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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 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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