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How to handle a surprise medical bill when there’s a Medicare mixup

Journalist Philip Moeller answers your questions about health, aging, and retirement. Phil is the author of the 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.

Rick – California: My wife is seven years older than me and of Medicare age. I was told that she didn’t need to sign up for Medicare until I retire. When I lost my coverage at the end of 2017, I was advised to sign up for COBRA to provide seamless coverage. Then they said we were required to sign my wife up with Medicare, too. We then found out she hadn’t worked enough hours to qualify for Part A. With COBRA, I was under the impression we were covered for everything!

In 2018 she was diagnosed with lung cancer and we went through all the tests and referrals up until she was admitted to the hospital for lung surgery. Never once throughout this ordeal has anyone even HINTED at the possibility we weren’t covered for hospitalization! How could they even admit her without mentioning this fact! Now they are billing us $43,000! I have been paying $1,400 per month for COBRA and also the Medicare B premium for the last 15 months.

Through all our stress and grief over this situation, apparently I didn’t read the fine print! I feel like we are being taken advantage of. Any advice for me?

Phil Moeller: I am so sorry to hear about your wife’s health problems and your nightmare with Medicare rules.

If she did not work enough hours to qualify for Social Security benefits, she still would have been permitted to qualify for premium-free Part A based on your earnings record, assuming you have worked enough hours to qualify for Social Security benefits and that you are at least 62 years old. Your note does not indicate your age, so I’m guessing you’ve not yet turned 62. If that’s the case, and as you may have discovered, she could still get Part A but it will cost her more than $400 a month. I’m assuming she got Part B but not Part A, and this is the cause of that $43,000 hospital bill.

Many people mistakenly assume that not qualifying for premium-free Part A means they can’t get Part A at all. I’m sorry this happened to you.

The hospital certainly should have asked her upon admission what type of insurance she had. If she said COBRA, it’s possible no one would have asked whether her COBRA provided primary coverage or, because she was of Medicare age, it would only provide secondary coverage. That’s the sad truth about COBRA, but lots of people get tripped up by the rules.

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, the 1980s law that requires employers to offer continued health insurance to former employers who no longer have workplace coverage. In most cases, the former employee must pay COBRA premiums, but in some cases employers help with these payments.

I wish I could say that her caregivers had a legal obligation to tell her about Medicare rules, but I don’t believe they did.

So, I cannot see that you were taken advantage of. I do think you (and many, many other Americans) are victimized by the complicated Medicare rules that apply to you whether you know about them or not. I would ask your hospital for hardship assistance. If you need help advocating for a lower bill, get in touch with the National Patient Advocate Foundation, which has caseworkers to help with this kind of problem,

I hope the surgery at least has helped your wife and wish both of you the best.

Navigating Medicare Part B

Treena – New York: I am fighting Social Security over its deduction of Part B premiums from my Social Security payments. I have never signed up for Part B. I called Social Security and explained, and they sent me a form to refuse Part B. I filled it in and sent it back, and still they are taking it out. Plus, I have never even received a Medicare card! Why are they so hard to deal with? I just turned 65 and have health insurance through my husband’s workplace.

Phil Moeller: I’m so sorry you’ve gotten a “full dose” of Social Security service problems. When people receiving Social Security turn 65, the agency sometimes enrolls them in Medicare and, I’m told, believe it is doing people a favor by doing so!

Of course, I don’t know exactly why you’ve gotten such bad treatment, but I do know that the agency is understaffed and that many of its most experienced representatives have reached retirement age. If they’re being replaced, it’s usually with people with less experience and training.

You just need to keep after them. Please let me know how things go.

Bob – Minnesota: My wife is receiving Social Security Disability Income (SSDI) benefits and has Medicare Part A. I am 60 and she is 59. I am planning to retire from my job soon. Until now, she has not filed for Medicare Part B because I have carried her on my work health insurance plan. With my upcoming retirement, we decided it would be best for her to apply for Medicare Part B and I would then find a health insurance policy for myself only. So, she applied during her special enrollment period (SEP) and has received notice that her application has been accepted. Her Part B coverage will begin soon.

Since then, I have continued doing more research and determined that it may be possible to obtain health insurance coverage at considerable cost savings for us as a family through Minnesota’s Affordable Care Act state insurance exchange. Is it too late for her to drop the Medicare Part B plan for now since it has not yet taken effect?

Phil Moeller: Normally, a person can withdraw from Part B at any time. They may face late enrollment penalties when they re-enroll, unless they have had employer health coverage.

Your wife’s situation is different. Although she has not yet turned 65, she already is eligible for Medicare by virtue of her disability. Under the ACA rules, people who are eligible for Medicare will not receive tax subsidies if they purchase insurance on a state exchange. These subsidies normally are what make these policies affordable, so this may change your thinking about the most attractive health insurance option.

If she did withdraw from Part B, she could face late-enrollment penalties if she re-enrolls in Part B before she turns 65. As a disabled person, she will receive a new “clean slate” initial enrollment period for Medicare when she turns 65, and those penalties should disappear.

Gotta love these “clear” rules!

James – Kentucky: They started taking out $136 of my Social Security check. How can I stop this?

Phil Moeller: This is the amount of the monthly Part B premium paid by people on Medicare. If you are not on Medicare, call the agency, ask for the withdrawals to be stopped, and also ask that past withdrawals be restored.

Occasionally, Social Security mistakenly enrolls people in Part B, so make sure this hasn’t happened to you.

Social Security family benefits

Rob: I am retired, 63 years old, and elected to start receiving Social Security at 62 because I have a 16-year-old child, and can claim a child benefit for her. My question is, if I were to work for money again, I know that my Social Security benefit would be reduced. But would my child’s benefit also stop or be reduced as well?

Phil Moeller: Yes, it would. Here is what an agency spokesperson says about this issue:

“Social Security withholds the excess earnings of the worker from the total family benefit. Therefore, suspensions or deductions apply to both the worker and the child until the excess is charged or, if the excess amount is greater than the total family benefit for the year, the entire year. The total family benefit includes all monthly benefits payable to the worker and the child on the worker’s record.”

Normally, reductions from more than one benefit on a worker’s record are taken proportionately. You should call the agency to determine the specific impacts in your situation. You can find out the terms of Social Security’s earnings test here.