During our working years we most likely have health insurance as part of the benefits package. However, when we turn 65 many company employees are unsure of the protocol for health benefits under Medicare if you continue to work. Or, if you are the spouse of someone who is still working and have benefits under their health plan - does your benefit continue?
Does the employee or spouse stay on the "company plan?" Does the employee or spouse need to sign up for "Part B" Medicare? What does "Part A" cover and do I have to pay for it?
Part A = Hospital Visits
(there is a deductible) no cost per month when you have worked 10 years
Part B = Doctor’s visits
(there is an annual deductible- currently $166.00) $121.80 per month
Part C = These are called
“Advantage
Plans” – usually HMOs and PPOs
(some have no monthly premium and just
co-pays and most also include Plan D benefits)
Part D = Prescription
Plans (cost depends on plan and medications you take)
Medicare Supplement (Medigap) – Allows you to choose any doctor who
takes Medicare and usually pays all co-pays and out-of-pocket costs. Does not
pay for presciptions.
I just worked with a new client who turned 65 in June. His wife is younger and still employed so they have health coverage through her company plan. I sent him very specific questions to ask HR prior to his birthday and they didn't know the answers. We checked several times for clarification and they ultimately told him that he did have to sign up for "Part B" with Medicare (currently costing $121.80 per month) and that they would cover his Prescription (Part D) Benefits but not his Health Benefits.
He did sign up for "Part B" and paid a quarterly premium since he is not yet taking Social Security and payments usually are deducted from your Social Security check each month. He also purchased a "Medigap" plan so that he can see any doctor who takes Medicare in any state.
Last week he complained to his wife that her company was still charging them $150.00 per month for his health coverage. She went to HR Director and asked why and was told that they had made a mistake. He was still covered under the company benefit plan. The next day his doctor called to say that they had billed Medicare (as the primary provider) for a recent surgery and the bill had been denied. Medicare stated that his "company plan" was the primary provider and should pay first.
When you take "Part B" Medicare and are covered by a "Company Plan" the Company Plan is the primary payor and Medicare pays second. When you don't have a company plan, Medicare is the primary payor and your Medigap or Plan C pays second. You may have to pay co-pays depending on the type of plan you have.
Due to the error from HR we were able to file an Appeal with the Medigap company asking that his premiums be returned. He has a good chance of it being resolved in his favor.
When I began helping people with Medicare we did not have "Part C" plans. "Part B" cost $60.00 per month and a full-coverage Medigap plan cost about $50.00 so for around $100.00 per month you had excellent coverage. NOT ANYMORE. Part B premiums went from $104.90 per month in 2015 to $121.80 per month in 2016. Social Security payments have only paid a COLA increase 2 times in 5 years and it amounted to a $2.50 per month increase.
If you do not sign up for "Part B" and "Part D" at the time you turn 65 and do not have other coverage, there are penalties that you will be forced to pay for the rest of your life. It's important to work with someone who knows how the system works and has the desire to make the calls or do the research if it is a sticky situation like this one.
