Only weeks before turning 65, the man received his Medicare card for coverage that would start the first of day of his birth month. He made an appointment with a Senior Health Insurance Benefits Assistance (SHIBA) counselor to review Medicare Advantage insurance plans.
As he reviewed them, he saw that those with low or no cost typically would mean office co-pays of $40 to $50 to see a specialist. He said he was seeing specialists four and five times a month, which with Medicare Advantage insurance would mean monthly co-pays of $160 or more.
The counselor had also reviewed more-expensive Medigap supplemental insurance, so the fellow asked to see premium costs including that for the separate prescription drug insurance he would also need.
Although Medigap policies are more costly than most Medicare Advantage plans, he chose Medigap because he figured its premiums would be less than office co-pays with Medicare Advantage. With Medigap he would have monthly premiums totaling approximately $140 but would avoid doctor co-pays and costs for hospitalization, lab tests or other medical procedures.
To make an appointment with a SHIBA counselor, or to ask a question to be answered here, please see the end of this column.
Q: We’re retired, and plan extended travel abroad next year. We’re paying nearly $300 a month for Medicare’s Part B premium for the two of us. Because Medicare won’t help us outside of the U.S., we’d like to pause our Medicare while we travel. Can we do that?
You do have that option, yes, but you ought to consider the negative consequences. If you paused your Medicare and didn’t pay the premium, each of you would be subject to a lifetime late-enrollment penalty when you re-enroll. It’s a monthly penalty that amounts to 10 percent of the Part B premium (the premium is now $148.50) for each 12-month period that you don’t have Part B.
And you would face additional consequences: When you return to the U.S., you could re-enroll in Medicare Part B only between Jan. 1 and March 31, with coverage not starting until July 1. And you could enroll in Medicare Advantage or Medigap supplemental insurance only after your Part B was restored.
In some circumstances Americans living abroad can skip Medicare and avoid the late-enrollment penalty – if they have employer insurance abroad or are in the Peace Corps, for example. That doesn’t sound like your situation.
Q: I have a health savings account. I read your recommendation to enroll in Medicare Part A at age 65 even if you’re still working and have employer insurance. But I thought you couldn’t have an HSA after enrolling in Medicare.
You’re right. One is prohibited from contributing pre-tax dollars to a health savings account after enrolling in Medicare; in fact, HSA contributions should be stopped six months before enrolling.
After enrolling in Medicare, one may continue to withdraw from the HSA account, however. For more details, seek professional advice or consult a trusted website such as Medicareinteractive.org.
Q: You’ve written about guaranteed issue for Medigap supplemental insurance. What must occur for one to be eligible?
Guaranteed issue means the insurance company must sell a policy to the Medicare beneficiary and cannot charge a higher premium because of a pre-existing condition such as heart disease, diabetes or cancer, for example. At least 10 circumstances qualify one for guaranteed issue in Oregon, of which these are the most common:
*You are newly enrolled in Medicare Part B.
*You are enrolled in Medicare after 24 months of receiving disability benefits (this person will qualify again upon turning 65).
*You change Medigap plans or companies using Oregon’s birthday rule.
*You enrolled in a Medicare Advantage plan after you first enrolled in Medicare, and within the first 12 months of having the plan you want to leave it.
*As a result of a move, you lose the Medicare insurance you had in your former location.
To see the full list, obtain a digital copy of the Oregon Guide to Medicare Insurance Plans. Log on to healthcare.oregon.gov/shiba, and on the left side of the page click on 2021 Medicare Guide. See page 35.
Jim Sellers of Salem is a certified Medicare counselor with the Senior Health Insurance Benefits Assistance (SHIBA) program. To ask a question to be answered in this column, e-mail [email protected] To schedule a free SHIBA phone appointment with a volunteer Medicare counselor, call 800-722-4134.