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A bipartisan bill in the House aims to fix a costly enrollment error that some seniors make when transitioning to Medicare from an employer-based health plan.
Under current rules, workers age 65 or older who leave their jobs but keep their company’s health insurance as permitted by federal law — the Consolidated Omnibus Budget Reconciliation Act, or COBRA — may face penalties. late enrollment in Medicare when they finally enroll. . And these fees, which are added to the monthly premiums, are usually for life.
“This bill says that whenever you have COBRA coverage and you find out you should have enrolled in Medicare, you get a special enrollment period, your benefits start immediately, and you don’t pay late registration penalty,” said Bonnie Burns, a consultant. for California Health Advocates and a Medicare expert.
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The bill, called the Medicare Enrollment Protection Act, would also require that if a COBRA insurer finds the patient should be on Medicare, the claim cannot be denied, according to a congressman for one of the bill’s sponsors.
However, the measure would not prevent a COBRA insurer from suing a patient to recover benefits paid, which currently can happen, Burns said.
“It doesn’t solve that part of the problem,” she said.
Registration rules can be confusing and costly
Medicare enrollment rules and deadlines can be confusing at best and costly at worst, experts say.
For people who use Social Security before age 65, Medicare enrollment (Part A hospital coverage and Part B outpatient coverage) is automatic when they reach that eligibility age.
Otherwise, you must enroll when you reach age 65, unless you meet an exception, such as having qualifying health insurance with a large employer (20 or more workers).
COBRA coverage, even if it’s the same plan you were in as an employee, doesn’t count. You (or your dependents) can get COBRA coverage for up to 18 or 36 months, depending on the specifics. You must also pay the full cost of premiums instead of your employer contributing.
Still, under Medicare rules, quitting your job past age 65 would trigger an eight-month window to enroll in Medicare. If you miss it, you can usually only buy coverage during a general enrollment period from January 1 to March 31.
You may also face a late registration penalty for Part B. This is 10% of the standard premium ($164.90 for 2023) for each 12 month period you should have registered but do not. you haven’t been. Part A has no penalties.
Part D (prescription drug coverage) also comes with penalties for late enrollment, whether as a standalone plan or through a Medicare Advantage plan.
This penalty is 1% of the “National Basic Beneficiary” ($32.74 in 2023) multiplied by the number of months since your enrollment period that you went without Part D or qualifying coverage instead. And like Part B, the fee is added to your Part D premium and is permanent.
The congressional bill, introduced in September, has been referred to several House committees for consideration. Given that this session of Congress ends on December 31, it is not certain that the measure will be considered before that date.