If you have an inadequate health insurance plan or you have changed your situation and need new insurance, now’s the time to go out on the exchange and look around. Open enrollment is from November 1st to December 15th. Today’s NY Times has an in-depth discussion of what’s out there. Take a look also at this very recent NY Daily News article.
The American health insurance system is a frustrating tangle which is hard to navigate and requires a lot of time to deal with, from selecting policies to figuring out how to afford insurance to changing prescription plans based on their formularies to coping with absurd denials of coverage for drugs or treatment that the patient’s doctor recommends. Unbelievable amounts of hours are spent by patients and their advocates every year, often during their workday when those hours might be better spent getting the work done. Before the affordable care act, our small-company plan’s premiums were rising by double digits every year. The ACA was designed to greatly broaden the pool of healthy, premium-paying plan participants as a way to bring those premiums down. With the rollbacks of certain protections that were built into the Affordable Care Act (“Obamacare”), in the free-market economy, that critical aspect of the program has been removed, and companies are allowed to offer policies that provide minimal coverage and are still costly to pay for. People are spending as much on their insurance as they are on housing. It’s absurd.
I’d like to see a system where coverage isn’t linked to employment and instead is just based on something simple, like geography … for example, everyone who resides in a county which has population in excess of X people enrolls in that county’s plan, and very small counties just combine into a regional plan of an adequate and defined size. You’d only have to change plans if you moved out of county. No more worries that your smaller employer won’t have an insurance plan. Let the insurance companies compete behind the scenes to be the plan administrator. Have all practitioners in a given county accept that insurance plan as well as others. Let the plans negotiate drug prices or treatment prices like the Veterans Administration does (for drugs) or Medicare (treatment). Control the price of premiums and subsidize premiums through tax returns (as is done under the ACA) so that no participant has to pay more than a certain nation-wide percentage of their modified adjusted gross income. It’s absurd that an employee in a company which has a health plan should have to pay $12,000 a year for their share of the premium to have coverage for their family. The cost of insurance may not make too big of a dent in the budget of someone earning $180,000 a year, but the premium cost is the same for the person earning $60,000 a year.
By the way, if you are at that age to enroll in Medicare (65), keep an eye on your deadlines as well, and be sure to be mindful of the potential lifetime penalties for failure to enroll in Part B when you sign up, even if you are still employed.
For advice and representation on senior care legal planning, call us at 732-382-6070
Just recently someone asked me why she was being permanently surcharged on her Medicare Part B premiums. She had worked beyond age 65 When she stopped working, she then elected to pay for insurance continuation under COBRA. She started to receive her Social Security, and automatically began receiving Medicare Part A, but opted out of Medicare Part B until after her COBRA benefits ran out. When she applied for Part B, she learned the unhappy news that she has to pay a permanently higher Part B premium, because COBRA isn’t considered “creditable coverage” that enables a person to hold off on enrolling in Medicare without penalty.
Medicare is available as primary insurance for individuals over age 65 who have paid into the system for at least 40 calendar quarters. An eligible person will automatically be eligible to receive Medicare at age 65 if they are also eligible to receive Social Security. There is no premium for Medicare Part A, which is the benefit that pays for hospital care and post-hospital subacute, rehabilitation and home care. But there is a premium for Medicare Part B, which is the insurance that pays for out-patient services, doctors visits, etc.. It’s deducted from the Social Security check of those who are also collecting Social Security. What happens with Medicare Part B is that a person can elect not to receive it. If a person over 65 is still employed and has insurance through an employer, they may decide to save a few dollars and hold off on enrolling in Medicare Part B until they “need it.” That would typically be the point at which the individual has lost their employer-based insurance plan due to a separation from employment or retirement.
Section 1882(d) of the Social Security Act makes it unlawful for anyone to offer or sell a health insurance plan to a person who is entitled to Medicare Part A or is enrolled in Medicare Part B. Depending on your status with Medicare, you may or may not be able to purchase a different health insurance policy through the Marketplace. These issues particularly affect the baby boomer generation who are getting into their 60’s. What are these different statuses? You may be on Social Security Disability but still waiting the 2 years before you can receive Medicare; you may be on SS Disability and also receiving Medicare; you may be receiving SS early retirement at 62 but paying premiums for Medicare part A and B, or not paying premiums and having no insurance; you may be over 65 and eligible for Medicare but still employed with a company that provides primary group insurance; you may be retired & receiving Medicare benefits, but wish to purchase a stand-alone dental plan through the marketplace; you may want to purchase a marketplace dental plan along with a Qualified Health Plan (QHP) before you reach age 65 and start receiving Medicare. The possible scenarios are many, and timing is critically important. You need to understand these complex rules and the timing issues as well.
Some people may want to see if a marketplace policy would be cheaper — in terms of premiums or deductibles or copayments — than Medicare. Be careful! If you are currently receiving Social Security Retirement Benefits or Railroad Retirement Benefits and you are also receiving Medicare Part A (which is premium-free Medicare), you cannot drop the Medicare and enroll in a private plan without losing all your retirement benefits and paying back Medicare. It’s a minefield out there.
For advice on retirement planning including estates, trusts, insurance and benefits issues, call 732-382-6070