Medicare-related decisions can be quite challenging, especially when you or your spouse areabout to turn age 65, during your Initial Enrollment Period. The decisions can be even more complicated when you have other health insurance coverage. Deciding if and when to enroll in the various parts of Medicare, when you are first eligible, is an important choice, including how to avoid potential penalties or gaps in coverage. Most people enroll into Medicare Part A (hospitalization insurance) as this coverage is premium-free, if you have at least 10 years (40 credits) of work history recorded by the Social Security Administration. But what about other parts of Medicare?
You may delay enrollment into Medicare Part B (medical services coverage) if you have health insurance from your or your spouse’s current employer. You will have a Special Enrollment Period, or SEP, to enroll in Part B up to eight months after either the coverage or the current work ends, whichever is first. This SEP lets you enroll in Medicare without a late enrollment penalty and without having to wait for the General Enrollment Period. In most cases, though, you should only delay enrolling in Medicare if your job-based insurance would be the primary payer, meaning it would pay first for your medical bills and Medicare would pay second. Your job-based insurance pays primary if the employer has 20 or more employees. Even if employer coverage would be your primary insurance, you might consider enrolling in Medicare if you want a secondary insurance to help cover the cost of your care.
If you have another kind of health insurance when you become Medicare-eligible, it is important to know how it works with Medicare and when you should enroll in Medicare.
• Retiree insurance almost always pays second to Medicare, meaning you need to enroll in Medicare when first eligible or when you retire so you are fully covered. One exception is Federal Employee Health Benefits (or FEHB) retiree coverage. FEHB retiree plans continue paying primary for retirees who do not enroll in Part B. FEHB retiree plans only become secondary if you do enroll in Part B.
• If you have a Qualified Health Plan from the Marketplace (HealthCare.gov), you should almost always disenroll from it and enroll in Medicare when you become eligible.
• If you have continued your employer’s healthcare following job loss under COBRA, it is very important to enroll in both Part A and Part B. Your COBRA continuation rights usually terminate if you have COBRA before Medicare, and if you have Medicare Part A before you elect COBRA, the continuation coverage is secondary to Medicare and may not pay at all for outpatient care if you do not enroll in Part B.
• If you have Veterans Administration (VA) healthcare coverage and choose not to enroll in Medicare, you will not have health insurance for facilities outside the VA health system. You should sign up for Medicare when you become eligible if you want to get covered health care outside the VA system.
Note that having any of these types of insurance does not grant you a Special Enrollment Period if you delay Medicare enrollment. If you don’t enroll in Medicare when you are first eligible because you have one of these types of insurance, you will likely face lifetime premium penalties and a gap in coverage if you later enroll in Medicare.
Part D considerations
If you are considering delaying Part D enrollment because you already have prescription drug coverage, first find out if your coverage is considered creditable. Creditable drug coverage is as good as or better than the standard Medicare Part D drug benefit. If you have creditable drug coverage, you will not have a late enrollment penalty for delaying Part D enrollment. If you lose creditable coverage, you will have a Special Enrollment Period to enroll in a Part D plan. If you have no drug coverage, or have drug coverage that is not creditable, you must enroll in Part D when you are initially eligible to avoid a late enrollment penalty or gaps in coverage.
For answers to any Medicare related questions, please feel free to contact the State of Alaska Medicare Information Office at 800-478-6065 or 907-269-3680; our office is also known as the State Health Insurance Assistance Program (SHIP), the Senior Medicare Patrol (SMP), and the Medicare Improvements for Patients and Providers (MIPPA) program.
Sean McPhilamy is a volunteer and Certified Medicare Counselor at the Alaska Medicare Information Office.
