Open Season - Medicare Questions & Answers

Friday - 10/25/2013, 4:39pm EDT

For Your Benefit - Oct. 28, 2013

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This week on For Your Benefit hosts Bob Leins and Tammy Flanagan spoke to David Santana, health insurance specialist for the Centers for Medicare & Medicaid Services, a federal agency.

Co-host Flanagan wrote the cover story for the November issue of the National Association of Retired Federal Employees magazine entitled "Choosing the Best Retirement Date."

Below are some of the questions Santana and Flanagan answered during the show.

What is the difference between the Medicare open enrollment, federal health benefit open season and the general enrollment for Medicare?

Santana: "One of the options people have in Medicare is to choose to have their Medicare benefits carried by a private health insurance plan. It's very similar to the [Federal Employees Health Benefits program]. They have HMOs, PPOs and all these options that we have in the FEHB. Individuals with Medicare have the option to have their health insurance through a private plans. Every year, the open enrollment period, which is Oct. 15 through Dec. 7, this is the opportunity individuals have to come and compare those plans that they had in the past year with how the plans are changing for next year.

"Also in Medicare, we have what we call a general enrollment period. This is for individuals who missed their initial enrollment period when they were around 65- years of age and over and did not enroll in Medicare at that time. They have from Jan. 1 through March 31 to go and enroll in Medicare. If they do it during that time, their effective day will be July 1 of the following year."

Why wouldn't someone enroll when they were 65?

Flanagan: "A couple of reasons why, number one is they might still be working and they have health insurance through their employer, so they wouldn't necessarily be enrolled in Medicare along with it, especially when it comes to federal employees because they're not required to enroll in Medicare. The other reason is that under the Federal Health Benefit Program, you can have FEHB even when you're retired and you can choose not to enroll in Medicare. So, sometimes people decide after the fact, after they've retired, after they've turned 65 that maybe at 70 they want to enroll in Medicare and that's when they'd use the general enrollment period to sign up for Part B and Part A."

Santana: "This is the part that we pay taxes to get, Medicare Part A; therefore, it's offered premium-free. This is the part that covered you when you go into the hospital and become an in-patient. … It's free for most people. We advise individuals, whether you're working or retired, when you turn 65, you should get Medicare Part A. If you're actively working, of course, your FEHB will be primary during that time. But, if there is something left over if you happen to be in the hospital, that claim could be sent to Medicare Part A and it could help you with some of the costs that are left over. ...

"The part in question is Medicare Part B. This is the part that you didn't pay anything to earn it. Everybody has to pay a premium. … Usually, you wouldn't get Medicare Part B while you're working because your FEHB remains your primary health insurance. You would get very little out of paying that Medicare Part B premium."

Flanagan: "Working and being covered by your employer's health plan is when Medicare is secondary to your federal health insurance. When you do retire, if you work past age 65 and you still have FEHB coverage, there's a special enrollment period."

Santana: "You can enroll in Medicare Part B at any point while you're working. So you had that ongoing special enrollment period that you pick that up at any time when you're working [past age 65]. Now, once you retired and that employer health insurance plan through employment ends, we give you eight months to think about whether Medicare Part B is a good option for you. … If you go on without enrolling in Medicare Part B on that eighth month, that's when the general enrollment period kicks in.

"The time frame that you have health insurance though your employer will not count against you and that leads me to talk about a little penalty or a big penalty that we have under Medicare Part B. The penalty is 10 percent for each 12 months that went by that you could have had Medicare Part B and you decided not to enroll. So, the penalty could grow over the years."