MONEY Medicare

Here’s What to Do When You’re Ready to Sign Up for Medicare

Just follow these three steps to get coverage.

You’ve probably heard that Medicare enrollment rules are complicated. And it’s true—knowing when to sign up, or even if you need to if you working at 65, takes some research. But the good news is that actually signing up for the benefit is a relative breeze.

To enroll, there are three key steps to follow. But before you do anything, be sure you know exactly what kinds of Medicare coverage you want. Part A (hospital insurance) is free to those who have worked long enough to also qualify for Social Security retirement benefits. You can also qualify for free Part A if your spouse qualifies for Social Security.

Medicare Part B covers expenses for doctors, equipment and other outpatient expenses. The Part B application form itself has only a dozen lines for things like your name, address, and Social Security number. Still, it is surrounded by four pages of explanation.

Together, Parts A and B constitute basic or “original” Medicare, which is the coverage choice for some 70% of Medicare beneficiaries. The other 30% opt for Medicare Advantage plans through private insurers. But they still need to sign up first for Parts A (automatic for most enrollees) and Part B. Now here’s how to enroll:

1. Start with Social Security. Medicare enrollment is administered by the Social Security Administration, which offers three options for signing up for basic Medicare. Given how important this is, my feeling is that it’s best to enroll in person. I suggest you make an appointment at your local Social Security office—don’t just drop in unannounced. You can call 1-800-772-1213 to schedule your visit. Make sure you check out the hours when the office is open.

If you choose not to take the in-person route, you can simply enroll by phone. Just call the number listed above. But be very clear that you want to sign up for Medicare only (assuming that’s the case.) The person on the other end of the line is there to handle applications for lots of Social Security benefits as well, not just Medicare. You don’t want to accidentally sign up for Social Security as well.

You can also sign up online, which Social Security has been encouraging people to do both for retirement benefits and Medicare. Their online application emphasizes that you need not visit an office. If you do opt for online enrollment, make sure you read this brief guide or view the video that explains how to sign up. The agency also provides a checklist of information you will need before signing up.

2. Take care of Medigap. Once you have basic Medicare in place, you’ll need to make decisions quickly on other forms of coverage. If you want a Medigap policy, which covers many things not covered by basic Medicare, you should sign up within six months of getting Part B coverage. During this period, you have what’s called a guaranteed issue right of being able to buy a policy regardless of any adverse existing health issues. You are protected from excessive premiums related to either your age or your age.

If you miss this window, however, all bets may be off. Insurance companies are not required to sell you these policies and can charge you much higher rates if they do. (There are special circumstances, such as losing access to a retiree health insurance policy, that will trigger a 63-day window during which your guaranteed rights are restored.)

3. Consider Medicare Advantage and Part D. If you want a Medicare Advantage plan or a Part D drug plan, their enrollment windows are the same as for Medicare Part B. You must first sign up for basic Medicare before contacting a private insurer for a Medicare Advantage Plan or a stand-alone Part D plan.

Signing up for Medicare would be even easier if the government made additional efforts to educate people about the process and alerted them to their possible upcoming enrollment windows.

Five U.S. House members recently sent a letter to the heads of the agencies responsible for Medicare, asking them to do just that. A spokeswoman for the group said their letter was based in part on a report last fall from the Center for Medicare Rights.

“No federal entity is currently responsible for notifying people nearing Medicare eligibility about the need to enroll if they are not already receiving Social Security benefits,” the report said. After 50 years in business, Medicare can do a lot better here.

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: When Good Investments Are Bad for Your Retirement Savings

MONEY Medicare

How to Time Your Medicare Enrollment

140603_FF_QA_Obamacare_illo_1
Robert A. Di Ieso, Jr.

Q: When should I sign up for Medicare?

A: Most pre-retirees know that Medicare coverage kicks in when you turn 65. But that’s not the whole story. If you want to enroll in Medicare without hassles and costly penalties, you need to know exactly when to sign up for the program you want. There are different enrollment periods, so it’s trickier than you might think. Many older Americans fail to sign up at the right time, which can lead to higher premiums or leave you with coverage gaps, studies have found.

First, though, there are exceptions to the age 65 sign-up date. You may still be covered by your employer’s health care plan, for example, or if you are eligible for Medicare due to a disability, you can sign up earlier.

Initial Enrollment Window: Medicare has established a seven-month Initial Enrollment Period, which includes the three months before you turn 65, your birthday month, and the three months afterward. This window applies to all forms of Medicare—Parts A (hospital), B (doctor and outpatient expenses), C (Medicare Advantage), and D (prescription drugs).

Medigap Enrollment: There is a separate six-month open enrollment period for Medicare Supplement policies (also called Medigap), which begins when you’ve turned 65 and are enrolled in Part B. During this period, insurers must sell you any Medigap policy they offer, and they can’t charge you more because of your age or health condition. This guaranteed access may be crucial because if you miss this window and try to buy a Medigap policy later, insurers may not be obligated to sell you a policy and may be able to charge you more money.

General Enrollment: If you missed enrolling in Part A or B during the Initial Enrollment Period, there is also a General Enrollment Period from January 1 through March 31 each year. Waiting until this period could, however, trigger lifetime premium surcharges for late Part B enrollment, which can end up costing you thousands of dollars. And your coverage won’t begin until July.

Part D drug coverage is not legally required. But if you don’t sign up for it when you first can, and later decide you want it, you will face potentially large premium surcharges. For example, if you missed enrolling during your initial enrollment period and then bought a policy, a premium surcharge would later take effect if you were without Part D coverage for 63 days.

Special Enrollment: There are lots of special conditions that can expand your penalty-free options for when you sign up for Medicare. And there also are what’s called Special Enrollment Periods for people who’ve moved, lost their employer group coverage or face other special circumstances. These special periods may have enrollment windows that differ in length from the standard ones.

Philip Moeller is an expert on retirement, aging, and health. He is co-author ofThe New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: How to Make Sure Medicare Really Covers Your Hospital Stay

 

MONEY Medicare

How to Avoid Losing Out on Medicare If You’re Still Working at 65

Older workers need to watch out for these Medicare enrollment mistakes.

For anyone who plans to keep working after they turn 65—and that’s a growing number of people—planning for Medicare can be complicated. Last week’s column discussed the dizzying array of enrollment periods and other sign-up timetables for people who turn 65 and sign up for Medicare. In this column, I’ll explain the tricky transition from employer insurance to Medicare.

Roughly a third of Americans aged 65 to 69 remain in the work force—a rate 50% higher than only a decade ago. So the adage that everyone must get Medicare when they turn 65 is not true for more and more older Americans.

If you continue to work and have employer group health insurance, you probably do not need to sign up for Medicare. Also, if you lose employer coverage and do get Medicare, and then get a new job with employer health coverage, you usually will not need to keep Medicare. This often surprises people who think they must remain covered by Medicare for the rest of their lives once they get it the first time.

That said, there are exceptions and caveats to that general rule. So to avoid potential stumbling blocks, consider these three key guidelines:

Small business workers may need to sign up. If you’re about to turn 65, and you work for an employer with fewer than 20 workers, yes, you probably need to sign up. In these small-employer plans, Medicare becomes what’s called the primary payer of covered insurance claims for employees 65 and older. Your employer plan is the secondary payer.

If you fail to enroll, Medicare can deny you primary health insurance for many months. And when you finally do sign up, you often face premium surcharges that will last the rest of your life, which could cost you thousands of dollars. As a I mentioned last week, the initial enrollment window for Medicare lasts for seven months—three months before turning 65, the month you turn 65, and three months after your birthday month.

Check your employer’s Part D plan. For people working for larger employers, you don’t face this enrollment rule. However—and there are almost always howevers when it comes to Medicare—there’s a technical requirement for avoiding Medicare coverage, which could be a potential stumbling block to coverage.

Medicare requires that a person’s employer drug coverage be “creditable”—meaning that it must be at least as good as a Medicare Part D prescription drug plan. If that’s not the case, the person would need to sign up for a Part D plan. If you don’t, you will face lifetime premium surcharges for failing to do so on a timely basis.

How likely is it that your drug coverage would not be credible? Honestly, I have never gotten a reader question or spoken to anyone whose employer drug coverage was found to fall short. But if it did, the employee likely would not know until it was too late. Since it is a rule, employees approaching 65 should get confirmation from their human resource manager that your drug coverage passes this test.

Consider signing up for Part A anyway. Even if you do not need to enroll for Medicare at age 65, you should probably sign up for Medicare Part A, which covers hospital expenses and short-term stays in nursing homes. Part A premiums are waived for people whose work records qualify them for Social Security. Normally, this requires working 40 quarters in jobs where Social Security payroll taxes are paid.

Medicare Part A is a secondary payer in this scenario, which means it can help out with expenses not covered by employer group insurance. It does carry a steep-sounding deductible of $1,260 for each covered stay. But the cost of even brief hospital stays easily can soar to many multiples of this deductible, making Part A a nice benefit to have.

Signing up for Part A does have a big downside. By doing so, you will no longer be eligible to contribute to a tax-advantaged health savings account (HSA). If you have an HSA now, you will need to compare the potential benefit of Part A coverage with the loss of your ability to contribute to the account. If you choose to give up contributing to your HSA, however, you will still keep any accumulated funds for as long as you wish. And that money won’t be taxed if you spend it on qualified medical expenses.

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: This Is the Biggest Mistake People Make When Signing Up for Medicare

MONEY Medicare

Virtual Doctor’s Visits Are Rare for Seniors on Medicare

telemarketer headset with stethoscope
Chuck Pefley—Alamy

Fewer than 1% of Medicare beneficiaries consult with their doctors online.

Donna Miles didn’t feel like getting dressed and driving to her physician’s office or to a retailer’s health clinic near her Cincinnati home.

For several days, she had thought she had thrush, a mouth infection that made her tongue sore and discolored with raised white spots. When Miles, 68, awoke on a wintry February morning and the pain had not subsided, she decided to see a doctor. So she turned on her computer and logged on to www.livehealth.com, a service offered by her Medicare Advantage plan, Anthem BlueCross BlueShield of Ohio. She spoke to a physician, who used her computer’s camera to peer into her mouth and who then sent a prescription to her pharmacy.

“This was so easy,” Miles said.

For Medicare patients, it’s also incredibly rare.

Nearly 20 years after such videoconferencing technology has been available for health services, fewer than 1 percent of Medicare beneficiaries use it. Anthem and a University of Pittsburgh Medical Center health plan in western Pennsylvania are the only two Medicare Advantage insurers offering the virtual visits, and the traditional Medicare program has tightly limited telemedicine payments to certain rural areas. And even there, the beneficiary must already be at a clinic, a rule that often defeats the goal of making care more convenient.

Congress has maintained such restrictions out of concern that the service might increase Medicare expenses. The Congressional Budget Office and other analysts have said giving seniors access to doctors online will encourage them to use more services, not replace costly visits to emergency rooms and urgent care centers.

In 2012, the latest year for which data are available, Medicare paid about $5 million for telemedicine services — barely a blip compared with the program’s total spending of $466 billion, according to a study in the journal Telemedicine.

“The very advantage of telehealth, its ability to make care convenient, is also potentially its Achilles’ heel,” Ateev Mehrotra, a Rand Corp. analyst, told a House Energy and Commerce subcommittee last year. “Telehealth may be ‘too convenient.’ ”

But the telemedicine industry says letting more beneficiaries get care online would reduce doctor visits and emergency care. Industry officials as well as the American Medical Association, the American Hospital Association and other health experts say it’s time for Congress to expand use of telemedicine in Medicare.

Popular Outside Medicare

“There is no question that telemedicine is going to be an increasingly important portal for doctors and other providers to stay connected with patients,” former Surgeon General Richard Carmona said in an interview.

Some health experts say it’s disappointing that most seniors can’t take advantage of the benefit that many of their children have.

“Medicare beneficiaries are paying a huge price” for not having this benefit, said Jay Wolfson, a professor of public health, medicine and pharmacy at the University of South Florida in Tampa. For example, he said, telemedicine could help seniors with follow-up appointments that might be missed because of transportation problems.

Aetna and UnitedHealthcare cover telemedicine services for members younger than 65, regardless of whether enrollees live in the city or in the country. About 37 percent of large employers said that they expect to offer their employees a telemedicine benefit this year, according to a survey last year by Towers Watson, an employee benefits firm. About 800,000 online medical consultations will be done in 2015, according to the American Telemedicine Association, a trade group.

Medicare’s tight lid on telemedicine is showing signs of changing. In addition to Medicare Advantage plans, several Medicare accountable care organizations, or ACOs — groups of doctors and hospitals that coordinate patient care for at least 5,000 enrollees — have begun using the service. Medicare Advantage plans have the option to offer telemedicine without the tight restrictions in the traditional Medicare program because they are paid a fixed amount by the federal government to care for seniors. As a result, Medicare is not directly paying for the telemedicine services; instead, the services are paid for through plan revenue.

Republicans and Democrats in Congress are also considering broadening the use of telemedicine; some of them tried unsuccessfully to add such provisions to the recent law that revamped Medicare doctor payment rules and to the House bill that seeks to streamline drug approvals.

‘Changing This Dynamic’

This year, Medicare expanded telemedicine coverage for mental health services and annual wellness visits — when done in certain rural areas and when the patient is at a doctor’s office or health clinic.

“Medicare . . . is still laboring under a number of limitations that disincentivize telemedicine use,” said Jonathan Neufeld, clinical director of the Upper Midwest Telehealth Resource Center, an Indiana-based consortium of organizations involved in telemedicine. “But ACOs and other alternative payment methods have the possibility of changing this dynamic.”

AARP wants Congress to allow all Medicare beneficiaries to have coverage for telemedicine services, said Andrew Scholnick, a senior legislative representative for the lobbying group. “We would like to see a broader use of this service,” he said. He stressed that AARP prefers that Medicare patients use telemedicine in conjunction with seeing their regular doctor.

The American Medical Association has endorsed congressional efforts to change Medicare’s policy on telemedicine, as has the American Academy of Family Physicians. “We see the potential for it . . . to improve quality and lower costs,” said Robert Wergin, president of the academy and a family doctor in Milford, Neb. He said such technology can help patients who are disabled or don’t have easy transportation to the doctor’s office.

Anthem, which provides its telemedicine option to about 350,000 Medicare Advantage members in 12 states, expects the system to improve care and make it more affordable. “It’s also about the consumer experience and giving consumers convenience to be able to be face to face with a doctor in less than 10 minutes, 365 days a year,” said John Jesser, an Anthem vice president. Anthem provides the service at no extra charge to its Medicare Advantage members.

While seniors are more likely to have more complicated health issues, telemedicine for them is no riskier than for younger patients, said Mia Finkelston, a family physician in Leonardtown, Md., who works with American Well, a firm that provides the technology behind Livehealth.com. That’s because the online doctors know when they can handle health issues and know when to advise people to seek an in-person visit or head to the emergency room, she said.

“Our intent is not to replace their primary care physician, but to augment their care,” she said.

Read next: How to Make Sure Medicare Really Covers Your Hospital Stay

Kaiser Health News (KHN) is a nonprofit national health policy news service.

MONEY Medicare

This Is the Biggest Mistake People Make When Signing Up for Medicare

calendar with pills on days
Alamy

To sign up for the right program at the right time, start marking your calendar now.

Most pre-retirees know that Medicare coverage kicks in when you turn 65. But that’s not the whole story. If you want to enroll in Medicare without hassles and costly penalties, you need to know exactly when to sign up for the program you want. There are different enrollment periods, so it’s trickier than you might think. Many older Americans fail to sign up at the right time, which can lead to higher premiums or leave you with coverage gaps, studies have found.

First, though, there are exceptions to the age 65 sign-up date. You may still be covered by your employer’s health care plan, for example, or if you are eligible for Medicare due to a disability, you can sign up earlier. In my column next week, I will discuss strategies for people who won’t be enrolling at 65. But this week we’ll focus on traditional sign-up rules. Now for a quick rundown of the five—yes, five—different enrollment periods for Medicare:

Initial Enrollment Window: Medicare has established a seven-month Initial Enrollment Period, which includes the three months before you turn 65, your birthday month, and the three months afterward. This window applies to all forms of Medicare—Parts A (hospital), B (doctor and outpatient expenses), C (Medicare Advantage), and D (prescription drugs).

Signing up for Medicare Advantage (MA), the managed health care version of Medicare, also requires you to have Parts A and B. You can drop your MA plan anytime within the succeeding 12 months and just use what’s called original or basic Medicare (Parts A and B).

Medigap Enrollment: There is a separate six-month open enrollment period for Medicare Supplement policies (also called Medigap), which begins when you’ve turned 65 and are enrolled in Part B. During this period, insurers must sell you any Medigap policy they offer, and they can’t charge you more because of your age or health condition. This guaranteed access may be crucial because if you miss this window and try to buy a Medigap policy later, insurers may not be obligated to sell you a policy and may be able to charge you more money. (Note: Medigap policies may not be sold to people with Medicare Advantage plans.)

General Enrollment: If you missed enrolling in Part A or B during the Initial Enrollment Period, there is also a General Enrollment Period from January 1 through March 31 each year. Waiting until this period could, however, trigger lifetime premium surcharges for late Part B enrollment, which can end up costing you thousands of dollars. And your coverage won’t begin until July.

If you enroll in Part B during the General Enrollment Period, there is another window—April 1 through June 30—during which you can sign up for a MA plan with or without Part D drug coverage. In most cases, coverage also will take effect July 1.

Part D drug coverage is not legally required. But if you don’t sign up for it when you first can, and later decide you want it, you will face potentially large premium surcharges. For example, if you missed enrolling during your initial enrollment period and then bought a policy, a premium surcharge would later take effect if you were without Part D coverage for 63 days.

Special Enrollment: There are lots of special conditions that can expand your penalty-free options for when you sign up for Medicare. And there also are what’s called Special Enrollment Periods for people who’ve moved, lost their employer group coverage or face other special circumstances. These special periods may have enrollment windows that differ in length from the standard ones.

Open Enrollment: If you already have Medicare, there is an Open Enrollment Period every year, when you can select new MA and drug plans, including moving back and forth between basic Medicare (Parts A and B) and MA. It runs from October 15 through December 7.

For those with MA plans, there is also a special MA disenrollment period from January 1 through February 14, when you can move back to basic Medicare and also get a Part D plan if you need one (most MA plans include Part D).

Don’t feel bad if you can’t keep track of so many different enrollment periods. Who could? The A, B, C, Ds of Medicare are confusing enough. Just keep track of this column. And consider using your computer or smartphone’s calendar to enter key Medicare enrollment dates as you approach your 65th birthday .

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: How to Make Sure Medicare Really Covers Your Hospital Stay

MONEY Health Care

How to Find the Best Hospitals

stethoscope heart
Jeffrey Hamilton—Getty Images

Think Yelp for the hospital-gown set.

Are the bathrooms clean? That’s just one of the many questions you’ll see answered on Medicare’s Hospital Compare website, a trove of information designed to help you select where to get medical care.

In April the site added its first-ever ratings of hospital stays based on patients’ assessments—think Yelp for the hospital-gown set. You can see ratings for a dozen aspects of the hospital experience, including cleanliness of rooms, nurses’ communication skills, and clarity of discharge instructions.

Drawing upon this and other data gathered by Medicare—ranging from timeliness of stroke care to possible overuse of MRIs and CT scans—you can make better decisions about what hospital to use the next time you need one, whether or not you’re on Medicare.

The information on Hospital Compare, however, can be overwhelming. Picking a hospital based on familiarity or convenience often trumps sifting through quality-of-care data—not necessarily a good thing, says Christina Boccuti, a Medicare expert at the Kaiser Family Foundation. Here’s a quick guide to using the site.

Cast a narrow net. Before you even start, call doctors you might work with to see what hospitals they use. Next, check with your health insurer to see whether these hospitals are in your network.

At Hospital Compare, you can study up to three area hospitals at a time. Focus on your own health needs among 10 major categories (surgical care or pregnancy and delivery, for example), general medical outcomes, the cost of care, and hospital “value”—costs relative to a patient’s well-being.

Money

Don’t sweat the small stuff. Surveys of patient experiences are summarized on a scale of one to five stars. Among hospitals, pay attention only if there’s at least a two-star difference, says Boccuti. Similarly, ignore small differences in ratings and outcomes. If 68% of one hospital’s patients say their pain was always well controlled, vs. 70% who say so elsewhere, that’s no big deal. Instead, look for large-magnitude differences across numerous measures.

Seek out volume. When you need an operation, a good rule of thumb is to go with the surgeon who’s done the procedure 600 times, not the one who’s on his sixth. Generally, the same rule holds true for comparing hospitals. So click on the rightmost tab, labeled “Number of Medicare Patients,” and look for the relevant condition or procedure. You’re probably better off picking a place that has treated hundreds of patients, not a handful. As is the case with all the data on Hospital Compare, you won’t get a definitive answer to the question “What hospital should I choose?” But you will be pointed in the right direction.

Philip Moeller, co-author of The New York Times bestseller, Get What’s Yours: The Secrets to Maxing Out Your Social Security, is working on a companion book about Medicare. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

MONEY Social Security

Why Social Security’s Advice Is Often Wrong

man with too large pants
Freudenthal Verhagen—Getty Images

Following even the agency’s most basic instructions may be a bad idea.

Social Security advice is always well-intentioned, usually helpful—and often wrong. That was one of the most eye-opening findings of doing two years of research on Get What’s Yours, the recent book on Social Security that I co-authored.

In trying to provide advice that is easily understood and applies to most people, the agency often glosses over complex program rules and claiming scenarios. Unfortunately, if people make bad claiming decisions as a result, they are the ones who pay the price, not some representative at a Social Security office or on the other end of the phone line in a huge call center.

Most recently, I came across this online advice in the frequently asked questions section of the Social Security website:

“How far in advance can I apply for Social Security retirement benefits?”

“You can apply for Social Security retirement benefits when you are at least 61 years and 9 months of age.

“You should apply three months before you want your benefits to start.

“Even if you are not ready to retire, you still should sign up for Medicare three months before your 65th birthday.”

On first glance, what could be wrong with these statements? After all, the earliest age at which retirement benefits begin is 62. So coming in three months earlier makes sense, right? And every Baby Boomer has known for a long time that Medicare, the federal health insurance program, begins at age 65. So what could be wrong with reminding people to sign up when they turn 65?

In fact, there are lots of Social Security benefits that do not start at age 62. Broadly defined, “Social Security retirement benefits” include all benefits provided by the agency, not just a worker’s own retirement benefits. Retirement and spousal benefits generally can’t be started younger than age 62. But survivor benefits may be taken as young as age 60.

Social Security Disability Insurance benefits can be triggered at any age for the disabled person. Disabled persons also can collect survivor benefits as young as age 50 if they are disabled and either their spouse or divorced spouse dies.

Waiting until 61 years and 9 months is thus not the right advice for everyone. Applying three months before you want benefits to start may be accurate but, as we’ve found, many people have no idea about the earliest age they may begin benefits. Often, they also have no idea of the latest or best age at which they should begin benefits.

Social Security does address many of these issues elsewhere, including providing an extensive questionnaire to help people know the various benefits to which they are entitled. But, of course, you have to know where to look. And if you have already made an ill-informed claiming decision, you won’t be motivated to even look.

Likewise, in the case of Medicare, following the agency’s advice can be very costly. To most people, signing up for Medicare at 65 means exactly that. Basic Medicare consists of Part A for hospital care and Part B for doctor and other outpatient expenses. Part A premiums are steep—more than $400 a month—but are waived for anyone who has paid Social Security payroll taxes for 40 or more quarters of work during their lifetime. The Part B monthly premium is $104.90 a month in 2015 for most people but can be a lot higher for big wage earners.

If people reach age 65 and continue to be covered by an employer group health insurance plan, they usually do not need to sign up for Medicare. (People covered by plans at small employers with 20 or fewer employees normally do need to sign up.)

What happens to people who do sign up, even though they have an employer plan? Usually, nothing. Either Medicare or their employer lets them know that they do not need Part B, so they save that premium. For a long time, however, people have been told to sign up for Part A anyway. Even if they never use it, it’s free, so what’s the harm?

Well, the harm is that signing up for Part A of Medicare prevents a person from participating in a health savings account, which is offered in increasingly popular high-deductible health plans. Most people are unaware of this rule. But once it’s been triggered, they not only can lose a valuable tax benefit but also face penalties for unintentionally continuing to participate in their HSA.

Social Security often explains its benefits in a “one size fits all” way. But this is not a one-size fits all program. It entails a complex mix of multiple benefits, claiming decisions, and penalties for not following the rules—rules that Social Security needs to do a much better job of explaining.

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

MONEY

6 Questions to Ask Before Switching to Medicare

140603_FF_QA_Obamacare_illo_1
Robert A. Di Ieso, Jr.

Knowing the answers will help you avoid costly mistakes and coverage gaps.

The hand-off from employer health insurance to Medicare can be one of the trickiest challenges you will face in managing your retirement.

The rules are full of pitfalls that can cost you thousands of dollars in unnecessary premiums or lead to a risky gap in coverage.

Here are the six most frequent questions I get about the work-to-Medicare transition:

1. Is the Medicare enrollment process automatic?

A: Only if you have already claimed Social Security benefits by the time you turn 65, which is the Medicare eligibility age.

If not, Medicare requires you to sign up in a seven-month window before and after your 65th birthday, unless you have employer coverage or through your spouse.

Failing to sign up when required is costly. Monthly Part B premiums, which cover doctor visits and medical supplies, jump 10 percent – lifetime – for each full 12-month period that you should have been enrolled. Penalties also are applied for late enrollment in Part D (prescription drugs).

If you retire after 65, you can take advantage of an eight-month special enrollment period that begins the month after employment ends.

2. Should I enroll in Medicare even if I am offered COBRA health insurance when I leave my job?

A: Yes. Although you might need COBRA to cover a spouse or dependent child, Medicare must be your primary insurance coverage once you are over age 65.

“People often miss that memo and find out about the consequences in a nasty way,” says Katy Votava, president of Goodcare.com, which advises consumers on health plan selection.

Besides leading to penalties, missing the special enrollment window could mean going with nothing but COBRA, which provides limited coverage to retirees, until the next enrollment period, which could be a year away.

3. What if I am still working when I turn 65?

A: If your employer has fewer than 20 insurance-eligible workers, Medicare will be your primary coverage, so go ahead and enroll.

You can stick with your employer’s coverage and forestall Medicare enrollment if your employer has 20 or more insurance-eligible workers. The insurance must be similar to Medicare benefits as measured by a set of standards set by the program.

You also could enroll in Medicare, which would provide secondary coverage to fill gaps in your employer’s plan.

One caveat: Do not enroll if you contribute to a Health Savings Account linked to a high-deductible employer plan. You are prohibited from making further contributions to the HSA once enrolled in Medicare.

4. What if I want to execute a file-and-suspend strategy for Social Security? Could I contribute to an HSA in that situation?

A: No. Claiming Social Security benefits automatically triggers enrollment in Medicare Part A, which covers hospital and nursing home stays. That would still be true if you file and suspend your benefits while still working and participating in a high-deductible employer health insurance plan.

5. Do I sign up for Medicare when I retire if my former employer provides a retiree health benefit?

A: Even if your former employer offers a retiree health benefit, it is important to sign up for Medicare at age 65 to avoid penalties and coverage gaps. Employer-provided benefits usually provide a secondary layer of coverage – often covering co-pays or providing a drug benefit.

The key to coordinating the two insurance plans: “Understand who pays first,” says Votava.

But Votava says retirees should compare the cost of retiree coverage with what is available on the open Medicare market. “I often see people holding on to retiree coverage when it’s not the best value for them.”

This is especially true for with supplemental plans that cap out-of-pocket costs, either Medigap or Medicare Advantage. “I’ve had clients find much less expensive Medigap or Medicare Advantage policies with equal or better coverage,” Votava says.

6. What if I retire, enroll in Medicare and then go back into a full-time job?

A: If your new employer provides health insurance, you can drop Medicare and re-enroll when you finally retire without paying late enrollment penalties.

Call the Social Security Administration (1-800-772-1213), which will send a form to sign that creates a record of what you are doing. The paper trail is important because it helps you avoid late enrollment penalties when you return to Medicare.

MONEY Health Care

What Happens When Your Doctor Leaves Your Health Plan

140603_FF_QA_Obamacare_illo_1
Robert A. Di Ieso, Jr.

Q. My doctor is leaving my provider network in the middle of the year. Does that unexpected change mean I can switch to a new plan?

A. Some life changes entitle you to switch plans outside your health plan’s regular annual open enrollment period—losing your on-the-job coverage is one example—but losing access to your doctor generally doesn’t qualify.

There are some exceptions, however. Several states have “continuity of care” laws that allow people to keep seeing a specific doctor after the physician leaves a provider network if they’re undergoing treatment for a serious medical condition, have a terminal illness or are pregnant, among other things. How long a patient is allowed to continue to see that doctor varies by state. It may be 90 days or for the duration of treatment or the end of a pregnancy, for example.

State continuity of care laws don’t apply to self-funded plans that pay their employees’ claims directly.

Some seniors in private Medicare Advantage plans may also be allowed to change plans midyear if their physicians or other providers leave their current network, according to rules that went into effect this year.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

TIME mike huckabee

Huckabee Aims for Seniors with Social Security Pitch in Florida

GOP presidential contender Mike Huckabee delivers a defense of Social Security benefits during Florida Gov. Rick Scott's Economic Growth Summit on Tuesday, June 2, 2015, at the Yacht & Beach Club Convention Center at Walt Disney World in Lake Buena Vista, Fla.
Orlando Sentinel via Getty Images GOP presidential contender Mike Huckabee delivers a defense of Social Security benefits during Florida Gov. Rick Scott's Economic Growth Summit on Tuesday, June 2, 2015, at the Yacht & Beach Club Convention Center at Walt Disney World in Lake Buena Vista, Fla.

Former Arkansas Gov. Mike Huckabee delivered a strong defense of government safety net programs for seniors at a candidate forum in Florida Tuesday, aiming for retired voters in a state rich with them.

While former Florida Gov. Jeb Bush and New Jersey Gov. Chris Christie have called for raising the retirement age and means-testing Social Security benefits, Huckabee called those proposals “absolutely ridiculous.”

“Unlike some in Washington who want to cut benefits for seniors, I will protect Social Security and Medicare. Period,” the former Fox News host said at the forum organized by sitting Florida Gov. Rick Scott. “These programs are not entitlements they are earned benefits. The government took that money from you involuntarily when you started working – with the promise that you’d get that money back when you retire. For the government to even think about breaking that promise is absolutely ridiculous.”

In April, Christie proposed a plan that would gradually raise the retirement age to 67 for Medicare and 69 for Social Security, while phasing out payments for those with retirement incomes over $200,000. In an interview with CBS’s Face the Nation Sunday, Bush called for a raising the retirement age and said he was open to means-testing.

“We need to look over the horizon and begin to phase in, over an extended period of time, going from 65 to 68 or 70,” Bush said. “And that, by itself, will help sustain the retirement system for anybody under the age of 40.”

In his speech, Huckabee also called for the importation of cheap pharmaceuticals from overseas in an effort to bring down costs.

“For too long, Floridians have been paying far too much for prescription drugs,” Huckabee said. “Americans should have the freedom to purchase safe drugs from Canada. In fact, doing so would save taxpayers $19 billion over 10 years. Re-importation also would create competition here in the United States and lower the cost of drugs for all Americans. It just makes sense. It’s wrong that people in foreign countries free-ride off of Americans who pay so much for the same drugs, especially seniors.”

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