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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 email@example.com.
Ralph – Tenn.: If you sell your home to move to another state to retire, does that raise the cost of your Medicare Part B for that year, and how is that fair? Why do the proceeds from your house, a one-time event, put you into a high-income category?
Phil Moeller: Descend with me deep into the weeds, or, for the anatomically inclined, bowels of Medicare and Social Security bureaucracy. Ralph’s question involves what is called the Income Related Monthly Adjusted Amount. That’s IRMAA for short, although there is nothing particularly short about it.
In brief, Medicare’s rates for Part B (doctor and outpatient) and Part D (drug) coverages are higher for those with higher incomes. IRMAA involves Part B but Ralph’s official income levels should also affect his Part D premiums, according to the SHIP counselors who provide me advice for these answers.
Social Security, which does a lot of work affecting Medicare beneficiaries (you may shudder now), looks at a person’s federal tax returns to see if their income has changed and is high enough to cause a boost in their Part B and Part D premiums. There is normally a two-year lag, so the agency will look at a 2013 tax return in evaluating 2015 premiums.
Ralph apparently is concerned that the sale of his home will produce a big surge in his taxable income. This is a bit surprising, in that tax laws permit a hefty tax exclusion when someone sells their “last” home and does not roll over the proceeds into a new home. But let’s assume Ralph has done his homework here and, for whatever reason, has or will report a big rise in his taxable income tied to the sale of his home.
This added income will be flagged at some point in the IRMAA calculations. I’m on Ralph’s side here in that one-time gains like this do distort Ralph’s true income situation. Of course, IRMAA should only jack up his Medicare premiums for a single year. But still, unfair is unfair.
Fortunately, there is an IRMAA process to appeal unusual or “change of life” shifts in income. There are seven such qualifying events listed by Medicare. Unfortunately, most involve a loss of income, and selling a home is not among them. More unfortunately, if Ralph goes ahead with an appeal, he will be doing battle with the most bureaucratic agencies yet devised by the American government.
If he does appeal, Medicare says he must begin by asking Social Security to reconsider the initial determination of his Medicare premium. This is done by filing Form SSA-561. In a moment of understated modesty, the form lists only 39 separate reasons why someone would question an agency decision. Last but not least on this list, listed on the form under Title XVIII, is “Initial determinations regarding Medicare Part B income-related premium subsidy reductions.”
Good luck, Ralph. We’ll leave the light on.
Judy – Penn.: I have a friend who swears you can change Medicare coverage 30 days before surgery. I said this seems impossible. Please advise.
Phil Moeller: Your incredulity is well-founded. By itself, surgery does not allow a person to change their Medicare plan. However, there are situations where a person contemplating elective surgery might be able to time their decision to take advantage of any number of opportunities to switch plans. If your appendix bursts, I don’t recommend putting off surgery to get a better insurance deal! Of course, if suppuration is your thing, be my guest.
Even though open enrollment for Medicare just ended a few weeks ago, this question prompted the experts at SHIP to note that there is not one but bunches of periods when a person can change plans. Anyone who feels they are in the wrong plan or unfairly trapped in a bad Medicare insurance situation might benefit from knowing their enrollment ABCs.
Let’s start with the initial enrollment period. It begins three months before your 65th birthday and extends to include the month of your birthday and the three following months. Then there is the just-concluded open enrollment period, which runs from Oct. 15 through Dec. 7. And, just when you thought you might be getting the hang of this thing, there is a Medicare Advantage disenrollment period, which runs from Jan. 1 through Feb. 14.
Also, there are a slew of special enrollment periods that can be triggered by significant “life events”: moving out of your plan’s service area; being enrolled in a plan that decides to leave the Medicare program or reduce its service area at the end of the year; changing employment that involves the loss of employer or union insurance coverage; entering, residing in or leaving a long-term care facility; or receiving retroactive notice that you’re entitled to Medicare.
“If your friend is in any of the following programs he or she would have a special enrollment period through the year: Extra Help, the Low Income Subsidy, Medicaid or any level of the Medicare Savings Program,” a SHIP counselor added.
In addition, you can join or switch at any time of the year to a private Medicare insurance plan that has a five-star quality rating from Medicare. This really amounts to a continuous special enrollment period. There may be other situations that entitle you to continuous enrollment choices, SHIP says. Call the SHIP office in your state if you need more details.
Medicare recently created yet another special enrollment period to take effect next year. It involves decisions by Medicare Advantage plans, after a program year has begun, to drop doctors or other health care providers from their provider networks. In some cases where this happens, Medicare will provide plan members a three-month special enrollment period to find other plans. Details on qualifying events have not been released but Medicare is the only entity that can call for such a special enrollment period; individuals can’t request one.
So, the narrow answer to Judy’s question remains no. Having surgery is, by itself, not a triggering event for changing Medicare plans. But if that hospital stay led to being qualified for a Medicare-covered rehabilitation stay, the person then would be able to switch plans.
Karen — Ariz.: Does Medicare pay for cataract surgery? My supplemental insurance is Humana. Will Medicare or Humana help pay for any expenses for oral surgery? I do not have additional dental insurance. I am prepared to pay for the surgery, but wonder if Medicare or Humana will pay for medications I may need after the surgery.
Phil Moeller: Medicare and your Medicare supplement plan (also known as Medigap insurance) will cover the costs of medically necessary cataract surgery and the costs of new prescription glasses afterwards. However, you may have some out-of-pocket costs depending on which type of Medicare supplement plan you are enrolled in and whether your provider accepts the Medicare-approved rate. You can contact the Arizona SHIP agency toll free at 800-432-4040 to obtain more information on your Medigap plan.
Unfortunately, Medicare does not cover oral surgery in most circumstances, except: when you have a disease that involves the jaw (like oral cancer) and need dental services that are necessary for radiation treatment; you had a facial tumor removed and had ridge reconstruction (reconstruction of part of the jaw) as part of that procedure; you need surgery to treat fractures of the jaw or face; or you need dental splints and wiring as a result of jaw surgery.
Medicare supplement plans do not cover prescriptions, so I’m assuming you also have a Part D drug plan. It will cover your medications as long as they are included in your drug plan’s formulary.
Phil Moeller is the author of “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs” and the co-author of the updated edition of The New York Times bestseller “How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security,” with Making Sen$e’s Paul Solman and Larry Kotlikoff. On Twitter @PhilMoeller or via e-mail: firstname.lastname@example.org.
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