People With Medicare

Medicare Question of the Month

Each month, our expert showcases a Medicare question submitted by one of our readers. You may submit a question at any time and get a personal response.

This Month's Question:

I am 62 years old and my husband is 75 years old. We are both currently covered through my employer health insurance. That's why when he turned 65, he only signed up for Medicare Part A. My employment ends next month, and we are thinking about COBRA coverage for 18 months. My company does not have retiree health insurance. When should my husband sign-up for Part B?

Answer

COBRA is the federal law that allows certain people to continue their employer group health insurance once they are no longer actively employed by the company. COBRA protects dependents such as spouses too, when employer health insurance ends, for example because of a job loss, retirement, divorce, or death. People who get COBRA must pay the full cost, or premium, themselves; their company no longer helps with the premiums for their coverage.

Your husband has some decisions to make: He must decide when to take Part B, and whether to take COBRA. He can take both Part B and COBRA, although that can be expensive.

Your husband has 8 months after your employer health insurance ends to sign up for Part B without a penalty. And he should be sure to sign up within that time. And even if he and/or you decide to get COBRA, your husband should generally not wait until your COBRA ends to enroll in Part B.  This is because if he enrolls in Part B after the 8 months, he may have to pay a late-enrollment penalty for Part B.  

If he takes COBRA and enrolls in Part B, COBRA will pay secondary to his Medicare. This means Medicare will pay first, and then COBRA will pay.

Before deciding on COBRA coverage, your husband should consider his other health coverage options:

• He may want to consider Medigap supplement insurance instead of COBRA to supplement his Medicare Parts A and B. Medigap pays for some of the otherwise out-of-pocket costs in Medicare, such as deductibles and coinsurance. It may be the more affordable coverage option. He should shop around and buy a Medigap policy during the first 6 months after he takes his Part B. That way he can buy any Medigap policy offered for sale in your state. Learn more about Medigap.
• Once he has Medicare Part B in addition to Medicare Part A he might want to shop around and compare available Medicare Advantage options to Original Medicare. Learn more about Medicare Advantage.
• Regardless of whether he decides on Original Medicare or Medicare Advantage, he will need to decide about joining a Medicare drug plan. In general, if your COBRA will cover drugs, he can wait until his COBRA coverage ends to join a drug plan. If he decides not to take COBRA, and he chooses Original Medicare he will need to pick a Prescription Drug Plan (PDP). If he joins a Medicare Advantage plan he should be sure to pick one that includes Medicare Part D drug coverage. Learn more about Part D.
• COBRA coverage is generally expensive. If your husband has high medical and prescription costs, then COBRA may be a good option, especially if it offers creditable prescription drug coverage. This means it has drug coverage that is as good as Medicare. If so, your husband may want to get COBRA coverage, and delay enrolling in a Part D plan if the COBRA drug coverage is creditable. Learn more about creditable drug coverage.

Either way, it's usually a good idea to call your job's benefits administrator to find out more about your specific COBRA options.You will want to find out how much COBRA will cost, and what type of coverage it will provide.You will want to compare this with Medicare coverage, and perhaps a Medigap supplement policy.

To learn more about COBRA and how it compares with Medicare coverage, you can get personal help. And, if you are new to Medicare, learn what Medicare means - Just for You.

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