Courtesy: Scarlet Chicken
The New Orleans resident, who is recovering from cancer, has been enrolled in Medicare Part A (hospital coverage) since 2018, when she reached the eligibility age of 65. Yet due to the way Medicare interacts with insurance through an employer – coverage it lost in August – Chicken is no longer allowed to enroll in Part B (outpatient care) before January.
That’s when a three-month enrollment window opens for recipients who didn’t enroll when they were supposed to. Even then, however, Part B coverage of Chicken wouldn’t begin until July due to Medicare rules – and she could face lifetime late enrollment penalties.
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“The rules around Medicare eligibility, especially when it comes to employer-sponsored coverage, are unnecessarily complicated, with fairly unfair results in some situations, like this,” said David Lipschutz, associate director and Senior Counsel for the Center for Medicare Advocacy. .
For most of the 63.3 million Medicare beneficiaries, long delays before coverage begins or late enrollment penalties are not typical. However, for people who have insurance elsewhere when they turn 65, mistakes in adhering to membership rules can be problematic at best and costly at worst.
A bill that authorized Congress last year, called the BENES Act, fixes the kind of seven-month lag that Poulet faces between Part B registration and its start date, but it doesn’t take effect. until 2023. At this point, coverage will begin the following month. one person signs up.
However, the legislation does not specifically address the issue that led to Poulet’s predicament.
What went wrong
The problem arose when Kujawa quit her job to care for Chicken – who was diagnosed with rare head and neck cancer in 2019 – and the couple remained on Kujawa’s insurance as permitted. Consolidated Omnibus Budget Reconciliation Act, or COBRA.
This law allows workers to stick to their health plan for up to 18 months (sometimes more) when they leave a company, although they must cover the full cost of the premiums instead of the participation of the employer.
“Unfortunately, under Medicare rules, everything changes once insurance isn’t tied to active employment,” Lipschutz said. “It’s confusing and trips up a lot of people. “
Unbeknownst to Chicken, at this point, she had an eight-month window to enroll in Part B under Medicare rules to avoid late enrollment penalties.
In 2019, about 764,000 people paid the late registration penalty for Part B, according to a congressional study. The penalty is 10% for every 12 months that an individual should have been enrolled in Part B but was not.
Without ambulatory care insurance, Chicken’s last cancer-related appointment cost $ 5,563 out of pocket. And that was after asking for financial relief from the original price of $ 7,974.
Poulet said his next step would be to seek “fair relief”. Essentially, this involves asking the Social Security Administration to allow them to enroll in Part B immediately and eliminate late enrollment penalties, although the request usually must involve proof that a government official has provided. inaccurate information which led to the error.
“I lost my insurance, I have cancer, the pandemic is getting worse and I am supposed to wait [July] to register? Chicken said. “It’s like they’re saying you didn’t sign up for Part B, so we’re going to graze you and shoot you.” “
The BENES Act – the law coming into force in 2023 that corrects certain delays in Medicare coverage – also authorizes the government to allow special Part B enrollment periods for “exceptional circumstances.” (This already exists for Part D prescription drug coverage and Part C benefit plans)
Advocates say that when people find themselves in Chicken’s situation – unable to register and / or face penalties – it is usually because they think they are doing the right thing and no one is telling them. contrary.
“It’s especially difficult in situations where people have paid premiums for other insurance, particularly under COBRA,” said Casey Schwarz, senior education and federal policy attorney at the Medicare Rights Center. .
“They say ‘clearly I wasn’t trying to play anything because I was paying more for the bonuses than I should have for Part B,” said Schwarz.
Chicken and Kujawa’s premiums under COBRA were $ 1,686 per month, compared to Medicare Part B’s standard premium of $ 148.50 per month ($ 170.10 next year).
A provision that has not been incorporated into the BENES Act but is supported by advocates would require the government to notify people approaching Medicare eligibility of the enrollment rules.
“The problem isn’t that COBRA coverage is available, it’s that there is no support for these transitions,” Schwarz said.