Is it worth keeping Medicare if I’m covered by my new employer?

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.

Helene – Pennsylvania: I was out of work when I turned 65, so I went on basic Medicare, with a Part D drug plan and a Medigap policy. Since then, I have gone back to work full time and am on my company’s plan. I have dropped the Medigap policy, but have continued paying Medicare and wanted to have them as a secondary insurer. Is this OK to do? Also, I have continued paying my Part D prescription plan, but also have drug coverage with my group plan. Should I stop my drug plan? And if I do, I want to be sure I will not be penalized when I need it after I retire. Please set me straight.

Phil Moeller: The wisdom of continuing to pay for Part B depends on how well your workplace policy covers expenses for what Part B covers — doctors, other outpatient services and durable medical equipment. Is there still a 20 percent gap or do you have protection on your annual out-of-pocket exposure? Most commercial plans cap your exposure after you’ve paid your annual deductible, making Part B unnecessary. It is even less likely that continuing to fork over a premium for your Part D prescription drug plan will make sense.

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

In both cases, I recommend you speak with your workplace insurer about how its coverage works and what it has to say about retaining any Medicare coverage. In particular, make sure your workplace drug coverage is considered “credible” — at least as good as a Part D plan. Otherwise, you are supposed to have Part D.

When you returned to work and reacquired group employer health insurance, you effectively got a “do over” on your Medicare sign-up rights. When you are no longer an active employee, you will be able to sign up again for Medicare with no late-enrollment penalties.

Anita – Missouri: If I sign up for a Medigap plan F policy and later get a job with employer insurance, is it a bad idea to drop the Medigap policy? Also, since all the same letter-plan policies, such as plan F, have the same coverage, I have been told it is wise to pick a company you have heard of that is towards the cheaper end of the list of companies and that provides the plan you want. But I am wondering how can you tell which companies have the most consumer complaints filed against them? I’m thinking that is something I should check and that I should pick a company that has fewer complaints.

Phil Moeller: If you get a job with employer group coverage, you generally can drop your Medicare policies and enjoy fresh sign-up rights when you leave work and go back to Medicare. In terms of specific insurers, it is always wise to check out the website of your state insurance department and see if there is relevant information on consumer complaints. The gold standard of reliable complaint information occurs where the insurance department has investigated and resolved them. Complaints can vary greatly by location, even within a state, so finding the most specific geographic information is important.

Margaret – California: My claim for Social Security Disability Insurance, or SSDI, was recently approved along with Medicare, about which I know very little. My doctor is not a Medicare provider. Before being SSDI-approved, we had enrolled me in my husband’s former employer’s plan, costing us almost $500 a month just for medical alone. Dental is extra. What are my options here? I contacted Medicare, and they say I have to pay the medical bills in full first before I can file a claim and that my doctor cannot submit them unless she agrees to become a Medicare provider. The medical bills for this period of time are about $12,000, so that is not an option for me. Can I terminate Medicare since my doctor does not accept Medicare anyway? Will there be penalties, and can I re-enroll in Medicare later when I’m 65? (I’m presently 62.) Or am I forced to find a new doctor who accepts Medicare?

Phil Moeller: You are a living argument for national health care! Your medical care should not be so adversely affected by who insures you or whether a doctor accepts Medicare or not.

But it is. Medicare will not pay more for a covered medical procedure than its approved rate. This is a solid consumer protection benefit and helps hold down medical expenses. Doctors often complain about Medicare’s low payment rates, but nearly all of them participate anyway, because Medicare enrollees are such a large group of patients (and, yes, doctors do get into medicine to help people).

You do not have to take Medicare right now. I do not think you would face late-enrollment penalties until you turn 65, but I’d confirm this with Medicare. If you have trouble getting an answer, call the State Health Insurance Assistance Program. It is government-funded and provides free Medical counseling to consumers. If this doesn’t work, let me know, and I’ll put you in touch with some other experts.

If you want to continue seeing your doctor, you’d need to figure out an acceptable repayment plan for that $12,000. Moving forward, there is a slim chance you could keep seeing this doctor and get on Medicare if the doctor agreed to only charge the Medicare-approved rate for your care. While the doctor cannot submit these claims, you might be able to do so. This is not a normal solution, to be sure, but Medicare would not be worse off, and you’d get the care you need from the doctor you prefer.

If you wanted to pursue this approach, it might be easiest if you were working with a Medicare Advantage insurer. Otherwise, you’d have to submit your claims through the Medicare contractor that administers Part B coverage where you live (Part B of basic Medicare covers doctors’ expenses). Ask your doctor if she is included in any Medicare Advantage plan provider networks. If so, call those plans, and see if they would submit your claims for doctor services if the doctor agrees to accept Medicare’s rates for your care. Also, while basic Medicare does not provide dental benefits, some Medicare Advantage plans do (although the benefits in all dental insurance are modest).

If your doctor is not in any Medicare Advantage networks, Medicare may not be for you right now. I do not know the terms of your coverage through your husband’s health plan. Have you looked into getting covered under Obamacare by Medi-Cal? You might qualify for premium tax credits and wind up with a better deal.

I know that this still leaves you with the issue of that $12,000 doctor’s bill. But I know of no insurance plan that will pay this on your behalf. Please let me know how things turn out.

Mike – California: I’m not clear on how concierge care intersects with Medicare. I’ve read about ethical concerns that a concierge doctor gets paid twice. How? I currently pay an annual amount to the doctor and what happens in his office — physical exam, consultation, maybe a flu shot, a small procedure (he helped with a corn/callus) — all goes without charge. Yes, my employer insurer applies for prescriptions, lab work, x-rays, etc. If I can afford the annual fee and want the benefit of speedy office access and email and phone availability, the annual fee could be a good buy that doesn’t terribly exceed traditional visit co-pays to a doctor I might not otherwise choose.

Phil Moeller: Medicare works with concierge practices. It’s up to a concierge physician whether or not they want to accept Medicare patients and whether or not they are willing to accept assignment from Medicare.

Assignment means the health care provider agrees to accept Medicare-approved charges as payment in full for their services. Most doctors who accept Medicare also accept assignment, but it’s possible for a doctor to accept Medicare patients without agreeing to assignment. Such “non-participating” doctors can bill you more than the Medicare-approved amount for their services, although Medicare rules limit such overcharges. Medicare will still work with such doctors, but you should be aware of the billing situation in advance.

Your doctor’s office should be able to explain all of this to you, including details of whether the doctor will be submitting claims to Medicare for reimbursement of covered services or if that’s something you need to do. Medicare does not cover concierge fees, and the doctor should not be billing Medicare for the services provided in exchange for concierge fees.

Karin – California: I have an 84-year-old mother who just received $250,000 for an investment property she sold in 2016. Her Social Security has dropped from $1,800 a month to $1,400, and they say it’s because she has to pay more into Medicare since her income has increased. I thought income was earned income — and certainly not income from investments or interest or dividends.

Phil Moeller: Unfortunately, Social Security is correct. There are high-income surcharges for Medicare Part B and D premiums called income-related monthly adjustment amounts, or IRMAA. They are based on a measure of taxable income called modified adjusted gross income, or MAGI. It does include taxable investment income.

There usually is a two-year lag in IRMAA taxes, with 2017 surcharges being based on 2015 tax returns. Your mother appears to have gotten tagged only one year after receiving the gain. Under no circumstances should she be dinged for two years of IRMAA if her income jumped in only a single year.

Whatever the time lag, the effects of this surcharge will end once your mother’s income declines next year. Her Social Security should then return to normal. This is no fun, I know, and lots of Social Security recipients are upset at what they consider to be double taxation on their income.

Does the “repeal and replace” Obamacare debate impact Medicare beneficiaries? Phil Moeller answers that question in this explainer.

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