Declining Part B, C and supplemental

[MarkS934520]

I’m on Medicare and have been paying for Part B, Part C and supplemental (Part G) for about 10 months.  I’m starting a new job, though, and I need healthcare coverage for my wife and 23 year-old daughter.  Right now they have COBRA from an earlier job and that will run out at the end of this year.  The only way I can get them covered under my new employer’s plan is to cover myself as well, but if I do so my total costs will rise above what we are currently paying. I’m tempted to discontinue my Part B, Part G and/or perhaps my Part C which total is around $250 a month.  That would bring my costs down, but what would be the impact when if I retire and/or my wife can be covered under Medicare (3 years) and/or my daughter can no longer be covered (also 3 years)?  I’m told I MIGHT have to go through underwriting to qualify for a supplemental plan again, but I don’t know if there would be a waiting period with exclusions for preexisting for Part B coverage.  I’m also told it’s possible that such an event as I describe would mean I could have a new Open Enrollment Period which would solve that problem, but I don’t know that for sure.  Anyone sure about this?

[GailL1]

@MarkS934520

I have solicited the help on the Medigap part of your question to a special friend to see if they can add anything - hopefully, they will post here if and when available.

You do know that most people just retire . . . . . . and continue on.

So your situation is a little outside the norm.  Government programs don't handle "exceptions" too well.

[MarkS934520]

You are truly awesome, Gail.  Thank you so much for your help.

Yes, I know that the bureaucracy tends to be inflexible and we have been aware that we may not be able to shave costs much if any at all.  Most employer health plans are also no longer very flexible either, and covering just my family and not me is just not an available option.

Very grateful for your thoughtful, insightful and CLEARLY WRITTEN responses.  That’s so rare.  You are special, I can tell.

[GailL1]

Mark,

As with anything else that is outside the mainstream of Medicare - It's complicated.

1st thing, Mark - I believe you are referring to Medicare Part D (Prescription Drug coverage) when you say Medicare "Part C" because Medicare Part C is private coverage for Medicare like a Medicare Advantage plan AND it is against the law for an insurer to sell you a Medicare Supplemental Plan (Medigap plan, you said you had Plan G) if you have your benefits under a Medicare Advantage plan.

So just verify that you are talking about Part D (Prescription Drug coverage) and NOT Part C.

If the above is correct - then you need to proceed only after you understand the employer plan.  There are specific rules about dropping these Medicare Parts and then picking them up again when you leave the employer.  If you do not do it right, there are specific premium penalties that last forever that could apply.

So BEFORE you take action to discontinue Part B and Part D because you may not want to:

It’s important to understand how your employer coverage works with Medicare before making any decisions. If you have questions about how Medicare and employer insurance work together, the best source of information is your benefits administrator, insurer, or plan. provider.

So the 1st thing you need to do is find out about the employer plan -

The size of the employer determines whether you should keep or not all parts of Medicare and sometimes determines whether you may have to pay a penalty if you (re)enroll later.

IF the employer has FEWER than 20 employees.

 You may have to keep both Part A and Part B & D under this type of employer plan.  In this case, Medicare would be your primary payer and the employer coverage is your secondary coverage.  When you have Medicare and other health insurance or coverage, each type of coverage is called a "payer." When there's more than one payer, coordination of benefits rules decide which one pays first. The "primary payer" pays what it owes on your bills first, and then sends the rest to the "secondary payer" to pay. In some cases, there may also be a third payer.

IF the employer has 20 OR MORE employees.

Ask the benefits manager whether you have group health plan coverage (as defined by the IRS). People with group health coverage based on current employment may be able to delay both Part A and Part B / D and won’t have to pay a lifetime late enrollment penalty if they enroll later.  Under a larger employer plan, Medicare would become a secondary payer normally.

After you understand how the employer coverage works with Medicare, and you decide to stop your Medicare Part B, there is a specific form, supposed counseling by Medicare and procedure to do so.

To dis-enroll, you’re required to submit a form (CMS-1763) that must be completed either during a personal interview at a Social Security office or on the phone with a Social Security representative. For an interview, call the Social Security Administration at 1-800-772-1213, or your local office.

Medicare insists on an interview to make sure you know the consequences of dropping out of Part B—for example, that you might have to pay a late penalty if you want to re-enroll in the program in the future. However, this is not a problem if you’re leaving Part B to enroll in primary health insurance from an employer. In the event that you lose this insurance in the future, you won’t incur a late penalty as long as you sign up for Part B again within eight months of retiring or otherwise stopping work.

Here are some links which go over what I said above:

https://www.medicare.gov/sign-up-change-plans/get-parts-a-and-b/employer-coverage/i-have-employer-co...

https://www.medicare.gov/sign-up-change-plans/get-parts-a-and-b/should-you-get-part-b/should-i-get-p...

https://www.medicare.gov/supplement-other-insurance/how-medicare-works-with-other-insurance/how-medi...

https://www.aarp.org/health/medicare-insurance/info-05-2008/ask_ms__medicare_5.html

https://www.medicarerights.org/PartB-Enrollment-Toolkit/Medicare-and-Employer-Based-Insurance-The-Ba...

You could just get a policy for your wife and kid on the individual marketplace, either on or off the exchange depending on the family income and whether or not a premium subsidy is applicable.

[MarkS934520]

Thank you SO much, and yes I should have said Part D (prescription coverage).  The employer is a large one with thousands of employees, so I do imagine the latter scenario is likely.  I will be sure to talk to an HR specialist who is certain of the correct answer, and then I would go to an SSA office.

[GailL1]

You are welcome but I forgot to answer your question about the Medicare supplemental plan (Medigap).

If you do drop it, I am not quite sure how this will affect you -

Normally, a person that has an employer plan (large employer) that pays 1st would have no problem because they would have guaranteed issue right to pick up a policy when they lose employer coverage and pick up Medicare parts and a Medigap plan.

However, since you have already used your initial buy-in period - I am not sure if your re-enrollment would be considered under the guaranteed issue rights. 

Personally, on this, I would check with your States Health Insurance Program (SHIP) [see the bottom of the linked Medicare page for contact info] IF they are knowledgeable - but a better place to check, to me, would be an independent Medicare Insurance broker in your area and tell them you just need a question answered about this.. 

Either way, you might not be able to get Plan G back -  I don't know - only specific ones are offered outside of the initial enrollment period -

read this Medicare page and notice the area that applies to your situation or your situation as it will be -

https://www.medicare.gov/supplement-other-insurance/when-can-i-buy-medigap/guaranteed-issue-rights-s...