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I am retiring next month, and my company does not have retiree health insurance. When should my husband sign up for Part B?

Your husband should sign up for Part B during the last month of your employment, so he will be covered on the first day/month after you retire. This way, he will not have a gap in health coverage.

Also, if he waits too long, he may get charged a penalty. Your husband has 8 months (called a Special Enrollment Period) after you retire or your employer health insurance ends – whichever comes first – to sign up for Part B. If he enrolls in Part B after the 8 months, he may get a late-enrollment penalty for Part B. This penalty can be expensive. And, he would have to wait until the next General Enrollment Period (Jan. 1-Mar. 31) to enroll, with coverage not starting until July 1 of that year, which means possibly an even longer time without coverage.

In addition to enrolling in Part B, your husband should also consider his other health coverage options:

  • MedigapHe may want to consider buying a Medigap policy to supplement his Medicare Parts A and B. Medigap pays for some of the out-of-pocket costs in Medicare, such as deductibles and coinsurance. He should shop around and buy a Medigap policy during the first 6 months after he takes his Part B. It is important to buy during the first 6 months after he enrolls in Part B because he has “guaranteed issue.” This means he can buy any Medigap policy that is sold in your state. Learn more about Medigap.
  • Medicare Advantage: Once he has Medicare Part B, he might want to shop around and compare available Medicare Advantage options to Original Medicare. Learn more about Medicare Advantage.
  • Part D: Regardless of whether he decides on Original Medicare or Medicare Advantage, he will need to decide about joining a Medicare Part D drug plan. If 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: 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, death. COBRA coverage is generally expensive. People who get COBRA must pay the full cost, or premium, themselves; their company no longer helps with the premiums for their coverage. The important thing to know is that people who enroll in COBRA are not protected by the late-enrollment penalty for Part B. They do not get an 8-month period to enroll in Part B after their COBRA ends, and they would have to pay a lifetime penalty for Part B when they do enroll. In addition, they would have to wait to enroll in Part B during the next General Enrollment Period, which runs each year from Jan. 1-Mar. 31, with Part B coverage not starting until July 1 of that year. The other option is to enroll in both Part B and COBRA but that can be very expensive. Either way, it is usually a good idea to call your job’s benefits administrator to find out more about your specific COBRA options, especially if you have high medical and prescription costs. You will want to find out how much COBRA will cost, what type of coverage it will provide, and if it offers creditable drug coverage.

Topic: Medicare enrollment and cards

Keywords: enrollment, Part B, retiree

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I am turning 65 and live permanently outside the country. Do I need to enroll in Medicare?

Medicare does not provide coverage for services outside the United States, except in very limited circumstances. However, living overseas does not exempt you from the Part B penalty.

Most newly eligible people enroll in Part A when they turn 65. Some people can delay enrolling in Medicare B when first eligible and not face a penalty. These include people who are working and have employer-related health insurance (or get health insurance through an actively-working spouse). Those who are newly eligible for Medicare and do not have employer-related health coverage can face a 10% penalty premium surcharge for each 12 months they were eligible for and not enrolled in Medicare Part B.

If you are living overseas and actively working with health insurance through a group health plan (including a foreign national health plan), you can delay Part B until you retire or lose your employer-related health insurance. You will have an 8-month Special Enrollment Period to enroll in Part B, if and when you return to the states.

If you are retired and live overseas and do not have health insurance through active employment (either through your own or a spouse), there are a few things to consider about enrolling in the various parts of Medicare during your 7-month Initial Enrollment Period when you turn 65:

  • Part A: For most people, Part A is free so you should enroll during your 7-month IEP. Medicare benefits are generally not available outside the U.S. But, you can use your benefits when you return to the states and avoid a late-enrollment penalty. (The Part A penalty premium is 10% of the current Part A premium. You would continue to pay the penalty premium for twice the number of years you were eligible for Part A but did not enroll.)
  • Part B: Here you will need to weigh the pros and cons of cost. That is, paying the monthly premium for Part B while overseas (without having access to Medicare Part B benefits until you return to the states) versus the cost of paying a (likely hefty) lifetime penalty for not enrolling in Part B when first eligible. Also, after your IEP, you can only enroll in Part B during a certain time of year (between Jan 1 – March 31) with coverage not starting until July 1, so enrolling during your IEP can help you avoid a potential future gap in health coverage.
  • Part C and Part D: To enroll in a private Medicare Advantage Health Plan or a Medicare Part D Prescription Drug Plan, you must live in the plan’s service area. Since you are living overseas and do not have an U.S. primary address, you cannot enroll in a C or D plan. When you return to the states, you will have a Special Enrollment Period to enroll in a health or drug plan, if you decide to do so.
  • Medigap: Like Parts C and D, you cannot purchase a Medigap policy if you do not have a primary address in the U.S. If you live overseas and enroll in Part B, you will trigger your Medigap Open Enrollment Period. This is the 6-month period after you enroll in Part B (remember, you need Parts A and B to purchase a Medigap policy) during which insurance companies must sell or “issue” you a Medigap policy even if you have health problems. Because of this protection, it is generally the best time to buy a Medigap policy. There is no guarantee when you return to the states that an insurance company must sell you a Medigap policy outside the Open Enrollment Period.

Since more baby boomers may be retiring and living part of the year overseas or traveling overseas, there are some other options to consider for health coverage. Learn more.

Remember, Medicare does not generally cover services outside the U.S., only in certain and rare emergency situations.

Topic: Medicare enrollment and cards

Keywords: enrollment, overseas, Part B

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I am a federal retiree with federal employee health benefits (FEHB). Why should I enroll in Part B?

Federal retirees with FEHB have the option to enroll in Part B or not when they are first eligible for Medicare. Like others newly eligible for Medicare, they have to weigh their options based on their particular situation, including their health and financial needs.

Most enroll in Part A, since they paid for it while still working. In most cases, Part A (covers hospital services) will pay first, FEHB will pay second.

This decision needs careful review. Let’s look at your options.

  • Reasons to enroll in Part B: There are a number of reasons to enroll. First, some FEHB plans will cover copays, coinsurance, and deductibles if you enroll in Part B, so it might be in your financial favor to enroll. Also, you get a one-time chance to change FEHB plans up to 30 days before your Medicare begins. So, you could enroll in a FEHB plan with a lower monthly premium and lower copays. If you do not enroll in Part B when you are first eligible, you could have a penalty later if you decide to enroll. And, you have to wait for Medicare general open enrollment period (January 1- March 31) with coverage not starting on July 1 of that year. Lastly, you may find better coverage under Part B than FEHB for certain services, such as durable medical equipment and rehabilitation services.
  • Reasons to not enroll in Part B: FEHB coverage is known to be very good coverage, and unless Congress changes it, many federal retirees find they do not need both FEHB and Part B. Also, many federal retirees find that they can save money by not having to pay two monthly premiums: one for their Part B ($104.90, for most, in 2013) and for their FEHB plan (amount varies by plans available). And, Medicare beneficiaries with higher incomes ($85,000 single, $170,000 married) have to pay higher Part B premiums (ranging from $146.90 – $335.70 in 2013).

So, it is worth your time to review the financial considerations of paying both premiums and potentially getting your deductibles and copayments waived by your FEHB plan versus paying all cost-sharing for the FEHB plan and paying a late-enrollment penalty should you decide to enroll in Part B at a later time.

Topic: Medicare enrollment and cards

Keywords: FEHB, Part B, retiree

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