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 “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; and he will answer as many as he can.
Charles – Md.: Congress saw fit to increase monthly Medicare premiums in 2018. While my retirement income did not change, my monthly premium is now $349. I also am enrolled in another health insurance plan through my former employer that I have kept in retirement and costs $149 per month. If I terminate Medicare Part B, my yearly out of pocket costs would be $7,000 with my employer insurance plans. I think that Medicare is too expensive.
Phil Moeller: Congress increased Medicare premiums only for very high-income retirees. The normal annual increases in Medicare premiums were not approved by Congress but determined by Medicare itself, based on rates of health care inflation.
I’m all for calling out the government when it errs, but the issue here is not so much higher Medicare premiums as failing to take steps to help restrain the prices that we all pay for drugs, hospitals, medical equipment, and doctors.
If Medicare doesn’t work for you, there’s no law that says you must have it. What the law does say is that if you later wanted Medicare, you’d pay lifetime late enrollment penalties. These can be stiff, but they do make sense. If there were no such penalties, healthy people simply would not get Medicare until they got sick. That might work for them, but for those who were ill, premiums would soar, as we’ve seen with the escalating trend in Affordable Care Act premiums.
Most retiree health plans do not provide primary health coverage but require a person to have Medicare when the retiree turns 65. At that time, Medicare becomes the primary insurer and the retiree plan becomes the secondary insurer. Of course, I do not know what type of retiree plan you have but would suggest you make sure it will provide primary insurance coverage should you drop Medicare.
Lastly, if you are paying $349 for Medicare, either your income is high enough to trigger Medicare surcharges, or you have a private Medigap plan. If it’s the latter, you might look into dropping that plan, especially if your retiree plan provides secondary coverage.
Susan – Vt.: Because Medicare is for the seniors, it should cover the things we need. As we get older, this includes hearing and dental needs. But the very thing Medicare should be helping us with is excluded from its coverage. Medicare should be for seniors but it is failing us. WHY? Every month I am the one who pays the Medicare payments, not the government.
Phil Moeller: Medicare’s failure to cover basic dental, hearing, and vision needs is a huge problem. Of course, even employer plans that do cover these things are generally lousy. Still, I think Medicare should cover these things. Doing so, however, would raise your Medicare premiums, and I’m betting you already think they are too high.
Most people don’t know this, but the Social Security payroll taxes that workers pay only cover Part A of Medicare, which is for hospital insurance. The premiums most people pay for Part B (doctors, outpatient services, and medical equipment) cover only 25 percent of the expenses that Medicare pays. General government revenues pay the rest, to the tune of nearly $400 billion a year, and rising.
So, like just about every other problem we have today, the question is who should pay to fix it?
By the way, some private Medicaid Advantage plans do provide limited coverage of hearing and dental needs. During this fall’s Medicare open enrollment period, which begins Oct. 15, you can review MA plans in your area and see if one is right for you.
Stuart: My question is about what happens if I chose a Medicare Advantage plan originally at age 65. Say that I keep it until 72, and then I move back to original Medicare. If I decide I want a Medigap plan, will my premiums be based on an issue age of 72 or 65?
Phil Moeller: If you are older when you finally get a Medigap plan, chances are you will be paying a higher premium. This is due not only to your age but also because you no longer will have what are called guaranteed issue rights.
These rights are in force for six months during a person’s initial Medigap enrollment period when they first become eligible for Medicare. They require Medigap insurers to sell you policies without charging you more due to any pre-existing health issues.
Once these rights expire, insurers can charge you more or even decline to insure you at all. Your experience depends on where you live, because Medigap is regulated at the state level and states have differing levels of consumer protection for Medigap policyholders.
Anonymous — Ariz.: I will turn 65 in September. We recently moved from Pennsylvania to Arizona. I have a medical condition for which I would like to keep seeing my doctor in Pennsylvania. Can you please suggest which Medicare option would best suit my preference to travel out of state for certain treatment?
Phil Moeller: Original Medicare, which consists of Parts A and B, will insure you for care from any doctor in the U.S. who accepts Medicare. You would also need a Part D prescription drug plan and also perhaps a Medigap supplement plan to pay for things that original Medicare does not fully pay for.
The other Medicare pathway would be a Medicare Advantage (MA) plan. Some MA plans do permit coverage outside your home market area. They are usually known as PPO or preferred provider organization plans. You would need to check with plans to see how they would cover you. I mention MA because these plans may be cheaper than original Medicare with a Medigap plan.
Maggie – Va.: I am a surviving spouse, aged 68, and have been collecting a widow’s benefit for the past two years. Until a year or so ago, I received benefits statements from Social Security projecting an 8 percent increase in my own future Social Security benefits, which I have always planned to claim when I turn 70. However, when I most recently checked with the Social Security office in Culpeper, I was told this was not the case. How shall I best proceed with ensuring that I receive my full benefits at age 70?
Phil Moeller: I have no idea why Social Security told you this. Did the representative provide any explanation?
The “worst case” situation here is that Social Security believes you filed for BOTH your widow and retirement benefits when your filed for the widow benefits. I can tell from your note that this was not your intent, so if this is the reason you are given for why your own retirement benefits won’t increase the way you expect, you need to contest this finding.
Have you set up an online My Social Security account? This will show you Social Security’s official projection of all the benefits to which you are entitled at different claiming ages. You should be able to see how the current projection of your age-70 retirement benefit compares with the earlier printed statements you have received.
If there is a worrisome discrepancy, I’d contact Social Security immediately to clear things up. If not, you could print out the My Social Security projections and then bring them to the Culpepper office and see if they are enough to convince people there to correct what you have been told.
Maggie responds:I have worried about this every day since I was told the distressing news that my Social Security benefits would not grow and be about $200 less per month than I had anticipated. When you are told one thing years ago, and you bank on that information, it’s a shock to find out it is other than what was said.
The Social Security representative I met was quite firm with me that the laws had changed and that the benefits no longer grew at 8 percent. I realize that my late husband’s claim has been used quite a bit. His divorced wife has claimed disability benefits on it for some time, and when my son was younger, I received widow’s and surviving parent benefits on the same claim. And now I am claiming on the benefit, and plan to do so until I am 70. Should that have something to do with the information the rep told me?
Are there instances when Social Security representatives mislead claimants?
Phil Moeller: I think the representative is just wrong. In late 2015, Congress did enact major changes to Social Security laws. But those changes did not affect your rights and did not change the rules on delayed retirement credits.
Also, the history of prior claims on your late husband’s earnings record has no bearing on your entitlements now.
Unfortunately, there are well-documented instances where Social Security does mislead people. I have not seen solid information on the underlying causes of such behavior but think it’s more about employees not understanding the agency’s own complicated rules than through any desire to reduce what the agency must spend in benefits. Stick to your guns!