It has been 20 years since George Zeppenfeldt-Cestero moved on from his role as a hospital employee. His time working in the industry lead him to operate as a sole proprietor for a healthcare consulting firm. As with many Americans leaving structured employment or entering self-employment, he also left behind his employee healthcare benefits. This lead Zeppenfeldt-Cestero to purchase a private health insurance plan with Aetna; however, this plan was expensive at over $1000 per month. George was a “satisfied customer” despite the cost, as this policy covered his needs. Sadly, Aetna informed Zeppenfeldt-Cestero that they would no longer offer this plan. While looking for a new approach through a new insurer, George discovered that Aetna and himself had made a severe error. Applying under the Affordable Care Act through the State Marketplace, Mr. Zeppenfeldt- Cestero found that he should have joined Medicare Part B years earlier when he turned 65.
This delay had cost George the “Initial Enrollment” Period, which would have offered cover for doctor visits, medications, tests, ambulances, etc., basically what everyone would consider healthcare. This delay carried the cost of not only missing out on these benefits during this time but also would carry a fiscal cost as well in the form of significantly higher premiums and a six-month waiting period for the benefits to become active. Strangely, Part B mistakes happen with some apparent frequency. Only last year, just under three-quarters of a million Medicare beneficiaries were paying Part B penalties, according to the Centers for Medicare and Medicaid Services.
“It’s one of those issues that has started to snowball,” said Fred Riccardi of the nonprofit Medicare Rights Center. Unless people are working and have employee healthcare benefits or receive these through another benefit, for example, a spouse, people turning 65 should
by signing up for Part B.
What seems to be adding to the confusion could get worse over time, people used to retire at 65, and often these things such as social security, pensions, and Part B would all be triggered simultaneously. Now, however, we are seeing more and more people working into their 70s, and things are starting to spread apart.
Patricia Newman of the Kaiser Family Foundation said, “It’s all become far more complicated than it used to be when people turned 65, got their Social Security, got their Medicare, and that was that,” If you’re 65 and receiving Social Security retirement benefits, you begin receiving Medicare Part A benefits automatically which covers hospital stays, without premiums for many holders. However, it must be stated that should you delay taking Social Assistance after age 65, you will need to register actively.
As already mentioned, if you are not receiving Social Security Benefits, you will need to take deliberate steps to register for Part B of the Medicare benefit. This year the monthly figure is approximately $144, higher for those earning over the $87k threshold.
This is where age-based registration becomes a tricky path to navigate. To register without penalty, you must register either the three months before turning 65, the month you were born, or the three months after. You can register during this time online at https://www.medicare.gov/sign-up-change-plans/how-do-i-get-parts-a-b
or at a Social Security office.
If you’re covered by an employee health plan and therefore still employed, there is a good chance you don’t need the additional protection of Part B. Again. You must remember that once you leave employment and relinquish the employee benefits, you have an eight-month window to sign up for Part B. Missing this period means you have to wait until the next enrollment period between January 1 and April 1.
Missing this window of “opportunity” will result in a similar outcome as experienced by George Zeppenfeldt-Cestero, with higher premiums and being without coverage for some time, which depending on when you register, could be over a year. Precisely the type of mistake you don’t want to discover when you are in serious need of medical care.
The sad thing about this situation is that it could be solved with thorough planning and information. Many working seniors aren’t getting the correct information from their employer’s Human Resource departments, local authorities, and insurance
brokers. Why can insurers not be mandated to advise all their customers that Medicare should be their main insurance plan at 65?
This doesn’t just create a problem for the customer either, as insurance companies that have been paying medical bills when Medicare should have covered are out of pocket and will either increase the cost of premiums, affecting all its customers, or attempt to recover this amount directly from the customer.
Because misinformation and misunderstanding are so prevalent, seniors aged 64 need to start looking into Part B, which means speaking directly to Social Security.
Thankfully, the BENES Act (for Beneficiary Enrollment Notification and Eligibility Simplification) attempts to resolve this potential nightmare for seniors and proposes sending information and reminders to people nearing 65 years old. As with anything helpful relating to healthcare and insurance, the bill hopes to gain momentum after the midterm elections to become a standard.
Hopefully, this information can help from falling into the same trap as George Zeppenfeldt-Cestero called Social Security and the Centers for Medicare and Medicaid. He tried his senator’s office.
“They all said, ‘You’re out of luck.’”
Thomas M. Brzezinski is one of the founding partners of WMAG William & Michael Advisor Group LLC and Jersey Insurance Solutions. He has been involved in the insurance industry for over ten years and specializes in developing client relationships that last a lifetime.
