Question from Colleen:
At age 62, I got an early retirement buyout from my employer. Part of the package was that mine and my husband’s insurance would be paid until I was 65, which is in two months. My husband, Dave, is 69. When we went to Social Security to apply for his Part B, not only were we told he would have a late enrollment penalty of more than $50 per month for the rest of his life, it turns out he also can’t apply for Part B until January of next year and it won’t go into effect until February. I thought if I had health insurance from an employer, Dave didn’t have to enroll in Part B. That’s what we were told by a representative at Social Security a few years back. I’m shocked. Is there anything we can do about it? Also, what is my husband supposed to do about health insurance until February 1st?
Answer
Common sense is that if I’m getting insurance paid for by a third party, including my former employer, I don’t need to pay the monthly Medicare Part B premium of $164.90. However, how the government has written the laws and regulations that in order to avoid the Part B late enrollment penalty and be able to opt in at any time during the year, one must be “working” or a spouse of someone who is and being provided employer coverage. You’re not working for that company anymore Colleen. Therefore, Dave is unfortunately going to pay the penalty. The Social Security rep you talked to most recently is correct and he won’t be able to get his Part B until February of 2024 and will be subject to this penalty for the rest of his life unless the Social Security administration decides to grant some sort of amnesty in the future.
You can file an appeal, but unless there’s a recording of the conversation Dave had with the Social Security employee who gave him the bad information that he could avoid the penalty while still opting out of Part B at age 65, I’m 99% sure, it will be denied.
As far as what Bill can do for insurance until February; he has two choices. Take COBRA, which is an extension of the insurance you have now, only he will be responsible for the entire cost. Colleen, you don’t have to elect COBRA so Dave can enroll. That’s often not understood and lowers the cost by 50%. The other option is an ACA (Affordable Care Act) plan, which some refer to as Obamacare. Neither are ideal because COBRA generally costs from $600 to $1,000 per month and an ACA plan between $550 to $800. Dave is not eligible for a premium subsidy through the Marketplace because he’s Medicare age.
When to enroll in Medicare Parts A and B and who can do so without worrying about a late enrollment penalty are probably the most frequent questions we get. Here’s my advice to those who want to be certain. Don’t listen to your friends or family. Don’t count on your Human Resource manager at work, anyone at Social Security, or another agent or agency. Call The Health Insurance Store and ask to speak to one of our licensed agents. We’ve been in business for over 15 years and are experts on this topic. We will not give you advice unless we are 100% certain it’s correct.
A few reminders since the column is shorter than usual.
You don’t have to wait until the Annual Election Period (AEP) starts in October to have a conversation with one of our agents. Consultations are always no charge in person at one of our offices, over the phone, or a Zoom-style internet meeting. For those on Medicare who may want to consider a change from a Supplement to Advantage Plan in 2024 due to rising costs of premiums and medications, now is a great time to start learning about how the two types of Medicare plans differ, what the savings will be along with the value of the extra benefits are compared to Supplements and also how much more you might spend on medical care with an HMO or PPO vs your Supplement, as well as other important facts that are vital before making a decision so important. I highly recommend scheduling an appointment prior to AEP.
I do a live radio show the 1st and 3rd Monday of each month on WMBS Uniontown from 1:15pm to 3. We discuss all things Medicare and take live questions. You can listen by going to the station’s website, WMBS590.com.
Lastly, I’d like to invite our readers to join our new Facebook group with the same name as the columns. Visit our website, GetYourBestPlan.com, and click on the banner at the top of the home page. You will then be able to read our two weekly series: Truths, Tips, and Tricks where we give warnings about issues such as the one addressed today as well as many others, and how to avoid situations that can be very stressful or costly. In Feel Good Fridays, one of the agents writes about a client’s real problem or issue they called us about, how we solved it and saved them money.
Please never hesitate to reach out to me directly with a question for a future column or one of a more personal nature. Email me at aaron@getyourbestplan.com. Thanks for reading everyone!
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Don’t forget to join our new Facebook group, “Ask the Medicare Specialist”, which has the same name as the column, where we post exclusive content and information. Go to our website, getyourbestplan.com, and click on the banner on the homepage to become a member. Thanks for reading everyone!
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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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