Help! I lost my job and just turned 65. What do I do about health insurance?
Editor’s Note: Journalist Philip Moeller is here to provide the answers you need on aging and retirement. His weekly column, “Ask Phil,” aims to help older Americans and their families by answering their health care and financial questions. Phil is the author of the new book, “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil.
Anonymous — Florida: Help! I am turning 65 next week and was shocked to be let go from my job last week! My company had paid my medical and dental, and I paid these benefits for my husband, who is 17 months younger than me. My company gave me forms to go on COBRA and said it will make my COBRA payments for a year and continue to deduct from my severance what I pay for my husband. What should we do?
Phil Moeller: I’m so sorry that you lost your job. However, in the haze that can accompany such surprises, I urge you not to simply take COBRA and assume you’re done with health insurance concerns for the time being. You’re not done yet.
COBRA does not qualify as employer group insurance for Medicare eligibility. So when you turn 65 next week, you need to sign up for Medicare as soon as possible. There are two adverse consequences if you don’t: You might face late-enrollment penalties from Medicare, and what’s worse, your COBRA coverage might not pay your covered health claims.
You should check with your COBRA insurer, but it’s common for COBRA insurers to not be the primary payer of covered insurance claims for people who are eligible for Medicare.
For the same reason, you need to look into supplemental coverage now as well. I lay out all these choices in my Medicare book, and I hope reading it can take at least some of the deer-in-the-headlights panic out of this process.
As for your husband, he will need to get individual coverage on your state Obamacare exchange. This will be a hassle, but it should not be any more expensive than COBRA and possibly less expensive.
There are some Medicare Advantage policies that include a modest dental benefit. But all dental policies are relatively modest, so you might be better off just buying a separate policy from a private insurer. In any event, I would not let dental concerns be the determining factor in what types of supplemental Medicare coverage is best for you.
Best of luck, and again, I’m so sorry you lost your job and you have to go through this health care stress as well.
Patsy – Pennsylvania: When dying in a nursing home, an oncology unit in a hospital or in a hospice center, why isn’t a patient allowed hydration or food and medicated to the point of being barely conscious? Can a patient who does not want to be starved to death choose to be given minimal medication — just enough to take the edge off, but remain conscious?
Phil Moeller: Either the patient or their legal decision maker should be able to request whatever drugs and nutrition are needed for the patient to be comfortable in their final days. The primary purpose of hospice is to provide palliative care, which by definition, is to be provided with the patient’s comfort as the primary goal.
I can only assume you were involved with treatment of a loved one or friend that failed to meet these objectives. I am so sorry this happened.
There can be many reasonable differences about the kind of care a patient should receive at the end of their life. This is something the patient or their caregiver should learn about ahead of time, including having discussions with their doctors and caregivers at the facility where the patient will receive end-of-life care.
I hope that others reading about your experiences will be prompted to take charge of their own end-of-life care. Advance planning is essential here.
Having said this, I know that real-life situations can be hectic and often do not unfold as planned.
Sal – New Jersey: In your opinion, how much would future Social Security cost of living adjustment (COLA) increases need to be for all Medicare B premiums to be the same for everyone except the higher earners? Charging people different Medicare premiums is not fair and needs to stop.
Phil Moeller: What a great question! I don’t have a precise answer. The impact of the hold-harmless rule, which is what your question concerns, depends not only on future rates of consumer price inflation but also on future Medicare Part B premium increases. These, in turn, will be keyed to future rates of health care inflation that are not known today.
I think I’m on safe ground, however, in saying that it would take several years of at least moderate inflation before Part B premiums would be equalized. While consumer prices have ticked up as of late, it’s not clear to me that we will see even moderate COLAs during the next few years.
If I were running the zoo — one of my not-so-fond names for our national government — I would change the rules to get rid of this situation. This is easier said than done.
For example, ending the hold harmless rule would allow the same Medicare premiums to be paid by everyone except for wealthy enrollees. But it would expose Social Security recipients to declines in benefits if Medicare expenses outstrip the pace of inflation.
If you do not find this exposure acceptable, then we’d need to devise a mechanism that works like the hold harmless rule, but does not produce different payment levels for Medicare enrollees. To do this, we’d need rules that protected Social Security benefits from being eroded by either inflation or higher Medicare premiums and that prevented Medicare health inflation from triggering differential premium impacts.
One solution would be for the government to step up and pay any annual amounts by which Medicare Part B premiums exceeded the annual COLA. This has occurred, at least in part, on an emergency basis the past two years. Making it permanent would require Washington to further subsidize Medicare premiums. I wouldn’t hold my breath for this happening while Republicans control the White House and Congress.
The fiscal conservative in me is also obligated speak up. Such a solution might be “fair” and certainly attractive to Social Security and Medicare recipients. But it wouldn’t be so good for the national debt!
John: If a participant in a high-deductible health plan is reaching 65 shortly, what would happen if he elected to take a Social Security spousal benefit on his wife’s earnings while deferring his own Social Security retirement benefit? Could he still contribute to a health savings account?
Phil Moeller: No. Any type of Social Security benefit, even one taken on a spouse’s earnings record, will automatically enroll a beneficiary in Part A of Medicare. This invalidates continued tax-advantaged contributions to an HSA. The only way to avoid Part A in this situation is to forego Social Security benefits entirely.
Paul: My wife started collecting Social Security in November 2015 and soon will turn 65. I started collecting in February 2017, when I turned 66. We are being told she must start collecting spousal benefits now, because I started collecting. I thought she could wait until she turned 66 and get more out of the spousal benefit.
Phil Moeller: No, she can’t wait. Because she is already collecting her retirement benefit, she is automatically deemed to also be claiming her spousal benefit as soon as she became eligible for it. This eligibility was triggered when you filed for your own benefit.
The ability to avoid deeming was largely eliminated in major changes to Social Security laws enacted in 2015 by Congress. There is a limited exemption from deeming for people who were at least 62 as of the beginning of 2016. When they reach their full retirement age, they can file a restricted application for only one benefit. But because your wife had already filed for her retirement benefit, this option is no longer open to her. Sorry!