clinic did. Thank God she had a Supplement. She was in the hospital 110 days. The bill was over $250,000. She paid nothing. But more importantly, she was able to go to the Cleveland Clinic and she’s walking the Earth today. At the time, only one company offered Advantage Plan HMO’s that had a network contract with the Cleveland Clinic. If she would have had an HMO with any other company, she would not have been able to go there.

The most common mistake, one I still run into practically every day, is people not understanding that an Advantage Plan isn’t a Supplement. Many of these folks have conditions that trigger automatic denials with almost all Supplement companies. Examples of these include A-Fib, Heart Disease, COPD, Insulin Dependent Diabetes, Wet Macular Degeneration, among others. Those who have any of these conditions and don’t choose a Supplement when going on Part B for the first time will likely never be able to get one in the future.

It’s not too late to call us to see if you would be wise to investigate other plans for 2020. You can also email me directly with questions at aaron@getyourbestplan.com