Editor’s Note: Journalist Philip Moeller, who writes widely on health and retirement, is here to provide the Medicare answers you need in “Ask Phil, the Medicare Maven.” Send your questions to Phil.
Medicare rules and private insurance plans can affect people differently depending on where they live. To make sure the answers here are as accurate as possible, Phil is working with the State Health Insurance Assistance Program (SHIP) and the Medicare Rights Center (MRC).
Joel – Fla.: I am presently on an HMO (health maintenance organization) special needs Medicare Advantage product for diabetes. Will I be able to switch with guaranteed issue to another product such as a PPO Advantage plan (preferred provider organization), or can I not? I am 70 years old. I was on a PPO Advantage plan earlier, but I was told that I needed this special needs product. I do not like this plan and want to go back to a PPO with in- and out-of-network benefits as well as part D drug coverage.
GOT MEDICARE QUESTIONS?
Phil Moeller: During Medicare’s Open Enrollment period, which begins Oct. 15 and runs through Dec. 7, you can select a new Medicare Advantage plan to take effect in 2016 without encountering any adverse underwriting restrictions. Medicare does not allow insurers to ding you for prior conditions. Medigap policies, which are regulated by individual states, do permit insurers to impose underwriting restrictions outside certain Medicare enrollment periods that provide people with “guaranteed issue” rights to Medigap policies.
I do not know if there is a Medicare Special Needs Plan available through a PPO where you live. If not, you are free to sign up for another PPO plan (and, in fact, any other Medicare plan as well). Check out Medicare Advantage plans available where you live by going to Medicare’s Plan Finder tool and entering your ZIP. I entered one of the ZIP codes in the town you live in and found that half a dozen PPOs are being offered. If you find a plan you like, make sure you’re seeing its 2016 offering and not 2015 details. Next year’s coverage and pricing details will be posted by the time Open Enrollment begins. To make sure the plan will offer what you want, I’d call the number for it listed in Plan Finder and speak with a plan representative.
Barbara – Calif.: Does Medicare cover hospice?
Phil Moeller: Yes. Medicare’s primary hospice publication has helpful details and lists of local organizations that can help you. The basic requirements are that the patient must have Part A Medicare hospital insurance and that his or her doctor or other prescribing physician says the person has no more than six months to live. Under current hospice rules, patients who enter hospice must agree to cease efforts to cure their underlying medical conditions. One of the great regrets of many patients and their families is that they must “give up” medical treatment to enter hospice. However, in a major new pilot program, Medicare will begin offering a program next year in some parts of the country that lets people use hospice and still receive curative medical care.
Paul – Nev.: I am 72 and have been covered by my wife’s employer group policy. I have Part A of Medicare, but I have not signed up for Part B yet. Will I be penalized for not signing up for B when I turned 65? What are the implications of not having Part B altogether and instead having a high-deductible major medical policy? Am I “forced” to take part B?
Phil Moeller: In most cases, people do not need to sign up for Part B when they turn 65 so long as they have employer group coverage (either directly or through a spouse’s plan). The two key variables here are:
- The employer must have at least 20 employees or the person usually must get Medicare. Small-employee plans generally require Medicare to become the primary payer and the employer plan secondary for participants 65 or older.
- The employer plan’s prescription coverage must be at least as good as that provider by a typical Medicare Part D drug plan. Employers are required to certify their plans each year as “creditable” in this regard.
If your wife retires or leaves her employer and you no longer are covered by her plan, you have an eight-month window to sign up for Medicare. If you don’t get Part B and Part D plans at the end of their initial sign-up windows, you will face penalties that take the form of higher plan premiums, often for the rest of your life. Are you “forced” to take Part B? I suppose you could put it that way, but Medicare is a tremendous bargain for most people compared with what they could get in the private market, assuming they could find coverage at all. This fact, after all, is what drove Congress to enact Medicare 50 years ago in 1965.
Ted – Mass.: Should I file early this year for Social Security, so I won’t have to pay the large Medicare Part B increase for 2016? I was going to wait until 70, but I read somewhere that I can file now (I am going to be 65 in December), wait a couple of months, and then suspend. That would allow me to avoid the large increase in Part B premiums and also put me back on the path to higher Social Security benefits, due to getting the 8 percent delayed credits. What do you think of this? Does it make sense?
Phil Moeller: Social Security has indeed confirmed to me that this will be an option for people. However, the right to file and suspend does not begin until a person has reached what Social Security defines as full retirement age. For you, this is 66. You definitely do not want to file before then, or you would have to receive your retirement benefits for a full year before you can suspend them. Your lifetime Social Security benefit would be reduced, and you almost certainly would lose a lot more money over time than you would gain by avoiding higher Part B premiums that might only be higher for a single year.
Katie: I am 66, still working and plan to continue working for as long as possible. I did not sign up for Medicare and now wonder if I should or made a mistake by not doing so. What would be the benefit? Is there a penalty for not doing so? I would want to do it before I retire so I have coverage — is this correct?
Phil Moeller: You are not required to have Medicare when you turn 65 so long as you continue to have employer group coverage where you work. When you retire or leave the company and no longer have this coverage, you will have an eight-month window to sign up for whatever Medicare insurance policies you decide you need. If you miss this window, you would face late enrollment penalties for Parts B and D of Medicare, and they would get larger for each year you delay. These are lifetime penalties in most cases, so I’d urge you to sign up in a timely manner when required.
One final thought: People who qualify for Social Security benefits also get Part A (hospital) coverage for free. Having Part A can come in handy even for people who have employer coverage and thus do not need to sign up for Part B or other Medicare insurance. Part A can often pay for hospital expenses left over after your employer policy has paid its obligations.