HELP LINE: How to avoid the Medicare penalty

DESPITE A LOT of good advice to the contrary, almost all of us seem to be getting older on a daily basis. Thus, many of us are encountering Medicare for the first time on a daily basis — literally.

One of the things that happens to me, on an almost daily basis due to the fact that I’ve made some crack about some facet of Medicare in some column, is that I get several dozen emails to the effect of “Huh?”

Because a lot of us are turning 65 and Medicare is (to phrase it politely) a mystery, I’m going to back up and do the whole thing.

Ready? Get comfortable.

I tend to think of Medicare as the “Rube Goldberg approach to health insurance.”

Thus, it’s easy to get myopically focused on this or that moving part, or how this made that fall over, which made this other one stand up, which caused this one over here to roll over and play dead.

And, in the course of that, completely lose track of what the whole machine looks like and what we actually have to do in order to inject ourselves into the “The Machine” because, like it or not, for many of us, it’s the only game in town.

This is not “Hooray for Medicare.”

Required to deal with it

We are not required to like it, or to think it represents a stunningly insightful or logical method of health care (or health insurance) delivery, but many, many, many of us are required to deal with it.

Here’s another non-surprise: The baby boomers (“Silver Tsunami,” whatever) are bumping up against the Medicare machine.

These folks were born between 1946 and 1964. There are 47 million people on Medicare now, and with the boomers, that will spike to 80 million by 2030, which is only 13 years away.

Further, one in 10 boomers are living below the federal poverty line, so there’s an increasing trend for many of us to keep working past age 65, and “full retirement age” is, for the moment, 66.

So what? Well, that means that an awful lot of people whose primary knowledge of Medicare consisted of “My parents have it” need to understand how to access this Medicare machine and how to understand it.

More or less, most of the time, so here we go.

If you ‘get’ it, stop reading

If you already “get” everything there is to know about Medicare, this is going to be pretty boring, so please occupy yourselves by emailing me your name and phone number so we can start referring folks to you for help — I’m serious.

No? OK, then read on and just write off the next few minutes to “humoring Harvey.”

And for the true wonks among us, I am not going to attempt to cover every detail and nuance of the Medicare machine that could possibly touch anyone under any circumstances ever, because that doesn’t help most people. Agreed? OK.

In the beginning, there was Medicare. Medicare is health insurance.

Two ways to qualify

There are generally two ways to qualify for Medicare: You turn 65 or you hit month No. 24 of Social Security Disability Insurance (SSDI).

If you turn 65 and receive Social Security benefits, you will be auto-enrolled in Medicare Part A (think “hospital”) and Medicare Part B (think “doctor”).

You will receive by mail a “Welcome to Medicare” kit, which borders on being self-explanatory. Well, more or less mostly if you actually read it.

Then read it again.

If you are younger than age 65 and on SSDI, you will be auto-enrolled in Medicare Parts A and B during month 23, which puts you on the cusp of the 24-month qualifying period.

As previously noted, the “full retirement age” (meaning the age at which you get to scoop up your full Social Security benefit, remembering you can get more if you work more) is now 66.

Have to sign up

Thus, if you turn 65, are still working and are not receiving Social Security benefits, you have to sign up for Medicare.

You sign up for Medicare by contacting Social Security — I know, but that’s how it’s done. You can also do that online, but let’s don’t get distracted by practicality.

If you are still working and get health insurance through your employer, you might choose to delay enrolling in Part B.

Why? Well, for openers, Part B costs you money, so why pay for something you don’t need yet?

However, there is a pricey, lifelong penalty for not enrolling in Part B when you’re eligible, so you want to get this right (stay with me).

Also, “getting it right” will allow you to retain your “open enrollment period” for a Medigap plan. I know — don’t panic.

As shocking as it might be, Medicare does not pay for all of your health insurance stuff.

Actually, it only pays 80 percent of the Medicare-approved cost of the stuff it does cover.

Many people buy private plans from insurance companies to pay for all or most of what Medicare doesn’t pay for.

These are affectionately referred to as “Medigap” (aka “MedSUPP”) plans.

Open enrollment period

If you do everything “right,” you have an “open enrollment period” for Medigap plans, which means that any plan has to accept you, regardless of your pre-existing conditions or whatever else, whether they like it or not. Otherwise, they can make you fill out a health questionnaire that was developed during The Inquisition and then, in all probability, reject you. You do not want that to happen.

So, if, when you turn 65, you are still working (or your spouse is still working) for an employer with at least 20 or more full-time employees (I don’t know why and am well past caring) and you (or he or she) have health insurance through that employer, you can legitimately delay enrolling in Part B without incurring the dreaded penalty and will still have access to that lovely “open enrollment period” for Medigaps down the way.

If all of that is true and if you have the nerve to change to a different job where all of that is still true, get a letter from the employer that you’re leaving that states the length of time that you were enrolled in that employer’s health insurance.

Successfully evade The Penalty

You want this because it will prove that you can successfully evade The Penalty.

Put it someplace where you can actually find it.

If you retire from said employer (or quit or whatever) and go onto COBRA (Note: If you have no idea what that is, you probably don’t need to know — yet), sign up for Part B!

“COBRA coverage” is not considered “active” employer insurance, thus penalty.

To the tune of 10 percent per month for each year that you didn’t enroll in Part B for the rest of your Medicare-haunted life.

No, that’s not all, but that’s enough. For now.

More next week, and yes, if you followed all of this, you can take a day of respite from your dementia-inhibiting crossword puzzle …

… and two aspirin.

________

Mark Harvey is director of Clallam/Jefferson Senior Information & Assistance, which operates through the Olympic Area Agency on Aging. He is also a member of the Community Advocates for Rural Elders partnership. He can be reached at 360-452-3221 (Port Angeles-Sequim), 360-385-2552 (Jefferson County) or 360-374-9496 (West End), or by emailing harvemb@dshs.wa.gov.