Medicare Part A? B? D? HSA? What the?

[WinniWoman]

So hubby's open enrollment period for 2019 is coming up at his job and we have to make some decisions.

He turns 65 in April. Not retiring. He has always contributed (the max) to an HSA since he has a high deductible plan, but if he applies for Medicare in 2019 he will no longer be able to do so.

If he does not apply for Medicare, and decides to retire April of 2020- when he turns 66- he will have had to stop contributing to his HSA 7 months BEFORE that date-around October 2019- or face tax penalties. Then he is going to have to immediately apply for Medicare when he turns 66 upon retirement.

So- my question is: Should he apply for Medicare Part A in January 2019 or should he wait until he retires in 2020 (or whenever he does retire)? What about Part B? Should he apply for that also or wait? He would be keeping his health insurance through his job no matter what. His employer is a large one so the insurance would be primary over Medicare.(I am also covered under that plan.) I heard sometimes it is a hassle to apply for Part B later on when you do retire- it takes a while to take effect and you could have a gap in insurance coverage(?).

And- what about D then? How does that come into play? Since he has employer insurance with drug coverage I assume we can forgo that- or can we?- there are so many rules my head spins. Will it be an issue later on when he no longer has employer heath insurance and need drug coverage through Medicare? Yikes.

My thinking is that Part A is free anyway. His insurance is high deductible and Medicare, though it has a deductible also, could pick up for anything his insurance does not should something happen medically before he retires. With Part B, since he would not be contributing to his HSA, he could divert some of that money for the Part B premium. (He does not pay a premium for his insurance at his job- at least up until now his company pays for him in full. We do pay a premium for me). Then Part B could also pick up for things his insurance does not pay for as well. My husband could also divert some of the money he would normally have put in the HSA into his 401K, which he recently had to cut contributions because of my job loss. Or honestly we could use some of the extra money in our household budget so it wouldn't be so tight.

Know that we have been healthy so far. We get preventative care. Hubby is on blood pressure meds (cheap through his employer prescription plan) and has to visit the doc every 6 months and have lab work. Have to lay out for colonoscopies because we have both had polyps in the past.

So the downside is that he could not contribute to the HSA (well he could for the first 3 months of the year, but why even bother- the tax advantage would be minimal) if he goes on Medicare and if he doesn't he still cannot contribute to the HSA for the entire 2020 year either, though he can get a chunk of money in there- again- not worth the hassle and tax advantage I would think (our income in 2019 will be lower than this year, since I am no longer working).

I contacted his HR dept and the reps there were useless. I finally was directed to a retirement specialist at the company (even though hubby is not retiring) and she was somewhat helpful but couldn't help me on this particular issue. She then directed me to another company called Via Benefits which supposedly handles his company's employees in transition when they are eligible for Medicare and retire and so forth. That rep also said she could not assist me because my husband was not Medicare eligible yet and would be getting a card in the mail from SS in January and at that time I could call back and ask questions. She said their advisors were sales reps. and could not answer these questions at this time. Huh? I tried calling Medicare and was on hold so long I hung up. Then I tried the local SHIP office via phone and they were not there. OMG...

How can someone plan and make decisions without the proper information? I don't get it.

Anyway, hoping someone here has some insight into this.

 

[bogey21]

I'm no expert on timing Medicare but would sign up as soon as eligible. I think what happens is that Medicare becomes Primary and Employer Insurance becomes secondary. There are penalty issues with Parts B and D which I don't thoroughly understand for not signing up when first eligible. I think the penalty for Part D is waived if you get a letter from your employer saying that you had prescription coverage with Employer that was equal to or better than Part D. Bottom line is that I would sign up as soon as eligible to avoid having to deal with Medicare to get penalties waived...

George

 

[WinniWoman]

If an employer has more than 20 full time employees, I read that Medicare is secondary.

I did read something about your employer drug plan having to be "credible". In other words- equal or better than the Medicare drug plan.

 

[FrankB]

Try this link...scroll down and go to Publications then go to Topics and select Medicare
https://www.ssa.gov/

 

[b2bailey]

I agree all of this can be a bit overwhelming. However, no matter how much info you can gather from the sources mentioned, I don't think anyone can answer "what should I do". Also, it seems you are tangling up two questions -- one is health care related, the other is tax implications. Perhaps look at the two separately.

 

[Talent312]

(1) Your state may have a senior health insurance counselling program, as Florida does thru it's Department of Elder Affairs and local Agency on Aging. In Florida, it's called SHINE (Serving Health Insurance Needs of Elders).

(2) You need to be darn-sure that his employer group policy will still be primary when he's medicare eligible. When I turn 65 (a few months), my state employee/retiree plan becomes secondary. Thus, we are strongly advised to enroll when first eligible.

(3) Either way, he needs to enroll in Part A as it's free (no premium) during his "initial enrollment period" (starts 3 mos before the month he turns 65). If his employer group policy is still "primary," he can wait on Parts B & D until he retires or coverage ends. He can then enroll without penalty during a "special enrollment period" (his HR office needs to certify coverage). OTOH, if his coverage becomes "secondary," he needs to enroll in all parts during the initial enrollment period.

(4) If he enrolls in Parts B & D while still employed, dropping his employer's policy and electing a supplemental plan may provide a considerable savings. To enroll in Part D, he'll need to self-select a drug-plan. When I turn 65, I will switch from my state-employee/retiree plan to either the employee/retiree supplement plan or another medigap plan.

Medigap and drug plans can be compared at...
https://www.medicare.gov/find-a-pla...rce=govdelivery&AspxAutoDetectCookieSupport=1
.

 

[DaveNV]

I am no expert, but recently went through this when I turned 65 earlier this year. After many years of having insurance through the military (Tricare Prime) as my only insurance, when I became Medicare eligible, everything flipped. Medicare stepped in and became my primary (Part A) and Tricare turned into "Tricare For Life," and became my Part B. I received a Medicare card in the mail just prior to the month I turned 65, and on the first of that month, Medicare became my primary insurer. One advantage for me is that Tricare For Life also acts as Part D, so I did not need a separate prescription coverage plan. It's been weird, because it's so different, but so far, seems to be working. Cross your fingers.

The one thing I wasn't prepared for, and am still not sure I fully understand, is I have to pay Medicare (CMS) a monthly premium of $134 for my Tricare coverage. What was costing me a several hundred dollars a year as my primary coverage now costs me three times as much to be my secondary coverage. I haven't been able to get a straight answer from anyone about that one.

The one thing I heard throughout is to be sure to sign up when first eligible. If you don't, there are penalties assessed, which can delay coverage for the time you were eligible and didn't have coverage. It's confusing, because nobody tells you what you should be signing up for, exactly.

As Alan Cole likes to say, "Is this a great country or what?"

Good luck wading through stuff. It's a minefield, for sure.

Dave

 

[Luanne]

Bottom line is, you HAVE to sign up for Part A when eligible. If still working you can wait on Part B.

 

[VacationForever]

The one thing I wasn't prepared for, and am still not sure I fully understand, is I have to pay Medicare (CMS) a monthly premium of $134 for my Tricare coverage. What was costing me a several hundred dollars a year as my primary coverage now costs me three times as much to be my secondary coverage. I haven't been able to get a straight answer from anyone about that one.

Dave

$134 per month is the base cost of Medicare which everyone on Medicare pays. Even if you have Tricare or whatever employer plan, you still have to pay the minimum $134 per month. This amount is dependent on household income.

 

[b2bailey]

$134 per month is the base cost of Medicare which everyone on Medicare pays. Even if you have Tricare or whatever employer plan, you still have to pay the minimum $134 per month. This amount is dependent on household income.

is this the amount that is withheld each month from my social security payment? If yes, would this mean a person on medicare, but not yet collecting ss benefits would have to pay this amount?

 

[VacationForever]

is this the amount that is withheld each month from my social security payment? If yes, would this mean a person on medicare, but not yet collecting ss benefits would have to pay this amount?

Correct. That is the monthly premium for Medicare. It is independent as to whether you start SS or not. If you start SS, then that monthly premium is deducted directly from your SS, otherwise it is from your bank account.

 

[Passepartout]

All I know, I read on TUG, and that's that you MUST sign up for Medicare when you turn 65 or face penalties henceforth.

 

[VacationForever]

All I know, I read on TUG, and that's that you MUST sign up for Medicare when you turn 65 or face penalties henceforth.

Yep, that is my knowledge too.

 

[JohnPaul]

Part A of Medicare is automatic when you turn 65 and does not have a premium.

Since Medicare does not discriminate for pre existing conditions, there are penalties if you wait to enroll (like until you get sick). However, if you have "creditable" healthcare between the time you turn 65 and when you start Medicare the penalty is waived. Insurance from you or your spouse's employer is an example of "creditable" insurance.

If you wait to enroll and don't have creditable insurance for that time you will pay a higher Medicare premium for the rest of your life.

 

[DeniseM]

My husband was eligible for Medicare 2 years before he retired. He applied as soon as he was elgible, so he had company insurance and Medicare for 2 years. During those 2 years he had to have a couple of unexpected surgeries - between the 2 insurances, we didn't have to pay a cent.

*An experienced and reputable insurance agent can walk you through it - we found that to be extremely valuable.

 

[IngridN]

DH worked after he turned 65. As he had a cadillac plan thru work, he did NOT need to sign up for Medicare when he turned 65. He did sign up for part A shortly after 65 as it's free, covers hospital only and would act as secondary coverage if he was hospitalized. He signed up for Part B and D when he retired a few years later. There is NO penalty for signing up after eligible for Medicare as long as you have other coverage that complies. He did have to get a statement from employer verifying his coverage.

Ingrid

 

[pittle]

Part A is not free - it costs $134 per month (they take it out of your SS check) and becomes your Primary insurance. D is for drugs and is not included in A at all. (If you put this one off, there is a penalty for each year you do not have it. Neither of us take prescription drugs, but if we had waited until we do, we would have had penalties and paid much higher premiums.) B is our Supplemental insurance and we chose Plan F when the large corporation we worked for 30 years decided that they would no longer pay for 1/2 the medical insurance for retirees because of the new healthcare laws implemented in 2012. Plan F was better and less expensive than what we had paid for the high option plan offered by our company. We have no deductible and no co-pay and can choose any doctor that accepts Medicare. I understand that in 2020, we will need to choose Plan G for close to similar coverage.

 

[IngridN]

Original Medicare: Part A covers hospitalization and is free. Part B is doctor and base costs is $134/mo.; depending on income, you might be subject to IRMAA and pay more. Part D is Rx. If you have NO OTHER coverage and don't sign up at 65, you will incur a penalty forever and ever. If you have other coverage, no penalty, but will need to prove you had other coverage.

Advantage programs are somewhat different and I'm not that familiar with them.

You are getting a lot of wrong information in this thread. Go to Medicare.gov and read up. Or go to ER.org (early retirement forum). They have some great threads on everything you wanted to know about Medicare.

Ingrid

 

[Talent312]

Pittle, with all due respect, you are confused... Part A (Hospital Care) is free. There is no cost, whatsoever. Part B (Medical Treatment) is what your $134/month premium is for. Supplemental plans have an additional premium.

At age 65, my DW enrolled in Part A. She deferred enrolling in Parts B+D.* Only when she enrolled in Parts B+D did the $134/month premium kick in. Your supplemental plan (Plan F) is an add-on with an additional premium.

*If you keep primary employer group coverage, there's no penalty for waiting.
OTOH, if it's not going to be secondary, you need to enroll when eligible.

-----------------------------
JohnPaul, enrollment is "automatic" only if you're currently receiving SS (or RR benefits).
Otherwise, you have to enroll yourself.
------------------------------

.

 

[Luanne]

Part A is not free - it costs $134 per month (they take it out of your SS check) and becomes your Primary insurance. D is for drugs and is not included in A at all. (If you put this one off, there is a penalty for each year you do not have it. Neither of us take prescription drugs, but if we had waited until we do, we would have had penalties and paid much higher premiums.) B is our Supplemental insurance and we chose Plan F when the large corporation we worked for 30 years decided that they would no longer pay for 1/2 the medical insurance for retirees because of the new healthcare laws implemented in 2012. Plan F was better and less expensive than what we had paid for the high option plan offered by our company. We have no deductible and no co-pay and can choose any doctor that accepts Medicare. I understand that in 2020, we will need to choose Plan G for close to similar coverage.

I think you are wrong. From what I've heard (and don't quote me) is that at some point plan F for NEW subscribers will be going away. If you currently have Plan F you can keep it, and I think you can even change carriers.

Both dh and I have Plan F and use different companies for our supplemental plan. We also have Plan D. We are keeping Plan F and D. I am in the process of changing carriers this year and dh will probably do so as well.

From information found online at medicare.com. Here is link to entire article:

https://medicare.com/medicare-supplement/is-medicare-supplement-plan-f-going-away/

Is Medicare Supplement Plan F being discontinued?
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) passed by Congress and signed into law on April 16, 2015 changed the law on various aspects of health care, including some Medicare Supplement plans. The new law states that on or after January 1, 2020, a Medicare Supplement policy that provides coverage of the Part B deductible may not be sold or issued to a newly eligible Medicare beneficiary. You can read more here. That means that people whose birthday is December 31, 1954 (turning 65 on December 31, 2019) may be the last group able to enroll in Medicare Supplement Plan F. After January 1, 2020, you will not be able to enroll in Medicare Supplement Plan C, one of the closest alternatives to Plan F, either, since it also covers the Part B deductible. If you already have Plan F, you can keep it. The law only affects new enrollees.

 

[IngridN]

boomerbenefits.com, a Medicare insurance broker, gets high marks. I will be working with them in the next few months when I become Medicare eligible. I am also interested in dental insurance as we've been paying ~4K+/yr for DH and will most likely continue at that rate or worse. DH currently has original Medicare with AARP's UHC and we are very happy with them. They also offer Silver Sneakers, which, when I'm on Medicare will save us $1.5K per year in gym membership costs. Other insurers also offer SS. Lots of info our there. Also, depending on your state, you may not be able to change Medigap insurers w/o medical underwriting once you make your decision. Some states including ours allow once a year changes to Medigap plans of equal or lesser coverage around the birthday month. If your state does not allow changes, make sure you are happy with your decision. There is no 'open enrollment' with Medigap plans, only with Plan D Rx which can be changed each year.

Again, some of the above may not apply to Advantage plans.

 

[Patri]

They also offer Silver Sneakers, which, when I'm on Medicare will save us $1.5K per year in gym membership costs.

You have an expensive gym. Mine is about $300 a year if paid upfront. Includes a pool, weight rooms and classes. I see people who are members using their Silver Sneakers card.

 

[IngridN]

You have an expensive gym. Mine is about $300 a year if paid upfront. Includes a pool, weight rooms and classes. I see people who are members using their Silver Sneakers card.

$120/month for DH and me. Unfortunately, they don't participate in Silver Sneakers so we'll be joining one of the other 3 gyms in our area that participate.

Ingrid

 

[IngridN]

... ...
Is Medicare Supplement Plan F being discontinued?
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) passed by Congress and signed into law on April 16, 2015 changed the law on various aspects of health care, including some Medicare Supplement plans. The new law states that on or after January 1, 2020, a Medicare Supplement policy that provides coverage of the Part B deductible may not be sold or issued to a newly eligible Medicare beneficiary. You can read more here. That means that people whose birthday is December 31, 1954 (turning 65 on December 31, 2019) may be the last group able to enroll in Medicare Supplement Plan F. After January 1, 2020, you will not be able to enroll in Medicare Supplement Plan C, one of the closest alternatives to Plan F, either, since it also covers the Part B deductible. If you already have Plan F, you can keep it. The law only affects new enrollees.

Of concern to many, especially in states that do not allow changes w/o medical underwriting is "once they close Plan F, will premiums sky-rocket because no new, younger, healthy people are allowed to join?" I will most likely go with Plan G which is the same as Plan F except you pay the $138/yr deductible. We'll see how DH's Plan F plays out. If premiums sky-rocket, he'll switch to G during his birthday month. Or, insurers will dump Plan F allowing all participants to join other same/lesser Plans w/o medical underwriting. Will be interesting to watch.

 

[Talent312]

You have an expensive gym. Mine is about $300 a year if paid upfront. Includes a pool, weight rooms and classes.

DW got in on the ground-floor of the most popular gym in the area.
Her dues are only $170/year for life. Now, if she'd only go...

.