Getting your hands around slithery COBRA coverage

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.

Medicare rules and private insurance plans can affect people differently depending on where they live. To make sure the answers here are as accurate as possible, Phil is working with the State Health Insurance Assistance Program (SHIP). It is funded by the government but is otherwise independent and trains volunteers to provide consumer Medicare counseling in state and local offices around the country.

Moeller is a research fellow at the Center on Aging & Work at Boston College and co-author of “How to Live to 100.” Follow him on Twitter @PhilMoeller or e-mail him at medicarephil@gmail.com.

Gerry – Ore: Could they make it any more complicated? As I was about to turn 65, I followed conventional wisdom and signed up for Medicare Part A. A few months later my employer pushed us toward a high deductible health plan with a health savings account. So I had to un-enroll from Medicare so I could take advantage of the HSA, which included a company contribution. That took six months and multiple calls and visits to the Social Security office. Sigh.

By the time I had successfully un-enrolled from Medicare, I had agreed to take an early separation package from my company and this summer signed up for Medicare Parts A and B. My separation package includes 12 months of paid COBRA coverage [COBRA stands for the Consolidated Omnibus Budget Reconciliation Act under which it was created]. It has creditable drug coverage, so I don’t need Medicare Part D drug coverage just yet. Also, my COBRA provides dental and vision insurance. Otherwise the COBRA-funded coverage is secondary to Medicare and is sort of superfluous. So that’s the set up. Here’s the question (or questions):

I’m not sure at this time if I will go with traditional Medicare or an Advantage plan. I’ve read that when my paid COBRA ends (July 2015), I should be able to sign up for a Medigap policy, and that I’ll be guaranteed coverage because going off COBRA counts as a life change event. I’m dreading getting to next summer and learning that everything I heard was wrong, so I wonder if I should make a decision now and sign up for something sooner during one of Medicare’s open enrollment periods. I would essentially be double paying for another health insurance policy for half a year but I’d rather be safe than sorry. Can you help me figure this out?

Phil Moeller: Gerry has done a really good job of understanding her health insurance. So, it’s a sad tribute to Medicare’s complexity that she is still considering double-paying for health insurance rather than risk running afoul of some arcane sign-up rule that requires top-secret clearance and a Hippocratic handshake.

The good news here is that Gerry needn’t worry about getting guaranteed access to a Medigap policy (also called Medicare supplement insurance). She has the right to buy such a policy if she has basic Medicare (sometimes called original Medicare) or an employer group health plan (including retiree or COBRA coverage) or union coverage that pays after Medicare pays, and that plan coverage ends. She will have 63 days after the formal end of her COBRA coverage to preserve her guaranteed access to Medigap. The clock will start ticking on the latest of these three events:

• The date the coverage ends
• The date on the notice you get telling you that coverage is ending (if you receive one)
• The date on a claim denial, if this is the only way you know that the coverage ended

Also, in terms of finding new drug coverage, she’ll have the same time frame — 63 days – to get a prescription drug plan.

We’ve explained Medigap plans before. While they do, as their name implies, cover a lot of gaps in basic Medicare, they do not cover non-surgical vision and dental needs. The same insurers that offer Medigap policies likely offer dental and vision plans as well. Lastly, of course, Gerry will need a Part D plan.

Alternatively, she could look at Medicare Advantage plans offered where she lives. Many of these plans also come with Part D options, and their insurers offer supplemental dental and vision plans as well. Depending on her health needs, Gerry may find Medicare Advantage a cheaper choice than Medigap. She can’t combine Medicare Advantage with Medigap. It’s one or the other.

Gerry’s choices reflect a logic that only a bureaucrat could love. After decades receiving employer-provided health insurance, few people are prepared for the range and complexity of health insurance choices once they turn 65. Add this to the list of compelling reasons to never retire.

Robert – Wash., D.C.: When I left my employer (and its health care plan), I went onto COBRA. I did not notice that I had to join Medicare (Part B) within eight months. So, after missing the 2013 window to get Medicare, I had to join an Affordable Care Act plan, in order to comply with the requirement to have coverage. Then, late last year, I learned that I cannot apply to join Medicare Part B until Jan. 1, 2015, and that coverage will not become effective until July 1. Why not?

Meanwhile, I have to continue my Obamacare plan, which is five times more expensive than Medicare Part B. This makes no sense. Why is the law written this way — assuming that this is the law? The choices I was given, by the way, were only explained to me after many unsuccessful attempts to find out on the Internet and on the phone (including from the government’s Medicare site and its Social Security site) and a personal visit to the Social Security office here in Washington, D.C.

Phil Moeller: Oh, joy, another COBRA question. Robert appears to have descended into an even more punishing circle of regulatory hell than Gerry. According to the experts at SHIP who provide advice to me for this column, problems understanding when to sign up for Medicare are an unchecked epidemic. “Unfortunately, we see this every year,” one SHIP counselor told me. “I tell people Medicare is a ‘voluntary mandatory program.’ A person is not forced to sign up for Medicare during their enrollment periods. But if the person needs to get Medicare coverage there are rules in place for enrollment which include specific dates to apply and when coverage starts.”

I am not sure where Robert got the notion that he needed to sign up for Medicare within eight months. That is roughly the sign-up window for people who turn 65 without any health insurance. But Robert had COBRA coverage and, as we explained to Gerry, he had 63 days to get Medicare after his COBRA coverage ended, not after he turned 65.

“Robert, I am sorry you missed your opportunity to enroll in Medicare Part B,” another counselor said, continuing:

The enrollment period you missed was in effect before the Affordable Care Act was made possible. Individuals, like yourself, who found themselves without sufficient coverage were unable to even purchase insurance before the affordable care act was implemented. . . . I would advise you to seek assistance from a SHIP counselor by calling 202-994-6656 to help you through your transition to Medicare.

(If I’ve not properly understood your question – an all-too frequent occurrence as I try to navigate Medicare topics – please try me again and I’ll give it another try.)

Arlyne – Calif.: I take Cymbalta for fibromyalgia. The generic option for this drug made me very, very dizzy. I’m told no company is covering it except Blue Cross. Their monthly fee is $119. The cost of Cymbalta through the Costco pharmacy is listed at $85 for 30 pills, and Costco may raise the price. Do you have any suggestions to help me lower this unaffordable cost?

Phil Moeller: I’m so sorry to hear about your problems. Medicare Advantage plans and Part D prescription plans are allowed to choose which drugs to include in their plans. Currently, there are only a few plans in your town that cover Cymbalta. Most cover the generic that does not work in your situation. One option is to see if you qualify for the Extra Help subsidy for prescription drug costs. You also can contact your local California HICAP office (Health Insurance Counseling and Advocacy Program) at (800) 824-0780 or (800) 434-0222 for assistance or you can go to the Social Security website and apply for help online.

You also might consider contacting your health plan to see if there is another pharmacy that it is willing to work with that can provide you a better cost for this drug. It is possible to file an exception request with your Part D drug insurer to get a brand name drug covered if the plan only covers the generic. You’ll need your doctor’s help with this and there is no guarantee the plan will approve the exception request, or that its price will be any better than those you’ve found.

Many drug manufacturers and non-profits have assistance programs to help individuals who have challenges affording their medications. Your drug is made by Ely Lilly. I looked at its assistance program, but it does not appear to be open to people who already have drug insurance. Needy Meds, a website helping consumers find lower drug prices, listed several possibilities for Cymbalta. The National Council on Aging sponsors BenefitsCheckUp, providing a range of help programs for drugs and other senior expenses.

Please let me know if you find help. Best of luck!