This week’s question
Is there a cost for Medicare Part A? Is there a penalty if I don’t sign up for it when I turn 65? What, if any, reasons would there for be for me not to choose Part A?
Answer
Let’s answer the questions as well as discuss related topics.
There is no penalty for enrolling after turning 65. And because Part A is free, only one group of people don’t want to enroll when first eligible; those who get their insurance through an employer and have a Qualified High Deductible Health Plan (QHDHP) and want to make contributions to a Health Savings Account (HSA).
I love QHDHP’s and insure myself and my kids with one. I often recommend them to clients as well. The beauty of HSA compatible plans are the tax advantages. Every dollar deposited in an HSA is tax deductible. The max contribution is now $3,550 per year for a single person and $7,100 for a family. Those who are 55 and older can also make an additional $1,000 deposit. Here is the best fact about HSA’s. When you use these funds to pay deductibles, co-pays, as well as dental and vision expenses, the money is never taxed!
Please be advised that only a QDHDP can be paired with an HSA that has these tax advantages. The minimum deductible on these plans is $1,400 for a single person and $2,800 for a family. There are no co-pays for medical services with QDHDP’s. In other words, except for services that are considered “preventative,” everything is subject to the deductible, including prescriptions. Therefore, they may not be a good choice for some, especially those who take brand name medications. If you are interested in exploring a QHDHP and an HSA give us a call or send an email. It’s my belief that there is no better investment right now for people who are relatively healthy than an HSA. Most financial planners will agree.
Those who don’t have a QDHDP or make contributions to an HSA and are still getting insurance from an employer after age 65 should enroll in Part A as soon as they are eligible for several reasons: 1) Part A can eliminate a large portion of a deductible on an employer plan in the event of an inpatient hospitalization. 2) Days 1-20 in a Skilled Nursing are covered by Part A at no cost but are subject to a deductible and coinsurance (the percentage of the bill one is responsible for after the deductible has been met) on an employer plan. 3) In the event of a rare disease or form of Cancer where there was a need to be treated at the Mayo Clinic, Cleveland Clinic, MD Anderson Cancer Center, etc., Medicare Part A would cover any inpatient stay or surgery even if the hospital was out of network with the employer plan. 4) The same would hold true in an emergency hospitalization when traveling out of the service area.
Late enrollment penalty
Remember, Part B does have a late enrollment penalty, although, those who are getting insurance from an employer are not subject to it. That being said, not everyone who gets their insurance from an employer after turning 65 should stay on those plans. As group health insurance prices increase, we’re seeing a trend of employers passing on these costs in the form of higher deductibles and larger premium contributions to the employee. More and more of those who are working past age 65 are better to drop their plan at work, enroll in Part B, and get a Supplement or Advantage Plan. We can evaluate if you are a candidate to do that with just a quick phone call or email. All we need to know is what is being deducted out of your check for health insurance, the plan deductible, coinsurance percentage, and annual Maximum Out of Pocket (MOOP).
New! Life Insurance at The Health Insurance Store
The Health Insurance Store is now offering Life Insurance; a product I’m a firm believer most people need to have. And just like with health and Medicare plans, we are brokers, appointed to provide products from the most reliable and competitive companies on the market. If you’re interested in a policy that covers your “Final Expenses,” one that is designed to protect your spouse, children, or grandchildren, or to investigate Life Insurance as an investment, give us a call.
Thank you!
Please call one of our office locations or email me personally if you have questions regarding this or any other Medicare/ health insurance related topic or to request an appointment for a no cost consultation. I’d like to remind everyone that I do a live call-in talk show called Medicare A to Z every 1st and 3rd Monday of the month on WMBS Uniontown, 590AM and 101.1FM, from 1 to 3 PM. You can listen in on their website, wmbs590.com.
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We proudly serve the health insurance and Medicare needs of the following Pennsylvania areas: Connellsville, Uniontown, Greensburg, Mt. Pleasant, Scottdale, Irwin, N. Huntingdon, Murrysville, Monroeville, Plum, Lower Burrell, New Kensington, Pittsburgh, Plum, Oakmont, Penn Hills, Forest Hills, Wilkinsburg, East Liberty, Lawrenceville, Bloomfield, Natrona Heights, Leechburg, Washington, Morgantown WV, Latrobe, Monnessen, Jeanette, Erie, Edinboro, Northeast, Girard, Fairview, Union City, Harborcreek, Corey, Meadville, Waterford, Ligonier, Kittaning, Somerset, Waynesburg, Fayette County, Westmoreland County, Armstrong County, Butler County, Somerset County, Erie County, Crawford County, Venango County, Allegheny Valley, Pennsylvania
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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.