By Paula Span
Oct.
26, 2018
Twenty years ago,
George Zeppenfeldt-Cestero left his job as a hospital administrator in New York
to open a one-person health care consulting firm.
Since he was losing
his employee medical coverage, he shopped around and bought a private health insurance
plan through Aetna.
It was expensive,
with premiums starting at about $1,000 a month, but “it paid for all my
doctors’ visits and my medications,” he said. “I was a satisfied consumer.”
But several years
ago, Aetna informed him that it was discontinuing that plan, sending him
scrambling for another insurer. That’s when, applying for coverage through the
state marketplace under the Affordable Care Act, Mr. Zeppenfeldt-Cestero
learned that he (and, he argues, Aetna) had made a serious error.
He should have signed
up for Medicare Part B three years earlier when he turned 65.
By delaying, he had
missed the best window — the so-called Initial Enrollment Period — to apply for
Part B, which covers much of what we consider health care: doctor visits,
tests, injectable drugs (including chemotherapy), ambulances, physical therapy
and other non-hospital services. As a result, he has to pay permanently higher
premiums, and he had to endure an unsettlingly long period — from December to
July — before the coverage actually kicked in.
“It was very
nerve-racking,” Mr. Zeppenfeldt-Cestero, now 71 and still working. “For six
months, I was without any coverage whatsoever.”
Such Part B mistakes
appear to happen with some frequency. Last year, nearly 700,000 Medicare
beneficiaries were paying Part B penalties, according to the Centers for
Medicare and Medicaid Services.
“It’s one of those
issues that has started to snowball,” said Fred Riccardi of the nonprofit Medicare Rights Center, which annually fields 20,000
Medicare-related questions on its helpline (800-333-4114) and three million
through its online tool Medicare
Interactive.
To simplify a complex
process, people are supposed to sign up for Part B when they turn 65, unless
they are working and have coverage through an employer, or a working spouse’s
employer.
Yet as people
approach age 65, Mr. Riccardi pointed out, “there’s no notice that says, ‘It’s
time to enroll in Medicare and if you don’t, you could have problems.’”
One factor underlying
the confusion, experts say, is the decoupling of Medicare eligibility from the
Social Security full retirement age. Both threshold ages used to be 65 but
now, the full Social Security
retirement age has passed 66 and will gradually rise to 67.
“It’s all become far
more complicated than it used to be when people turned 65, got their Social
Security, got their Medicare, and that was that,” said Patricia Neuman,
director of the Kaiser Family Foundation
Program on Medicare Policy.
Enrollment in
Medicare Part A, which covers hospitalization and requires no premiums for most
beneficiaries, occurs automatically at age 65 if you’re drawing Social Security
retirement benefits. You have to take steps to enroll if you delay taking
Social Security past age 65.
If you’re not yet
receiving Social Security benefits, you also have to sign up for Part B, which
this year costs $134 a month, more for individuals with incomes over $85,000 a
year. The question is when to enroll.
Bear with me as I try
to clear a path through the thicket, keeping in mind that I’m talking about
Medicare based on age. Younger people with certain disabilities, also insurable
through Medicare, contend with different rules.
You have seven months
— the month in which you turn 65 and the three months both before and after it
— to apply for Part B without penalty. You can
apply online at https://www.medicare.gov/sign-up-change-plans/how-do-i-get-parts-a-b or
at a Social Security office.
If you’re still
employed and working at a company or organization with 20 or more employees (or
your spouse is), and you’re covered by an employee health plan, you may not
need Part B yet. Instead of paying premiums, it could make financial sense to
hold off. But it’s important to know that after losing employee coverage — due
to retirement, layoffs or any other reason — you have an eight-month “special
enrollment period” to sign up for Part B.
If you miss that
window, you have to wait for the general enrollment period, which runs from
January 1 through March 31 each year. That creates two problems.
First, Medicare will
add a permanent 10 percent penalty to your premiums for each year you delayed.
Mr. Zeppenfeldt-Cestero has to pay $187.60 per month now because he waited more
than three years to sign up. If he had enrolled when he was 65, his monthly
premium would be $134.
“Without good
information, people make mistakes and they’re costly,” Dr. Neuman said. “In
this case, it’s a cost that continues the rest of your life.”
The second problem:
the general enrollment period imposes coverage gaps.
The general
enrollment period (not to be confused with the Open Enrollment Period currently
underway when those already receiving Medicare can change plans) runs from
January through March, remember. But coverage doesn’t begin until the following
July 1.
If you didn’t sign up
for Part B and recognize your error in March, you can be insured in July. If
you figure it out in April, however, you can’t enroll until the following
January and coverage begins the following July.
“It could be well
over a year, depending on when you discover the problem,” said David Lipschutz,
senior policy lawyer at the Center
for Medicare Advocacy. “Unfortunately, some people discover it when
they get sick.”
What causes this
predicament? Working seniors may be getting bad information from human
resources departments, benefits counselors or insurance brokers. They may be
relying on a COBRA plan, in which case Medicare should become their primary
insurer at 65.
Or they may have
transitioned from employee coverage to a retiree plan. Then, too, Medicare
should become their primary insurer, with the other plan the secondary insurer.
“Their retiree
coverage looks just the same as when they were working,” Mr. Lipschutz said.
“But in Medicare’s eyes, everything changes when you retire.”
An insurance company
that belatedly learns it’s been paying your medical bills, when Medicare should
have been your primary insurer, may try to recoup what it spent.
Because this process
involves many exceptions and caveats (if you’re a federal employee, say), and
remedies for a few people, there’s no substitute for consulting with an expert
as you near 65. “You need to investigate,” Mr. Lipschutz advised.
Given the risks of
misinformation from employers, that probably means talking to Social Security
by phone or in person, documenting all your conversations with dates and names.
“Very educated,
astute folks get caught in this trap,” Mr. Lipschutz said. “They’re not
scofflaws. They tried to play by the rules.”
A legislative attempt
to fix the mess, the
BENES Act (for Beneficiary Enrollment Notification and Eligibility
Simplification), would send notices to those approaching age 65,
clearly explaining Part B enrollment. The bill has made little headway, despite
bipartisan support, but advocates hope it will gain traction after the midterm
elections.
Mr.
Zeppenfeldt-Cestero has full Medicare coverage now, plus a supplemental Medigap
policy. But he’s still angry about what he calls “my nightmare.”
Over several months,
“I spoke to every advocacy and oversight agency out there to try to get this
resolved in my favor,” he said. He called Social Security and the Centers for
Medicare and Medicaid. He tried his senator’s office.
“They all said,
‘You’re out of luck.’”
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A
version of this article appears in print on Oct. 29, 2018, on
Page D5 of the New York edition with the headline: Why You
Shouldn’t Wait to Sign Up for Medicare Part B.
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