Why are my health insurance premiums going up and up?

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. The non-profit Medicare Rights Center is also providing on-going help.

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.

Stephen — N.C.: I am 68, my wife is 70, and we both are on Medicare Parts A and B, and have purchased a Part D drug plan. We have purchased supplemental insurance to cover what Medicare does not cover. Our problem is that our premiums keep going up and up. Our insurance agent says everybody’s premiums are going up. Are we doing this the right way? Does the Affordable Care Act (ACA) help us at all here?

Phil Moeller: The ACA helps a lot but not with premiums. It has greatly expanded the range of free and reduced-cost care offered to Medicare beneficiaries, including an annual wellness physical. The law also is reducing Medicare drug costs by closing the so-called donut hole over the next few years.

Now, as far as your premiums are concerned, and with all due respect to your insurance agent, there may be some things to do. You are most likely locked into your current insurance plans though the rest of this year. But this fall, you should look carefully at whether a Medicare Advantage Plan with Part D coverage makes more sense to you. It may not provide coverage as complete as you’re now getting. But it might provide acceptable coverage and most MA plans cost less, and often much less, than a supplemental plan, also known as Medigap. Alternatively, there are 10 different types of Medigap policies. Is yours the most cost-effective given your health care situation? Also, while the terms of these 10 Medigap plans must be the same among all insurers that offer the plans, they are free to charge whatever rates they wish. So, you should check the rates of your current Medigap insurer and see how they compare with those of other insurers offering plans in North Carolina.

Monica — N.J.: My 40-year-old disabled daughter would like to obtain “Medicaid-Medicare” health insurance. Her congenital learning disability will continue throughout her lifetime. She has been classified as “disabled” and has been covered by Medicaid since the time she was no longer eligible to be covered under my health insurance.

Many well-qualified primary care physicians accept Medicare-covered patients but not those patients with only Medicaid coverage. I’ve been told that at least two requirements have to be met before obtaining “Medicaid-Medicare” health insurance: First, an individual should have and/or apply for Medicaid Disability Insurance (establishing disability and being unable to work) and, second, be unemployed with Medicaid Disability Insurance for two years. At that time, a “Medicaid-Medicare” card would be issued. Fortunately my daughter has been employed continuously since 1994 and has never collected Disability Insurance, but she needs better health insurance. She has never made over $37,000 a year. How can she qualify for “Medicaid-Medicare” health insurance?

Phil Moeller: First, I admire your daughter’s pursuit of a productive life, and wish both of you the best of luck. Based on what you’ve told me, you are seeking for her to be able to become so-called “dual eligible” and be covered by both programs. The first thing I’d suggest is that you get in touch with the New Jersey SHIP office and make sure you understand the state rules for dual eligibles. The next step is to apply for Social Security Disability Insurance (SSDI). You are correct that two years of SSDI coverage are required before she is eligible for Medicare. However, your daughter does not need to be unemployed to be eligible for SSDI. If she qualifies for SSDI payments, her Medicare eligibility should automatically begin during the month when she receives her 25th SSDI check. Social Security should already have mailed a Medicare card to her three months before she becomes eligible.

However, one big issue you will face is whether your daughter’s wage income is too high for her to be approved for SSDI. Dorothy Clark, a Social Security spokeswoman, explains that an important consideration for SSDI is whether the applicant is still able to perform work that represents what the agency considers “substantial gainful activity,” or SGA (Social Security has an abbreviation for everything.) The SGA threshold is adjusted every year based on prior-year wage inflation. “The amount of earnings we consider to be SGA for impairments other than blindness is more than $1,090 a month for 2015,” Clark said.

I don’t know how much money your daughter has been earning of late, but it actually could pay for her to reduce her wage income if it would now be considered SGA. Another important income issue is whether the new income from SSDI payments will affect your daughter’s eligibility for Medicaid and possibly the financial assistance that might be available to help pay her Medicare premiums. Again, your local SHIP office should be able to help with this.

Jo – M.d.: I retired in 2012 but will turn 65 this June. I am a retired county employee and am covered under its retirement insurance. Do I need to sign up for Medicare? Is there any reason why it would be good for me to continue my retiree plan and to also get Medicare?

Phil Moeller: Most retiree plans become what are called “secondary payers” to Medicare once their members reach age 65 and must sign up for basic Medicare (Parts A and B). If your plan is one of these, you may have no choice but to sign up for Medicare. If this is the case, you will need to enroll no later than this fall or you may face a premium penalty for late enrollment. The other set of decisions you need to make is how your total costs for your retiree coverage plus basic Medicare compare with a Medicare-only solution that could include a Part D drug plan and a Medigap policy or a Medicare Advantage plan that includes Part D drug coverage. This can be a complex decision and one that your former employer’s retirement benefits department can help you to make.

I’m assuming your retiree plan includes drug coverage. If it is at least as good as a Medicare Part D plan – “credible” in Medicare lingo — you can keep it. If you later change your mind and switch to a Part D plan, you will not face a penalty and be forced to pay higher premiums. If your income is low, you might qualify for what’s called “Extra Help” in paying for drugs under a Medicare Part D plan. In this situation, Medicare might be a better deal than your retiree drug plan.

You do not say if your retiree plan only includes you or also covers other family members. If your spouse and children are covered on your plan, and they are not eligible for Medicare, you probably should keep your retiree coverage.

You or other retirees in similar situations also should be aware that some employers sponsor Medicare Advantage plans for retirees who are eligible for Medicare. If you worked for such an employer, you can get both your Medicare benefits and your retiree health benefits by signing up for a Medicare Advantage plan that has a contract with your former employer. Some employers require that you join a Medicare Advantage plan to continue getting retiree health benefits. You can always choose not to take your employer’s coverage and sign up for other Medicare plans. But if you do this, you may not be able to rejoin the retiree plan later.

Lastly, If you have health insurance from an HMO under the Federal Employees Health Benefit Program (FEHBP), your coverage may be comprehensive enough that you will not need to sign up for Medicare Part B coverage. Note, though, that if you wish to sign up for Medicare later you may still face a penalty and will only be able to enroll during certain times of the year.