More than 10 million
of the 63.6 million people who received Social Security benefits last month are
disabled. For those under the age of 65, being approved for Social Security
Disability Income (SSDI) payments also includes eligibility for Medicare, usually
after a two-year wait.
Despite being
disabled, many SSDI recipients are able to work and thus become eligible for
employer insurance plans. The coverage offered by employer plans has become
more costly, leading many plans to adopt high annual deductibles that can raise
out-of-pocket costs for employees. These changes have made it much more likely
such employees will not drop Medicare but keep it in place, or in addition to
an employer plan.
Here’s an email from
Steve in Massachusetts that illustrates the issues and decisions that people
with disabilities may face if they return to work.
“I am 44 years old, blind, and have had Medicare for about 10
years because of my disability. I did go back to work full-time a few years ago
but have continued to pay for Medicare (Parts A and B). It is my only insurance
right now, but the out-of-pocket costs are getting expensive.
As a result, I have recently gotten health insurance from my
employer and I had planned to stop Medicare. I saw my doctor last week and told
him the situation. He recommended that I not stop my Medicare because he said
that it could be very hard to get it back, given that I am more than 20 years
away from retiring. He recommended that I keep Medicare and look for a
secondary insurance. I trust my doctor, but I do not think he is an insurance
expert by any means!”
One-size-fits-all
answers don’t work here. A person’s specific circumstances – age, health needs,
insurance plans, and the like – are all different. What they do share is the
need to understand how Medicare does and does not “work” with other insurance
programs. This is a big-enough deal at Medicare that the program has an
operations manual dedicated to what are called “coordination of care” rules.
Steve’s doctor
deserves praise for at least thinking of this issue. Most doctors know very
little about health insurance or the financial implications of their treatment.
But Steve is right to want a second opinion about what his doctor told him!
Medicare rules permit a disabled person to reacquire Medicare
coverage at any time prior to age 65.
Medicare rules permit
a disabled person to reacquire Medicare coverage at any time prior to age 65.
The issue here is whether, when the person re-enrolls, he would be subject to
substantial late-enrollment penalties because he did not have continuous Medicare
coverage.
For someone on
Medicare who is not disabled, getting employer insurance clearly permits them
to drop Medicare without encountering penalties upon re-enrollment. The same
should hold for those with disabilities. However, I’ve encountered many illogical
things about Social Security and Medicare, so I recommend that people contact
Social Security to confirm how the agency would treat them.
The issue about
whether to keep Medicare or not is on the hit parade of Ask Phil
questions. One of the most popular Ask Phil columns looked in
detail at these choices, and it remains the topic most frequently raised by readers.
Historically, most would have dropped Medicare in favor of solid and less
expensive employer insurance plans. But the rise of high-deductible health
plans has increased the appeal of having employer insurance and Medicare.
In nearly all cases,
the employer plan is the primary payer of covered claims and Medicare is what’s
called a “secondary” payer.
If a person has a
high-deductible plan with, for example, a $3,000 deductible, basic Medicare
(Parts A and B) can be used to pay claims in the deductible phase of the
coverage. Even with its monthly cost of $135.50 for most enrollees, Medicare
can make sense in some situations.
Beyond high
deductibles, Medicare also can help pay some of the covered expenses not fully
paid by an employer plan. Usually, it does not make sense to get a Medicare
Part D plan here or a Medigap supplemental plan. You would be paying for things
your employer plan already covers.
Before making this
decision, however, it’s important that anyone eligible for Medicare by virtue
of age or disability ask their employer to certify that the employer’s drug
coverage is at least as good as a typical Part D plan. If an employer plan does
not meet this “credibility” test, then the person must get Part D. Employers
are required to provide credibility statements annually.
One final point here
is that anyone in this situation who must get a Part D plan need not also pay
for Part B of Medicare, although they do need to sign up for premium-free Part
A.
I am pretty sure that
people with such options can get their coverage coordination questions answered
by talking with someone in their employer insurance benefits office. I am also
pretty sure, based on literally thousands of reader emails, that talking with
their insurer has a popularity rating akin to having a root canal without
anesthesia. Time and time again, the best advice I have is that people should
speak first to their health insurers, not to me.
No comments:
Post a Comment