Nebraska Department of Insurance
THE NEBRASKA HEALTH INSURANCE INFORMATION, COUNSELING, AND ASSISTANCE (NICA) PROGRAM
DECEMBER 2003 NICA NEWS
QUESTIONS AND ANSWERS
Q. The premiums for my retiree insurance are going up significantly in the new year, and I don't know if I can continue to afford it. What happens if I drop my retiree insurance? Can I get it back if I decide I want it again?A. If you drop your retiree coverage, Medicare will remain your primary insurer and you will be responsible for the health costs that your retiree plan picked up. For instance, if your retiree plan paid the 20 percent coinsurance for Part B services, such as doctors' visits, you will now have to pay for it yourself. Many retiree plans offer prescription drug coverage that is better than any coverage you could get on your own. Before you drop your retiree plan, be sure to evaluate your options and find out from your former employer if you can get it back. Most employers do not allow you to pick up your retiree plan after dropping it.
If you do drop your retiree coverage, you may want to buy insurance to fill the gaps in your Medicare coverage. If you drop your retiree plan by choice and you have had Part B for more than 6 months, there is no guarantee you will be able to purchase a Medicare supplement policy. You will need to apply for a policy and the company can consider your health history. You may need to consider a policy sold on a Guarantee Issue basis, which means they are sold to every applicant, regardless of health history, but the premium can be higher.
If you end up needing only a small number of health care services over the year-and that of course is impossible to predict-you may be able to save money if you enroll in a Medicare + Choice plan such as an HMO, PPO, or a private fee-for-service (PFFS) plan, which must provide all benefits provided by Medicare. If it chooses to, a private plan can provide additional benefits, such as dental and vision coverage, which Medicare does not cover. Private plans often charge a premium in addition to the Medicare Part B premium and generally charge a fixed copayment amount whenever you receive a service.
If you have a low income and limited assets, you may also want to look into your eligibility to have some or all of your health care and premium costs paid for by the Medicaid program. (Manual Sections K, F, I)
Q. If a person begins receiving Social Security Disability benefits and has been diagnosed with Amyotrophic Lateral Sclerosis (ALS), when is he/she Medicare eligible?
A. It is the general rule that persons certified by Social Security as disabled for the purpose of receiving benefits must wait 24 months after eligibility to receive SSDI to qualify for Medicare benefits. Congress enacted legislation that waives the 24-month waiting period for those recipients that have been diagnosed with Amyotrophic Lateral Sclerosis (ALS). Therefore, people with ALS - commonly referred to as Lou Gehrig's disease - qualify for Medicare on the month they become entitled to disability benefits. (Manual Section C)
Q. My client is 68 and his wife is turning 65. She was a teacher and retired at age 62. The school system health insurance covered both of them until she turned 65. Now they are shopping for a Medicare Supplement. He was 65 at the time of her retirement and was told by the school system that he could stay on her plan and did not need to sign up for Medicare Part B until she lost her employer insurance at 65. Was that good counsel?
A. No. It is critical that clients understand that enrollment in Part B can only be delayed without penalty when one of the spouses has employer health insurance and is actively employed. He can now enroll in Part B, but because he did not enroll in Part B during his Initial Enrollment Period when he turned 65, he will have to pay a penalty for every 12 full months enrollment was delayed. (Manual Section C & Section K)