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: Go to the head of the class! Yes, she can wait to file until she reaches her full retirement age of 66. Your question hinges on whether your wife is affected by what Social Security calls its "deeming" rules. Under these rules, anyone eligible for more than one benefit when they claim will be deemed to be applying for all benefits at the same time. Social Security does not pay multiple benefits in such situations but, rather, an amount that is roughly equal to the largest available benefit.
When you wife filed for her retirement, you had not yet filed for yours. She thus would not have been eligible to file for a spousal benefit, and so the deeming rules wouldn't have applied to her. Once you did file for your retirement, she had the option to file for a spousal benefit right away, or she could wait until her full retirement age to file for it, by which time this benefit would have reached its maximum amount. This option was available to her under Social Security's old deeming rules.
These old rules were 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. This exemption applies to your wife, so she can file under the old rules.
Correction: I made a mistake in this Ask Phil in answering Paul's question about Social Security, which was the last question in the piece. The answer above has been updated.
Jerry Lutz is a former expert claims representative for Social Security who helps me with some of my Ask Phil answers. I should have run this item by him first! I had originally written that Paul's wife could not wait to file, but Jerry explained that Paul's wife may indeed wait until her full retirement age to file for her spousal benefit.
Since his wife was born prior to Jan. 2, 1954, Jerry said, deeming doesn't apply to her since she wasn't eligible for spousal benefits when she filed for her retirement benefit. So, she would have the option of waiting until full retirement age to receive her maximum spousal benefit. Here is Social Security's official explanation of these filing rights.
For people born before Jan. 2, 1954, the old deeming rules apply, Jerry explained. If such a person files for their retirement benefit before their full retirement age, they are only forced to file for spousal benefits if their spouse's date of entitlement is the same or earlier than their own retirement entitlement date. Thus, they can wait to receive an unreduced excess spousal benefit if their spouse's entitlement date is later than their own. This was the case with Paul and his wife.
Looking at the relative ages of the two spouses is not something I knew to do, nor, apparently, did the Social Security representative handling the filing by Paul's wife.