Should I keep regular health insurance if I’m enrolling in Medicare?

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.

Clary – N.C.: Is there any reason to continue paying high premiums for regular health insurance after one is enrolled in Medicare? I was on the phone with a health insurance representation who told me that many people choose to continue their regular health insurance after getting Medicare. But they could not give me even one specific reason. Also, I have seen advice that we do not need insurance to supplement Medicare. What do you think of that?

Phil Moeller: Other than generating a sales commission, I can think of no compelling reason why an insurance company representative would suggest you buy regular health insurance after signing up for Medicare. Because Medicare is the first, or primary, payer of health claims, your private insurance would at best be used to cover any coverage gaps in your Medicare coverage. But there already are Medicare products that do this. People with Parts A and B of Medicare — often called original or basic Medicare — can plug many if not all of their coverage holes with a Medicare supplement policy (also known as Medigap). Or they can buy a Medicare Advantage plan, which offers out-of-pocket spending ceilings. It’s possible your private plan has better drug coverage than the Part D plan you would get from Medicare. But I can’t see a reason to pay for a comprehensive private insurance plan just to get an enhanced drug benefit. As for getting a Medicare supplement policy, I think it makes sense for those with Original Medicare in order to avoid potentially catastrophic claims. As noted, Medicare Advantage plans offer this protection as well, and for that reason, Medigap plans may not be sold to Medicare Advantages users.

Mary – Okla.: I am turning 65 this year, but I do not want to switch to Medicare. I have excellent coverage for only about $50 per month that covers everything 100 percent — no out-of-pocket costs, prescriptions are zero, co-pay is zero, deductible is zero and everything is covered though Everything is now free, except for my low monthly premium, because I am a member of a Native American tribe, and my income qualifies for this plan. Why should I switch to Medicare, which a lot of doctors do not like? Do I have to switch if I don’t want to?

Phil Moeller: Mary has a great health plan, but most likely will have to give it up. That’s because most people covered under an Affordable Care Act marketplace plan will have to switch to Medicare when they turn 65. There is a major exception here that involves whether a person’s work history has qualified them to receive free Part A Medicare coverage. Please bear with me here as this exception involves a trip into Social Security rules.

Part A is the part of Medicare that covers hospital expenses, and it’s funded by a portion of the Social Security payroll taxes that people have deducted from their paystubs. Each $1,260 in such wage income earned in 2016 will entitle a person to one quarter of so-called “covered” earnings. (This wage requirement changes each year.) People who are not disabled will qualify for Social Security retirement benefits after they have accumulated at least 40 quarters of covered earnings.

If Mary has not accumulated 40 quarters of covered earnings by the time she turns 65, she will not be eligible for free Part A insurance premiums. Nothing involving Medicare or Social Security is so straightforward of course, as it turns out that Mary would qualify for free Part A — even if she’d never worked a day in her life — if her spouse’s work history qualified for Social Security.

If a person has not qualified for free Part A, they will have to pay a hefty premium of up to $411 a month. Anyone in this situation will not have to sign up for Medicare, but can keep their exchange plan. Here’s’s explanation of the rules. If Mary does qualify for Social Security, she probably will have to sign up for Medicare during her seven-month initial enrollment period. This period includes three months before her 65th birthday, her birth month and the following three months.

Terry – N.Y.: I turn 65 in July. I am now receiving Supplemental Security Income. I get private health insurance under a Medicaid plan and pay nothing for medical coverage. Do I need to apply for Medicare when I turn 65? Do I get to keep Medicaid? I have a lot of medical problems, am afraid to change anything and worry about losing access to my current doctors and surgeons.

Phil Moeller: You do need to apply for Medicare and most likely will be able to continue your Medicaid coverage as what’s called a “dual eligible” beneficiary who qualifies for both programs. I suggest you call a Medicare counselor in your state who works with the State Health Insurance Assistance Program (SHIP). Review your situation, and determine the best steps for you to take. Best of luck!

Pamela – Mo.: I have enrolled in Medicare Parts A and B. I’m not sure if there’s anything else I’m supposed to be signing up for or required to get. I take two medications. Do I have to sign up for Medicare Part D? My funds are low right now, because I need to keep working and have just started a new business with friends. I have no other insurance right now except Parts A and B. Eventually, I probably will need a secondary insurance. I am so confused with it all!! HELP!!!

Phil Moeller: I know that moving to Medicare can involve an overwhelming series of decisions about very unfamiliar topics. Because money is tight, I suggest you look for a basic Medicare Advantage plan that has Part D coverage bundled into it. You’ll still have to pay your monthly Part B premium, but many Medicare Advantage plans charge a zero premium, so this will let you get your drug coverage at little if any cost. You need Part D to avoid lifetime late-enrollment penalties if you sign up for it at a later time.

Once you have a Medicare Advantage plan, you and your friends should explore participating in an affinity plan for group employer health coverage. This might be through a local chamber of commerce or industry trade group. If you qualify, you could then leave Medicare and get a private policy. I’m not saying the private policy will save you money, but it might. If your financial condition improves, you could use Medicare’s annual open enrollment period to see if there’s a better Medicare solution for you. Open enrollment runs each year from Oct. 15 through Dec. 7. I also suggest you discuss your situation with a SHIP counselor to make sure you’re making the right choices at the right times. And as I told Terry in the previous answer, best of luck!

Ken: I’m turning 65 in two weeks and already have Medicare Parts A, B and D. I am torn between buying Medigap Plan N or G. As I understand it, by checking with a doctor to confirm they accept Medicare assignments, you do not have to insure yourself against excess costs by buying Plan G. Insurance agents keep pushing plan F and G at me with scary scenarios of thousands of dollars of excess cost if I don’t buy their high-premium and high-insurance commission Plan F or G. Are there actually other examples where excess costs can come into play even if you only go to a doctor that accepts assignments?

Phil Moeller: Ken’s grasp of what basic Medicare (Parts A and B) and Medigap cover is not quite right, and his assumption could cost him enormous amounts of money should he have a serious health problem. Just because his doctor accepts Medicare and agrees to its billing rules, hardly means Ken is off the hook for uncovered medical expenses. Part B of Medicare will only cover 80 percent of insured expenses. So if Medicare’s allowed rates for a doctor’s services are, say, $1,000, Ken will be required to pay $200 of this amount out of his own pocket. If he required surgery or other major Part B expenses, he could face a bill that is 20 percent of a very big number. Part B covers not only doctor’s bills but other outpatient expenses plus durable medical equipment, which can be very expensive. Basic Part B covers only 80 percent of these changes. The Medigap plans Ken cites can plug this 20 percent gap. That is why they may seem expensive. The various Medigap letter plans must by law cover the same things. All Plan Cs thus must cover the same items. Ditto for Plan Fs or Gs or Ns. The only difference is price, and there may be large differences in what different insurers charge for the same letter plan. Ken should do some online comparison shopping at Medicare’s Medigap site and see if he can find a better Medigap deal. But he should either protect himself with a Medigap policy or explore whether a Medicare Advantage plan is a better choice for him. There is a separate Medicare Advantage Plan Finder that may help.