Editor’s note: A version of this column first appeared in March 2013.
In some previous columns, I discussed Medicare Part A and Part B in some detail. Generally speaking, most people sign up for both as soon as they qualify, whether at age 65 or at the end of the 24-month waiting period after receiving disability benefits.
Usually beneficiaries who do not sign up for Medicare Part B when they first becomes eligible can be required to pay a 10 percent penalty on Part B premiums for each 12-month period they have failed to sign up. They would then have to sign up during the next General Enrollment Period (January 1 – March 31) and their coverage would not begin until July.
There is, however, a time when it is critical for a person who qualifies for Medicare to decline to take Part B: If you are covered by an employer’s or union’s health insurance as a result of your or your spouse’s current employment, you may want to refuse Part B coverage until that employment ends.
This employment must be current. COBRA and retiree coverage do not count as current employer coverage.
If you are turning 65 and are covered by employer insurance as described above, you should contact whoever administers this health insurance plan to confirm how it works with Medicare. Rules for Medicare coordination for organizations employing 20 or more employees are different than for those with less than 20 employees.
Usually if you have employer coverage, you will gain few if any benefits by taking Part B, will incur the expense of the Part B premium ($109 or $134 per month for most beneficiaries in 2017), and could find yourself unable to purchase a Medicare Supplement when this coverage ends.
You have eight months to sign up for Part B without penalty after losing this coverage. The same conditions apply if you are covered as a result of a working spouse. The key word is working.
The Medicare Part B and Medicare Supplement Connection
Medicare Parts A and B do not cover all health care expenses in full. Many people purchase a Medicare supplement or Medigap policy to cover the costs of most or all Medicare approved health care that is not paid completely by Medicare.
Beneficiaries have a one-time only six-month Open Enrollment Period to buy a Medicare Supplement policy.
This period starts the first month that they are at least 65 and have Part B. During this time, insurance companies cannot refuse to sell them a policy or charge them more because of bad health.
After this six-month period ends, they may be charged more or may not be able to purchase a policy at all because of health issues.
This once only guaranteed issue opportunity is the reason that beneficiaries who are 65 and are covered by an employer’s health insurance should not accept Part B until they lose employer coverage. The Open Enrollment Period will then start at acceptance of Part B.
New beneficiaries under age 65 and receiving Medicare as a result of a disability will find the Medicare Supplement market much less friendly than those who are 65 or older when they first qualify for Medicare.
In Virginia insurance companies are not generally required to grant them an Open Enrollment Period. There is only one insurance company that will sell a Medicare Supplement policy to a new under 65 disabled person.
This policy is a Plan A, which does not cover some very costly coinsurance and deductibles, such as the hospital deductible ($1,316 per benefit period) and days 21 through 100 at a skilled nursing facility ($164.50 per day). It costs over $10,000 per year in premiums.
Anyone needing help in deciding whether or not to refuse Part B or having questions regarding any aspect of Medicare can receive personalized assistance from the New River Valley Agency on Aging at 980-7720.
The Virginia Insurance Counseling and Assistance Program (VICAP) at the Agency can help beneficiaries find answers to their specific Medicare questions.
Deena Flinchum is a retired IT professional who has lived in the New River Valley since 2002. She serves on the board of the NRV Agency on Aging and as an RSVP volunteer. She also serves the Agency on Aging as an insurance counselor.