By A. Tereasa Rerko, Esq. and Margo A. Russell, Paralegal
Medicare insurance coverage is provided to individuals who are 65 or older or who have been receiving Social Security Disability insurance payments for 24 months. Medicare has several Parts; this article will talk about Parts A and B.
Medicare Part A provides payment for medical care when you are an inpatient in a hospital. Everyone entitled to Medicare insurance receives Part A coverage; it is not optional. There is no premium charged for this insurance; however, there may be a deductible for services that are not covered by Medicare Part A.
Medicare Part B is coverage for medical services other than inpatient hospital stays. Examples would include doctors’ visits, outpatient care and blood work. Medicare Part B is optional and requires payment of a monthly premium which is generally deducted from monthly Social Security checks (for 2007 the standard premium is $93.50 per month). Like most health insurance, Part B is subject to certain deductibles and co-payments.
Medicare Part B coverage is an optional benefit, and you are permitted to decline it, or “opt out” of this coverage. The decision to “opt out” is an individual one, and involves many considerations. Generally speaking, Medicare Part B coverage is a desirable benefit. Do not decide lightly to “opt out” of Medicare Part B, because if you decide later that you want to buy Part B coverage, you will usually pay a higher monthly premium when you do enroll.
However, in some cases you can keep your existing health insurance until you need to enroll in Medicare Part B without paying a premium penalty for late enrollment. If your spouse’s health insurance policy is covering all of your medical needs, if you are working part-time and have health insurance coverage through your employer, or if you are covered by a family member’s insurance or insurance from a union group health plan, it is not mandatory that you select Part B coverage. In those instances, you will be able to enroll in Part B at a later date without a premium penalty. The specific time period during which you can elect Medicare Part B coverage without a premium penalty is called the “special enrollment period”.
To avoid paying monthly premium penalties for not enrolling when you are first eligible, there are specific rules you must follow when selecting Part B coverage during the “special enrollment period”. First, you must notify the Social Security Administration in writing that you do not want to enroll in Medicare when it is first offered. Next, the “special enrollment period” is only available for eight months following the expiration of your private health care coverage. Failure to enroll during those eight months will also result in higher monthly premiums.
Another important rule about health insurance coverage is that Medicare can be primary insurance coverage even if you have other health insurance coverage. If your employer has less than 20 employees, Medicare Part B will be primary and the group health insurance will be secondary. In that case, group health insurance will not pay any medical bills until the Medicare Part B payment is made. So be careful — if you decline Medicare Part B in this situation, you will end up with no health insurance coverage for things such as doctors’ visits, outpatient testing, and other medical services that Medicare Part B would be responsible to pay.
This article is a very brief overview of Medicare coverage and cannot answer all questions on this subject. For additional information, please refer to the booklet “Medicare & You” issued by the Centers for Medicare & Medicaid Services. Other sources of information are: