Ask The Medicare Specialist

QUESTION:

Question from Mary Ann: How would my Medicare and Supplement arrangement I currently have in place work if I were to get a job that offers full medical benefits? Is this something that could be “paused,” or would the Medicare and my Aetna Supplement be considered secondary coverage to my plan supplied by my employer? Is there some other scenario that might take place, i.e., could my current arrangement with Medicare and Aetna be “cancelled” if I should take a job with medical benefits that I’d want to use?

ANSWER:

I can think of only one situation where you might want to keep paying for Medicare Part B and a Supplement in addition to employer sponsored health insurance; You’re offered coverage through a UPMC or Aetna small group policy that has less than 20 employees at little or no cost and the plan has a high deductible of $2,500 or more that is certain to be met. UPMC and Aetna will not pay claims for outpatient services when someone is eligible for B and has opted out, so in this case, an employee 65 or older must enroll in Part B and pay the $164.90 premium. Adding a Supplement for as little as $75/month to pick up some or all the deductible and the Maximum Out of Pocket ( MOOP) would make sense. Again, this only applies to employer groups that have less than 20 employees on the policy. If you are on a UPMC or Aetna group policy that has over 20 employees, you can opt out of Part B with no concerns.

The reason having Medicare Parts A, B, an employer plan, and a Supplement is almost never necessary is because; a) employer plans are often inexpensive and with reasonable deductibles and MOOPs, alleviating the need for Medicare B at a cost of $164.90/month. Or b) coverage with Medicare A, B, and a Supplement is so comprehensive with little or no out of pocket expenses and a similar or lower cost than employer coverage. If someone has all four types of insurance that Mary Ann talked about, there’s supposed to be a hierarchy. The employer plan is primary if there are more than 20 employees, Medicare secondary, and the Supplement last in line to pick up the difference. For plans with less than 20, Medicare is first, employer coverage second, and the Supplement last. My fear is that it all gets convoluted, and the three disagree who is to pay what. I’ve seen it happen. And while they’re arguing over it and payments aren’t made to the provider, guess who’s going to get billed? The person with all these insurance policies.

What I suggest Mary Ann do if she does take a job that offers a decent health plan at a reasonable cost to her, is opt out of Part B and cancel her Supplement as well as the Part D prescription plan. Whenever she decides to retire or if her employer coverage is no longer a better value, she can enroll in Part B and a Supplement again without going through any underwriting since she would be considered “new to Part B” even though she had it previously.

Another suggestion for those in this situation is to negotiate your salary based on the fact you don’t need employer coverage. Don’t mention it until you’re told what the starting salary offer is. Then ask what they’re willing to pay you if you don’t take their health coverage since you’re on Medicare. Employees ages 60 and above can cost an employer as much as $800 to $1,200 per month to insure! If they’re covering 75% to 100% of the premiums for their employees, which is common, that’s $8,400 to $18,000 per year in expense. A potential employer should be happy to pay someone who has Medicare an extra $3,000 to $5,000 or more in annual salary if he or she isn’t taking their health insurance. It’s a win/win for both parties. With reliable employees in high demand in today’s job market, this is a great bargaining tool.

Also, as I’ve stated in the last two columns, it’s always advisable to have us look over employer coverage compared to Medicare and a Supplement or Advantage Plan to make sure which offers the best value. There’s more to it than just cost and deductibles. Don’t make a decision either way until you get that analyzed. We can do that at no cost and an evaluation likely can be done in just a short phone call.

If you would like to make an appointment for a no cost consultation to go over Medicare options, individual ACA marketplace plans, you’re an employer and would like a second opinion on your group policy, or are interested in life insurance, give us a call or email me personally at aaron@getyourbestplan.com. And keep the great column questions coming!

Also, we’re introducing a new Facebook group, “Ask the Medicare Specialist” where we will be posting exclusive content including our “Feel-Good Fridays” where we discuss a problem a client had that a member of our staff as well as a “Truths, Tips, and Tricks” series where we talk about some other intricacies of Medicare, how to navigate and even take advantage of regulations and available programs. You can join the group via an easy to find link on our website.