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How to avoid Medicare enrollment panic

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.

I will get to as many questions as I can here, but please accept my apologies that I am not able to answer everyone’s questions.

Patricia – Va.: I have to file for Medicare before the end of this month. The urgency is because my husband’s health and benefit enrollment period’s deadline is May 27. If I don’t file on time, there will be a penalty. I will be 65 in August 2016, and he is seven years younger.  I haven’t worked since 2009 and am completely overwhelmed with what to do regarding Social Security and Medicare.  I have been to the Social Security office in Manassas, Virginia twice and did not sign up because the information I received was different each time. And I’ve received different information each time I’ve called. I was advised by my certified public accountant to have 20 percent of my taxes withheld from my yet-to-be-completed Social Security check, but trying to do this online proved to be futile. Do I have to pay someone to explain this? I don’t know where to get sound advice. Please help me!

Phil Moeller: Patricia, first off, take a deep breath! You need not panic, as far as I can tell.

As long as your husband continues to get health insurance at work, you may not need to get Medicare even though you are turning 65. If you are covered on his plan, you will continue to be covered unless he works for a very small employer, and there are fewer than 20 people covered by the plan. In that case, you would need to get Medicare.

If that’s the case, however, you have a seven-month enrollment period extending three months past your 65th birthday before you run into any late-enrollment penalties. Your primary concern here is not a penalty but failing to sign up soon enough. You ought to avoid any break in your health coverage. If you need to get Medicare, I’d get it ASAP. There are lots of choices here, and I know they can be confusing. I’ve written a lot of columns about different types of Medicare coverage. Scroll through the headlines on my PBS author page and look for ones that deal with open enrollment choices.

READ MORE: Everything you need to know about Medicare’s open enrollment

As for Social Security, you don’t need to do anything right now. You were eligible to take your own retirement benefits as early as age 62, and you do not need to take them at all until age 70, when they will reach their maximum amount. Benefits taken before full retirement age are hit with early claiming reductions. Benefits deferred after full retirement age enjoy delayed retirement credits. Because your husband is younger, it’s unlikely you will claim spousal benefits anytime soon, because he would have to file first for his own retirement benefit for you to be eligible to file for a spousal benefit based on his earnings record. This information is covered in depth in the newest edition of the Social Security book I co-authored with PBS’s own Paul Solman and Social Security expert Larry Kotlikoff.

Good luck!

Anna – Fla.: I was widowed seven years ago when my husband of 34 years died from throat cancer. He worked until he could no longer, from the age of 16 to the age of 57. He passed before his 58th birthday. I am now 60 and have been told I could receive Medicare health benefits. I am employed full time, working 40 hours a week, but my employer does not provide any benefits. I currently make less than $25,000 per year, am enrolled in the healthcare marketplace and pay about $250 per month for health insurance. Can you let me know if I am eligible?

Phil Moeller: Anna, I am sorry for your loss, and were it up to me, you would get free Medicare right away! Sadly, the rules don’t work that way. Unless you are disabled, you will not be eligible for Medicare until you turn 65. At that point, you will no longer be able to get coverage on a state insurance exchange and will need to get Medicare. While you are not eligible for Medicare now, you most probably are eligible for Social Security survivor benefits based on the earnings record of your late husband. These benefits begin as early as age 60, but will grow in value each year until you reach your full retirement age, (age 66 and 2 months for someone born in 1955, as you were) when they will reach their peak value.

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

You need to do some homework here before filing a claim. Under Social Security rules, you can file for survivor benefits and defer filing for your own retirement benefits until age 70, when they would reach their maximum amount. Thus, you need to compare the possible values of your survivor and retirement benefits and determine your best strategy.

For example, if your retirement benefit will eventually grow to exceed your survivor benefit, it usually makes sense to file for your survivor benefit as soon as you can and then file for your large retirement benefit when you turn 70. Even though your survivor benefit will be subject to early claiming reductions, you’ll come out ahead, because you’ll only be taking it until you turn 70. However, if your late husband earned a lot more than you, perhaps your survivor benefit will always be larger than your own retirement benefit. If this is the case, you can take your retirement benefit at age 62 (the earliest you can do so) and then claim your survivor benefit when it has reached it maximum value when you turn 66 and two months of age.

You should be able to find out the specifics of your own retirement and survivor’s benefits from Social Security (1-800-772-1213). You don’t want to file for a benefit on this call, but just gather the details you need. If you run into trouble here, let me know. Once you have these details, you can use Maximize My Social Security, a software product developed by Social Security expert Larry Kotlikoff, for free in its basic version. It will let you enter your claiming variables and show you the best strategy.

Best of luck!

Karen – Ohio:  My husband is 66 and is still working. He is covered under his employer’s health care insurance plan. He has stage five kidney failure and is on dialysis, which he started in December 2014. He is on the list to receive a kidney transplant. When he met with the social worker in charge of financial arrangements at the transplant center, she told him that he only has until July 2017 to remain on his employer’s health care coverage. She said there is a 30-month rule that applies to dialysis patients, and after he hits that 30-month mark, his employer’s insurance company will refuse to pay for his dialysis. He will be forced to go on Medicare as his primary insurance. His employer’s insurance would then become his secondary plan. Is this true? We want to be well-educated about all of our options.

Phil Moeller: End stage renal disease (ESRD) more likely qualified your husband for immediate Medicare enrollment. There is a 30-month “coordination period” during which your husband’s private health insurance is the primary payer for covered dialysis expenses. Medicare is the secondary payer of expenses during this period, so you should look into this right away to see if you have any covered expenses that his employer plan did not pay for but which Medicare can help take care of. Of course, when you sign up for Medicare, you may need to pay its premiums, and perhaps this is the reason you haven’t done so to date. At the end of this 30-month coordination period, you will need to have Medicare, because it will become the primary payer for his dialysis and transplant care. However, his private insurance does not need to go away. He can keep it, and it will become the secondary payer. It’s also possible that he would get only Medicare Part A and B coverage and keep his health insurance for drug coverage and other things. This coordination and the best way to proceed with both private insurance and Medicare can get complicated. I suggest you read this official guide: Medicare Coverage of Kidney Dialysis & Kidney Transplant Services. Also, talk to an Ohio Medicare counselor with the State Health Insurance Assistance Program to help you make the right decisions. Best of luck.

Kate – Calif.: My 66-year-old husband filed for and suspended his Social Security benefits in April. The application listed Medicare Part A with the retirement benefit he was applying for. He stated more than once he did not want Medicare, because he has insurance. We even took out your book and quoted from it. The rep said she could not change the application. He received his Medicare card the other day. Is he able to cancel Medicare Part A without interfering with the file and suspend?

READ MORE: Why health savings accounts and Medicare don’t mix

Phil Moeller: There is no way for someone age 65 or older to file for Social Security without getting Part A. This includes folks who have filed and suspended. The only way to avoid Part A is to withdraw his filing, which I’m guessing he does not want to do. The only casualty with getting Part A while on a private health plan is if he is participating in a high-deductible health plan with a health savings account. HSAs are not possible when someone has signed up for Medicare, and having Part A means he is on Medicare.

If he doesn’t have an HSA, I wouldn’t worry about it. Part A charges no premiums for people eligible for Social Security benefits. And it may come in handy as secondary insurance for a portion of covered hospital expenses that his employer insurance plan does not pay. While he has no choice but to get Part A, he does not have to get Part B or any other Medicare policies right now. If his Medicare card lists him as being signed up for Parts A and B, he should call Medicare (1-800-633-4227), tell them he doesn’t want Part B and find out how to return that card and get a new one that shows him as having only Part A.

Gene – Calif.: I was self-employed for many years. I am 67, and my wife is 70. She started collecting Social Security as soon as she could and enrolled in Medicare at age 66, the cost of which is deducted from her Social Security. I plan to continue to work and will not collect Social Security until some point in the future. I enrolled in Medicare at age 66, paying for it myself. However, I just took a job, and my employer provides health insurance. I am inclined to take the insurance and drop Medicare for both myself and my wife.

Phil Moeller: Both of you can drop your Medicare, and after you’ve retired, you can sign up for it again without facing any penalties. However, if your employer plan is particularly expensive, offers inferior coverage or both, you might want to keep your Medicare. I suggest you look at both approaches and select the option that has the best cost and coverage solution for you and your wife. Normally, this would be to move off of Medicare and onto your employer’s plan.

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

Kevin – N.J.: I am 61 and will be 62 in December. Due to a catastrophic injury that happened to me, I was approved for Social Security Disability. Does that also make me eligible for Medicare or Medicaid?

Phil Moeller: Yes, it should. But there normally is a 30-month lag time before your coverage becomes effective — a two-year waiting period, five months for processing time and a one-month lag before your coverage takes effect. Whether you qualify for Medicare and Medicaid will depend on your income. You should check with a New Jersey counselor at the State Health Insurance Assistance Program to find out about Medicaid eligibility standards where you live.

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