This week’s questions from Jim
I’m currently in the market for a Medicare Supplement (I turned 65 and went on Medicare Parts A & B in December 2021) but have some unusual circumstances. My wife is a retired teacher and several years ago as an early retirement package, she got 7 years of outstanding health benefits for both her and I at a cost of only $100 per month. This coverage acts in lieu of a supplement for me currently since it is secondary to Medicare even though it’s the same insurance she had while working. It will expire in mid-2024. I’m looking for a supplement now, due to the fact I’m an insulin dependent diabetic with other pre-existing health conditions. Based on your columns, I understand that it will be difficult or impossible for me to get a Supplement plan if I wait until then, as companies are only required to accept me during my Medicare Initial Enrollment Period (IEP). I’m looking for advice and want to know if I’m missing anything here.
Answer
Guaranteed Issue (GI)
Wow! This is one of those topics I wish I had twice the space to elaborate on.
Jim is indeed missing something. Although the Initial Enrollment Period (IEP), which runs the month of one’s Part B effective date through the six months that follow, is the only time most people can enroll in a Medicare Supplement at the “preferred rate” without their medical history being considered, there are a couple of exceptions. Jim will qualify for one.
Anyone who loses employer or retiree health coverage, be that voluntary or involuntary, gets what is known as Guarantee Issue (GI). Those like Jim, who qualify for GI, must have their applications accepted by every Supplement company that sells plans in their zip code at the preferred rate. Be aware however, not all companies are required to offer those with GI plan N. Currently, only one company does, and their premium is higher than the plans we place 95% of our Supplement clients with. If Jim wasn’t taking expensive medications, I might advise him to enroll in Plan N now, so he can get it at the lowest possible premium. But because he pays much less for his brand name medications on his current plan vs what he would with Medicare Part D prescription coverage, it’s going to be best to stay where he is and not buy a Supplement until 2024 when he and his wife will be forced off their current plan, even if that means paying a bit more for Plan N or G at that time.
HOP Medicare Plan
Jim also has another choice when his coverage ends. He can enroll in the HOP Medicare Plan, which is available to retired public school employees and their spouses. It will be more expensive than plans G or N since unlike his wife, he won’t qualify for the $100/month premium assistance the school district supplies former employees. However, the rate for HOP rarely goes up and it’s outstanding coverage. Depending on what Supplement premiums are in 2024, it’s definitely a possibility I will recommend he go that route.
I want to point out that Jim did the right thing by enrolling in Part B even though his wife’s insurance plan is as good as it gets, and not having Part B wouldn’t lower his out of pocket medical or prescription costs whatsoever. Common sense would be to opt out of Medicare Part B and save the $170/month premium. But in this case, you can throw common sense out the window. When getting insurance from a former employer and not actively working, failure to enroll in Part B upon turning 65 results in a penalty of 10% for every year one goes without. If Jim wouldn’t have enrolled in Part B and went to do so in July of 2024 when his wife’s seven years of insurance was up, he would have been told his Part B could not go into effect until July of 2025, at which time he would have been subject to a 35% Part B late enrollment penalty, costing him approximately $70 extra per month for the rest of his life!
The Fine Print
There are so many unpublicized and little-known rules, regulations, and nuances of Medicare, Supplements, Advantage Plans, and Part D that only agents like me and the others at The Health Insurance who have years of experience helping people through “unusual circumstances,” as Jim puts it, are aware of and well versed. He reached out to me with his question just a few days ago. We exchanged several emails in which I explained his rights and options. I also invited him to set up an appointment for a short call or visit so I can go over them in more detail and ease his concerns. There will be no cost for my services even though I won’t provide him with a plan or get paid a commission. He has no need for one. Had he contacted other agents or replied to the hundreds of solicitations he’s getting via mail and phone, many agents would have been eager to sell him the Supplement he said he was in the market for, despite it not being in his best interest. That is not how our agency operates.
Thank you!
If you have any questions or concerns regarding this column topic, or would like to make an appointment for a no-cost consultation, please feel free to give us a call – we would be happy to help. 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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