COBRA Coverage

  • Under federal COBRA law, companies with at least 20 employees must allow former employees to buy into the group health plan for up to 18 months after separation
  • After turning 65, however, once you leave the job, you MUST enroll in Part B within eight (8) months after you retire
  • The 8 month window is known as the "Special Enrollment Period"
  • If you miss this deadline and your employer coverage expires, you could find yourself uninsured for many months
  • You will not be allowed to enroll in Medicare Part B until the next "General Enrollment Period," which runs from January 1 to March 31. Your coverage won't begin until July
  • PLUS... to add insult to injury you may be subject to late penalties

Prescription Coverage:

  • You are about to enroll in a Medicare Supplement, or just join Medicare and you have plenty of prescription pills to last for another 90 days, or so
  • You decide to delay taking a Part D Plan (prescriptions) due to your ample supply on hand
  • Sounds like a prudent idea, HOWEVER, if you go more than 63 days (more than 2 of the longest months in the calendar year), you may be subject to the Part D penalty
  • The Part D penalty is 1% of the national average cost of Part D plans for every month without coverage, currently that means about $.35 per month. That penalty will be added to your Part D premium for the rest of your life

Oversight for Medicare Supplement plans comes from the state, not the federal government. The states mandate the coverage that must be provided. Most states have a series of Medicare Supplement plans that are designated by a letter of the alphabet, each different from the other. As one of three "exception" states, Massachusetts has only two plans: The Medicare Supplement "Core" plan and the Medicare Supplement "One" plan.

Most Massachusetts carriers have branded their respective offerings by using the "Core" or "One" names, but some use their own brand. You can tell which is which regardless how the product is named by the premium. "Core" plans are exactly what the name implies; they are stripped down versions where deductibles and copayments may apply. In 2016, for example there is an $1288 hospital deductible when someone is hospitalized. This applies every "benefit period", which is an every 60 day period after someone has been released from the hospital. That means that the deductible can be owed multiple times a year. The hospital deductible is changed annually and is associated with Part A of Medicare. A much smaller Part B (doctors) deductible and copayments for some services also applies to the "Core" plan. Most of the time the "Core" plans do not cover you outside of the country.

The "One" plan is always more expensive. It covers most copays, all Medicare deductibles and it covers beneficiaries world-wide for emergent or urgent care. All Medicare approved services are covered so once the premium is paid there are, usually, no further charges for hospital and doctor services.

As mentioned all carriers are mandated to offer the same benefits and they all have the same doctors and hospitals in their networks. To differentiate, look at the premiums and see if they offer any extra benefits. If you used a certain health carrier during your working career but they offer a more expensive Medicare Supplement plan, it makes good sense to consider other health plan carriers once you elect Medicare. The basic benefits are mandated by the state, so why pay more than necessary?

You have decided that you need a "Stand Alone" Part D plan either because you have Medicare only or a Medicare Supplement Plan (Medigap Plan). Let's assume that you have elected to choose a Medicare Supplement Plan because you want to be able to go to any doctor or hospital that accepts Medicare. You're not a big fan of referrals and want to avoid having to be told which specialist to use. OK fine, but you'll still need to elect a Part D plan to cover your prescriptions. So what's the best Part D plan available to fit your situation?

We suggest that you go to:

and see which Part D plans are available in your area. You will need to enter your zip code. This tool provides useful information to help you review Medicare drug plans based on your current prescription needs. The drug costs displayed are estimates and may vary based on the specific quantity, strength, and/or dosage of medication. Variations are also impacted by whether you use mail away and which pharmacy you use.

Unlike Medicare Supplement plans, which can be selected monthly, Part D plans can only be selected during the Annual Open Enrollment (Oct 15 to Dec 7) for an effective date of January 1, or during a 7 month window around your 65th birthday, or at Special Election Periods. Special Election Periods generally result when you retire and leave your employer's health plan, move from the service area or at other times defined by Medicare.

Part D Plans vary widely. The most expensive does not mean that it's the best for you. Use the website noted above and you can save money by selecting the best plan tailored to fit your needs. OR... you can contact us and we will research it for you.

P.S. Please note that unlike Medicare Supplement Plans, Medicare Advantage Plans can include Part D coverage built into the product, but not always. It's a choice. This gets confusing. You cannot elect a stand-alone Part D Plan, if you intend to use it with a Medicare Advantage Plan. In fact, if you do, you will be automatically disenrolled from your Medicare Advantage Plan.

P.P.S. Also, selecting a Part D plan is not mandatory, but you may incur a penalty if you do not take the option when you first become eligible for it.

I've assisted, or led the presentation of hundreds of Medicare Advantage and/or Medicare Supplement seminars. The presentations are regulated by CMS, the Centers for Medicare and Medicaid Services. Their strict oversight has been mandated by Congress to help assure that employees of Health Plans and/or brokers are accurate in describing their services. Ironically, the oversight adds a layer of "government or legal speak" that can be confusing to those who are not accustomed to it.

When the seminars end, there is a Q & A session so that everyone can clarify their understanding of what they heard. Inevitably, someone asks the question, "What's the difference between a Medicare Advantage and a Medicare Supplement plan?" Because the seminars deal directly with that question, it is always disappointing to hear it asked, but not surprising given that these things are complicated.

One of the big differences between the two types of plans is ACCESS TO DOCTORS. On a Medicare Supplement plan, you can go to any doctor who accepts Medicare. In Massachusetts, that's currently about 96% of all doctors. You can go to a specialist WITHOUT A REFERRAL, again as long as they accept Medicare. Access to doctors is especially important to those who have established relationships with a particular specialist, or want to be assured of access to certain doctors or hospitals, if they develop a chronic condition or disease. As Martha would say... that's a good thing.

However, Medicare Supplement plans are, typically, MORE EXPENSIVE than Medicare Advantage plans. Often a retiree on a fixed income may make a decision regarding the two types of plans based on the cost of their monthly premiums. The Medicare Advantage plan will, typically, have a contracted network of doctors and hospitals. Members of those plans pick a primary care doctor (PCP) from a list provided by the health plan. If the member requires the services of a specialist, they need to get a referral from their primary care doctor. That specialist will usually be in a "circle" of specialists that is part of the primary care doctors' "group". So, members in Medicare Advantage plans will usually pay a lower monthly premium and are required to select a primary care doctor and get referrals to specialists. Martha would also say that the lower premium is a good thing.

You might be asking... "That's all well and good, but what's the best type of plan for me?". Well, that depends. Ask yourself these questions to help you clarify matters:

  • Does my PCP accept any Medicare Advantage Plans?
  • If not, am I willing to change to another PCP?
  • Which specialists are in the referral circle of my PCP?
  • Can I afford the monthly premium of the Medicare Supplement?
  • What extra benefits can I get, if any?
  • Is the plan I am considering a not-for-profit, or a for-profit plan?
  • What is their ranking and reputation?
  • What does my doctor say about the plan I am considering?
  • What are the potential out of pocket costs associated with the plan?
  • Do I need to take a separate Part D plan (prescriptions), or can I get one that's included?

Part D is a subject for a future blog... Stay tuned!