Ask the Medicare Specialist
QUESTION:
I have two questions regarding last week’s column. 1) You stated, “you need to understand all the differences between Advantage Plans and Supplements. Failure to do so can affect you for the rest of your life.” What did you mean by that? 2) You also stated that those who are staying on their employer plans after they turn 65 do not have to enroll in Part B. I thought if you didn’t, there’s a penalty when you do enroll?
Before I get to the question, I want to let everyone know that the support staff and agents of The Health Insurance Store will continue to be available to help and advocate for our current clients if they have any issues or questions about medical bills, prescriptions, claim denials, etc. We are also able to council and advise anyone who lives in Pennsylvania as well as facilitate enrollments for those who are going on Medicare for the first time. We will also assist those who may lose health insurance from their employer. Although we cannot meet face to face, we can take care of all needs over the phone, online, and through the mail. Consultations are always free of charge. We hope everyone stays safe and healthy during this trying time.
ANSWER:
Regarding question #1: Most people are unaware that companies who sell Supplements utilize “medical underwriting,” meaning they can discriminate against people based on their current or previous health conditions and deny applicants for coverage. There are a few exceptions, the most common being going on Medicare Part B for the first time due to turning 65, retiring after 65, or receiving Medicare after being awarded disability. Companies must accept everyone in these scenarios.
Those who choose Advantage Plans when first going on Medicare and have certain pre-existing conditions such as insulin dependent diabetes, heart disease, auto immune disorders, Lymphoma, A-Fib, among others, may never be able to get a Supplement as long as they live. That’s what I meant when I said not understanding the differences between the two types of plans can affect you the rest of your life. There are a couple of exceptions. Those who chose an Advantage Plan when they were new to Medicare have 12 months to move to a Supplement without going through underwriting just like those who are going on Part B for the first time. However, there are limits to when one can make this change. If by October, the next Annual Election period, it has been over a year since you enrolled in your Advantage Plan HMO or PPO, you have a pre-existing condition such as the ones I listed, you will not be able to get a Supplement. If you went on Medicare for the first time in the past 11 months, chose an Advantage Plan, and are concerned about this, call us immediately. I can’t stress enough how important it is to act right now, however.
Regarding question #2: Who needs to have Medicare Part B and who doesn’t is one of the most widely misunderstood regulations for those 65 or older. If you or your spouse are “working” and getting insurance from an employer, neither the employee nor the spouse needs to enroll in Part B! There’s no penalty in this case, and you can request Part B to start the first day of any month you choose when you decide to retire. Although most people are better off to stay on their plan at work, it’s not always best to stay on an employer plan. It’s more likely a spouse is better off going on Medicare as many employers don’t pay as much towards the premium for spouses and dependents as they do the employee. We can easily advise those who will continue to work past age 65 if staying on an employer plan or going on Medicare is the better option.
I used quotation marks around the word working because we have met far too many people, specifically teachers, who got low or no cost health insurance as an early retirement package and didn’t enroll in Part B. It isn’t until they go to sign up that they find out they should have enrolled at age 65 and now have a penalty, 10% for every year they went without, because they weren’t “working.” In addition, people in this position can only request to be enrolled in Part B between January 1st and March 31st with an effective date of July 1st. This means if someone were to find out the bad news in April or May, they would have to go more than a year before Part B would start. The only option for these folks would be COBRA, which can be as much as $2,000 per month for retired teachers, or the Marketplace where plans with $7,000 deductibles cost as much as $600/month. Those aren’t great choices. Instead of taking advice from friends, family, your HR person at work, representatives at Social Security, or others, all of whom have given our clients bad advice on plenty of occasions, call or email us. One of the licensed agents will give you the correct answer when it comes to taking or opting out of Part B. Please call or visit our website if you would like to make an appointment or have questions about this topic or any other that is health or Medicare insurance related. You are also welcomed to email me personally, aaron@getyourbestplan.com.