My employer health insurance is unaffordable. Should I get Medicare?

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.

Maria – Florida: I will be 70 in December, at which time I would like to retire. I am now covered by my employer’s health insurance, but it has a $1,500 deductible in network. I needed some physical therapy, but I first had to cover my deductible, and I couldn’t afford it. My sister has suggested that I drop my employer’s insurance and enroll in Medicare. A Medicare Advantage plan that my husband has is very good. Employer insurance is really getting very expensive!

Phil Moeller: While you do not have to get Medicare, because you’re covered by an employer plan, you always are free to drop your employer plan and get Medicare instead.

In an ideal world, your employer would pay at least some of your Medicare premium, because leaving the employer plan would save money. In practice, this seldom happens. But, hey, I’d go ahead and ask your employee benefits office about it. From what you say, you might save money even if your employer provides no assistance for the move.

If you do leave the employer plan, be aware that you might not be able to rejoin it later if you changed your mind. This is also something you should check out ahead of time.

READ MORE: Should you stay on your employer health insurance or get Medicare?

Also, I wonder why your husband has Medicare and is not covered on your health plan? If he’s eligible, you could save his Medicare premiums, and perhaps afford to pay your insurance plan’s deductible.

Richard – New York: I am moving my aging mother from New York state to Naples, Florida, so she can spend her last years in a warm climate. She was a school teacher for more than 38 years and she gets full health care coverage from a third party administrator for a low monthly premium. When I called her group plan administrator, I was informed that since my mother is leaving the state, her monthly cost would be seven times more than what she’s paying now. She can’t afford this. She is 79 and has Medicare Parts A and B coverage. Do I need to find a health maintenance organization to supplement her Medicare coverage in Florida, or is this not necessary? She’s very healthy and takes no medications.

Phil Moeller: Finding a low-cost HMO plan in Florida is the prudent way to go. In effect, you would be buying a catastrophic health plan that can cap out-of-pocket expenses should your mom have a medical emergency. And despite her current good health, a medical emergency is exactly what you need to plan for in her case.

Rather than buying a plan to complement her retiree package, you might consider helping her determine whether it would be better to junk that soon-to-be-costly coverage altogether. With the dollars she’d save, for example, she might be able to afford basic Medicare, a Part D drug plan and a Medigap supplemental insurance plan. I don’t know if her retiree plan also provides dental, vision or hearing coverage — things basic Medicare does not cover.

Focusing on a Medicare Advantage plan would be my first choice. Some of these plans do cover dental, vision and hearing needs. They provide out-of-pocket spending caps as well. Plus, Florida has plenty of low-cost Medicare Advantage plans. You can use the Medicare Plan Finder tool to find the best deals in the Florida ZIP code where she intends to live. Keep in mind that usually these plans would cover her only in the plan’s local coverage area and may not be of much help when she is outside the state.

READ MORE: Don’t make this Medicare mistake: COBRA is not like employer health insurance

Also, you should carefully review the plan’s directory of health care providers to make sure your mom can receive care from providers both of you like. HMOs usually deny coverage from non-network providers or charge you higher out-of-network rates. This is homework you need to do before getting a plan.

If she is going to travel a lot outside Florida, you should consider getting a Medigap plan to plug the coverage gaps in basic Medicare. Medigap plans, like basic Medicare, may be used at any provider in the U.S. who accepts Medicare and is seeing new patients. These policies will, however, cost you more than an HMO.

If her health worsens, you could help her switch into more comprehensive Medicare plans during the program’s annual open enrollment season, which runs from Oct. 15 through Dec. 7 every year. Be aware that finding a Medigap plan at her age might be expensive.

Jane – Oregon: I’m planning to move abroad because of the unaffordability of living costs in the U.S. Right now, my Medicare Part B premium is paid for by a low-income program. I also pay the full cost for a letter F Medigap policy. If I maintain a state mailing address, can I still receive the Part B premium benefit? Otherwise, that and Medigap would eat up a third of my Social Security benefit, which is my only source of income.

Phil Moeller: You do not need a U.S. mailing address to maintain Part B or, as far as I know, a low-income support benefit. These are federal programs, not state-related. The premiums will continue to be deducted from your Social Security payments, and you can be covered by Part B anywhere in the U.S. if you decide to return here for medical care.

However, if you are receiving a Medicaid benefit and thus are dually eligible for Medicare and Medicaid, you would need to check with your state’s Medicaid office about this. I wouldn’t want you to unintentionally lose a state Medicaid benefit.

READ MORE: Beware this Medicare gotcha when you file for Social Security

As for Part F, it strikes me you should do some “what if” analyses and decide if you should continue paying for this supplemental coverage or self-insure against gaps in Part B coverage. You also might want to check up on the availability of health insurance in the nation where you wish to relocate.

Scott – California: I recently got a letter saying that the state of California will no longer pay my Medicare Part B medical insurance premium. Is this a blanket statement for all Medicare beneficiaries in the state of California? I believe it was paid through Medi-Cal.

Phil Moeller: Experts at the State Health Insurance Assistance Program (SHIP) say that they think you have been in a Medicare Savings Program that is managed in California by Medi-Cal. Eligibility for these programs can be affected by changes in a person’s personal income and asset totals, as this is a means-tested program. There also is a periodic recertification process that can trip up people. The California arm of SHIP is called HICAP and can be reached at 800-434-0222. Someone there should be able to help you. There is no cost for this counseling.

Susan – Nova Scotia: I live in Nova Scotia and received a Medicare card at my address here when I turned 65. I travel to New York state and California every year to visit family.  If I required medical attention while I’m in the United States, would I qualify for anything from Medicare? I am a U.S. citizen but have lived in Nova Scotia for 17 years. I don’t take out extra medical insurance when I’m visiting the United States, as I assumed I would receive some coverage if anything did happen.

Phil Moeller: That Medicare card was most likely providing you Part A of Medicare, which covers hospital expenses. It charges no premiums if you have worked enough years in the U.S. at jobs where you paid Social Security payroll taxes.

If that card included Part B, you would have had to sign up for it, and you would be paying monthly premiums or having them deducted from your Social Security payments. Your note doesn’t say whether you’ve applied for Social Security, but I assume you qualify.

Part B covers doctors, medical equipment and other outpatient expenses. If you don’t have Part B, you would be exposed to big uncovered medical bills in the U.S. And even Part A has a hefty $1,316 deductible before your coverage begins paying.

Pete – Indiana: If I am on Social Security Disability Income, can I use the remaining balance in my health savings account?

Phil Moeller: Yes. Acceptance of Social Security benefits invalidates continued tax-exempt contributions to an HSA. But you are still free to use any existing balances in your HSA to pay for eligible health care expenses.

Julie: My husband and I are separated, and we’re both on disability. We’ve been separated for almost a year now, and my husband has been living off of his parents and borrowing money from credit cards. The divorce is finally going to go through. Are there any back-pay awards from Social Security for the year that we have been separated?

Phil Moeller: I’m sorry, but Social Security does not pay divorce benefits unless there is a legally binding divorce in place. Being separated is not a basis for paying benefits. Your note doesn’t say whether one or both of you have qualified for Social Security Disability Income payments. If you are, you both should be receiving payments each month. If so, getting a divorce would not boost your Social Security unless one of you earned a great deal less than the other. If this is the case and the lower-earning person qualifies for ex-spousal benefits, they could file once the divorce is final, and they should receive an added payment.

John – Massachusetts: I will turn 66 next month. My wife is four years older and collects Social Security. Can I, and should I, file for spousal benefits next month and defer my own benefits until age 70? When I do file for retirement, can my wife then file for a spousal benefit? Also, must I keep working and earning my current income to reap the higher benefit in four years?

Phil Moeller: Because you had turned 62 before the beginning of last year, you are grandfathered under the 2016 changes to Social Security laws. Because your wife has already filed for her retirement benefit, once you reach your full retirement age, you can file what’s called a restricted application for just your spousal benefit while deferring your own retirement benefit up to age 70, during which time it will receive delayed retirement credits that will increase your retirement benefit by 8 percent a year.

READ MORE: Column: Why is my Medicare Part B premium more than my husband’s?

Once you have filed for your own retirement benefit at age 70, your wife can file for a spousal benefit based on your earnings record. If this benefit is larger than the retirement benefit she is receiving, she would receive what’s called an excess spousal benefit that equals the amount by which her spousal benefit exceeds her retirement benefit.

You do not need to keep working after age 66 to receive delayed retirement credits.

Michael – Kansas: I am turning 65 in six months. I have health coverage from my employer, but we have less than 20 employees. Do I have to sign up for Medicare even though I am not going to draw Social Security until I am 66 or 70?

Phil Moeller: Whether you need to sign up for Medicare has nothing to do with Social Security. Under the Medicare rules, people with health insurance through what are called small-employer plans must sign up for Medicare at 65. At that age, their employer coverage automatically becomes their secondary insurance plan, and Medicare becomes the primary payer of covered insurance claims. Failure to get Medicare can thus expose someone to huge medical bills.

The threshold for a small employer plan is, as you indicated, 20 employees. Some companies with fewer than 20 employees can, however, skirt this rule by becoming part of a multi-employer health insurance plan. You should check with your employer to see if this is the case. If not, you will need Medicare.

D – Illinois: I have Medicare and am planning to get married to a same-sex partner. Would my partner be covered with my Medicare after we marry?

Phil Moeller: No, they wouldn’t. Medicare covers only the individual, not their spouse or family members. If your partner is 65, they would need to get their own Medicare coverage. If they are younger than 65, they would need commercial health insurance from a state Obamacare insurance exchange, a private insurance plan or, if they’re employed, their employer’s group insurance plan.

People approved as disabled by Social Security qualify for Medicare at any age, but enrollment in Medicare takes upwards of two and half years after Social Security Disability Insurance payments begin.

Barbara: I am 58. My husband died two years ago. I am told I can start collecting survivor benefits at age 60. Once I start collecting benefits at age 60, will those benefits be effective if I remarry after that?

Phil Moeller: You will not lose these survivor benefits should you remarry. While you can begin survivor benefits as early as age 60, they will be 30 percent less each month than if you wait until 66 to file. Of course, you would also forego these benefits entirely for six years, so if your own retirement benefits are going to larger when you file for them in the future, it might well be better to begin taking the survivor benefit as soon as possible.

Robert – Texas: I will start Medicare at 65 this July and understand that being on Medicare will mean that I will no longer be eligible to contribute to a health savings account. My wife won’t turn 65 for another 18 months. Our existing health insurance premiums have doubled to the point of being unaffordable. So we have decided to buy a very low-premium plan. My strategy is to put our premium savings into an HSA and then pay medical bills from this account. Can you point me to non-employer based HSA sources or references?

Phil Moeller: Unfortunately, HSAs are only available through an employer health plan. They don’t exist as stand-alone private accounts. Sorry!

UPDATE: A reader wrote in with this clarification:

This is not quite true. While one cannot set up an HSA by itself, if you have an individual health insurance policy which is HSA compliant, it is possible to set up an HSA on your own. I have an ACA (Affordable Care Act) policy that is HSA compliant, and I was able to set up an HSA through my credit union.