Editor’s Note: Journalist Philip Moeller, who writes widely on aging and retirement, is here to provide the answers you need. 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.
Sue: I am at the end of my Medicare rope! In 2016 (and previously), both mine and my spouse’s Medicare Part B insurance premiums, which are deducted from Social Security, have been the same amount ($104.90). For 2017, my spouse’s amount is $110.00. My amount is $114.00. Why is my amount more than his? It should be the same. We file income jointly, and we have identical Medicare insurance plans. I have pulled my hair out going around in this circle. Medicare tells me not to call them but to call Social Security. Social Security tells me not to call them but my insurance carrier. My insurance carrier says it has no role in setting these premiums.
How would you go about driving this nonsense to ground?
Phil Moeller: This seeming bit of nonsense actually makes sense according to the rules that Social Security and Medicare use to set Part B Medicare premiums.
Any changes in your Part B premiums are not related to your income but to your individual Social Security benefits. For 2017, your premiums can rise by no more than 0.3 percent of your Social Security benefits. That’s because the 2017 cost of living adjustment, or COLA, was 0.3 percent, and Social Security’s “hold harmless” rule limits your higher Part B premiums to this amount.
I’m guessing you have higher Social Security benefits than your husband, so your Part B premium this year will also be higher than his. Try multiplying your 2016 Social Security benefit by 0.3 percent and see if the results equal the amounts of your respective Part B increases this year.
Dan: I am have been a Kaiser customer for many years through my workplace insurance plan. I am getting ready to retire and am considering a Kaiser Medicare Advantage plan. However, it appears that while I am in the Kaiser service area for my workplace plan, I am not in the Medicare Advantage plan’s service area.
I’ve asked Kaiser who defines what the service area is for their plan, but have received no response. Who makes these service area determinations, and what are the criteria? Are there steps I might take to have the service area expanded to include me?
Phil Moeller: I am especially fond of questions that let me dive into the Medicare weeds, and yours really qualifies! The short answer is that the private insurance plans propose service areas, and they must be approved by the Centers for Medicare & Medicaid Services.
There are different types of service areas for Medicare Advantage plans. Plans with broad service areas are organized into 26 regions across the country. Their service areas encompass one or more entire states. For example, California is in service area 24.
Local service areas usually comprise one or more counties. However, the Centers for Medicare & Medicaid Services also may approve what it calls “partial county” service areas. In doing so, the agency is supposed to make sure such a designation is “necessary, nondiscriminatory, and in the best interests of the beneficiaries.” It’s also supposed to pay attention to how such a service area compares with the service areas of other plans.
Because of the flexibility that plans have in creating local service areas, it is possible that the Medicare Advantage plans available where you live will not all have identical geographic service areas. This can be significant in terms of creating a plan’s provider network of doctors, hospitals and other healthcare providers. And, especially with Medicare Advantage health maintenance organizations, providers not in a plan’s service area may not be covered by the plan or, if allowed, might cost you a lot more to use than providers in the plan’s network.
Because Kaiser may have proposed the service area for your plan, it theoretically could change it as well. I do not know how often this occurs. I asked them, and they did not offer an explanation. A representative did, however, ask that you get in touch with them and said they’d see if they could fashion a helpful solution. If you wish to take this route, let me know. If you decide to do this, please let me know how things work out.
Pat – Fla.: When I turn 65, do I have to take Medicare? I am a member of a bill sharing ministry that is covered by something called exemption 8965. Do I have to participate in Medicare, and if there are penalties for not signing up, what would they be?
Phil Moeller: Bill sharing ministries are programs where members join a ministry, abide by its religious principles and agree to help pay the medical bills of other ministry members. While the ministries function a lot like health insurers, they technically are not insurers and are exempt from some rules, including the need for members to have Obamacare policies. Membership increased in these groups after Obamacare was enacted, and more than half a million people are members of various organizations.
I shared your question with experts at the Medicare Rights Center. They looked at two prominent ministries — Christian Healthcare Ministries and Christian Care Ministry. These ministries require people to have Parts A and B of Medicare, after which the ministry will help plug gaps in Medicare payments, much like a Medigap policy.
The Medicare Rights Center was not able to confirm that all ministries work this way, but it would be wise for you to consider that your ministry has such a requirement. You should check with the ministry to make sure. Your review should include whether there is coverage for prescription drugs. These are not covered by Parts A or B, but normally require a Part D drug plan from a private insurer.
If Medicare is required and you do not sign up, you would face Part B late-enrollment premium penalties of 10 percent a year. More seriously, however, your ministry’s rules might not permit it to pay for medical expenses covered by Part B, in which case you would be exposed to big medical bills.
Laura – Wis.: My son has recently become engaged to his same-sex partner. Unfortunately, his fiancé has kidney failure and is on dialysis. He receives both disability and Medicare benefits because of his condition. Will his benefits be affected after their marriage?
Phil Moeller: He receives his disability and Medicare records in his own name and based on his own Social Security earnings record. So they would not be adversely affected by getting married.
If he receives any benefits from other sources that are tied to his income, however, he should explore whether they might be affected should he file a joint tax return that includes his new spouse’s income. If so, he should get some tax advice on whether he should file an individual return following his marriage.
Erin: If someone lives abroad and has a health plan in that country, what happens if they do not sign up for Medicare when they turn 65?
Phil Moeller: Basic Medicare, of course, does not cover people outside of the U.S. Even so, the Medicare enrollment clock will begin ticking for this person even before she turns 65, regardless of where she is living.
If she does not have credible health insurance from an active employer plan, she must sign up for Medicare during a seven-month enrollment period. This period begins three months before her birthday, includes her birthday month and extends three months after her birthday month.
If she does not, she will be charged late-enrollment penalties for Parts B and D of Medicare when she finally does enroll.
Now, if this person plans to live outside the U.S. for a long time — say five years — she should calculate her cumulative savings on Medicare premiums and balance them against the cumulative costs of lifetime late-enrollment penalties. Perhaps her best strategy will emerge from this exercise.
By the way, it’s possible to enroll in Medicare at most U.S. embassy and consular offices. She can contact the nearest one and find out details.
Jean – Ala.: I am still working and covered by my employer health plan. I have signed up for Part A of Medicare and am considering retiring in July of 2017 when I will be 66. If I sign up for Part B and later change my mind and continue to work, can I withdraw from Part B? Do I need to sign up for part B in the first three months of the year or can I sign up in July when I would actually need it?
Phil Moeller: You can disenroll from Part B and avoid any late enrollment penalties, so long as you continue to be covered by a group employer health plan, your employer has more than 20 employees, and the plan’s drug coverage is considered credible — at least as good as a Medicare Part D plan. Your employer is required to provide certification to this effect.
When you enroll in Medicare — either next year or for a second time — you will have an eight-month special enrollment period. You should make sure not to wait too long during this period to sign up. There can be a lag until your coverage is effective, and you certainly don’t want to be without health insurance.
Richard – Pa.: I am confused about something in your Social Security book. In what you refer to as “Gotcha #2” in Chapter 16, you write, “Once you file for your retirement benefit, you can never take an auxiliary benefit by itself.” I have reached full retirement age (66) and my wife just turned 65. I have not filed for any benefits. According to another book I have read and an online calculator that I have used, my wife could file for her earned benefits at age 65, and I could file for spousal benefits with a restricted application to exclude my earned benefits at the same time. In November of 2020, at age 70, I could file for my earned benefits, and in November 2020, my wife, then 68, could file for spousal benefits. This seems to contradict Gotcha #2 in that my wife would be taking her retirement benefit and then later be taking her spousal benefit. I would enormously appreciate a clarification.
Phil Moeller: Everything about Social Security is complicated, but this gotcha is accurate.
Once your wife has filed for her own retirement benefit, she can never receive her spousal benefit all by itself. She may not plan to, but the point of this gotcha is that she can’t.
You are, of course, planning to receive a spousal benefit all by itself. But you are not filing for your retirement benefit but filing a restricted application for just a spousal benefit. So your restricted application doesn’t involve this gotcha, because you won’t be filing for your retirement benefit.
When you file for your own retirement benefit, you will receive an additional payment roughly equal to the amount by which your retirement benefit exceeds your spousal benefit. Social Security may call this entire amount your retirement benefit, but we think that’s misleading. It’s actually an excess retirement benefit and certainly not a retirement benefit all by itself.
When your wife later files for a spousal benefit, she would receive nothing unless this benefit was larger than her own retirement benefit. In that case, she would receive what’s called an excess spousal benefit, and it would be roughly equal to the amount by which her spousal benefit exceeds her retirement benefit.
As we see it, none of these claiming situations violates this gotcha.