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A bipartisan bill in the House of Representatives aims to fix a costly registration mistake some older adults make when transitioning from an employer-based health plan to Medicare.
Under current rules, workers age 65 and older who quit their job but retain their company’s health insurance, as permitted by federal law — the Consolidated Omnibus Budget Reconciliation Act, or COBRA — can face penalties for late enrollment in Medicare if they finally sign up. And these fees, added to the monthly premiums, are generally lifetime.
“This bill says that whenever you have COBRA coverage and you determine that you should have enrolled in Medicare, you will be given a special enrollment period, your benefits will begin immediately and you will not pay a late enrollment 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 determines the patient should receive Medicare, the claim cannot be denied, according to a congressional staffer for one of the bill’s sponsors.
However, the measure would not prevent a COBRA insurer from pursuing a patient to recover benefits paid, which can happen at this time, Burns said.
“It doesn’t address that part of the problem,” she said.
Registration rules can be confusing and costly
Medicare’s rules and deadlines for enrollment can be confusing at best and costly at worst, experts say.
Individuals who claim Social Security before the age of 65 are automatically enrolled in Medicare (Part A Health Coverage and Part B Health Coverage) when they reach that qualifying age.
Otherwise, you must register when you reach the age of 65, unless you meet an exception, e.g. B. Qualified health insurance from a large employer (20 or more employees).
COBRA coverage doesn’t count even though it’s the same plan you had as an employee. You (or your dependents) can get COBRA coverage for up to 18 or 36 months, depending on specifics. You also have to pay the full cost of the premiums instead of your employer interfering.
Still, under Medicare rules, if you left your job past age 65, the clock would start an eight-month window in which you can enroll in Medicare. If you miss it, you can usually only sign up for coverage during a general sign-up period from January 1st to March 31st.
You could also face a late filing penalty for Part B. It’s 10% of the standard premium ($164.90 for 2023) for each 12-month period you should have signed up for but didn’t. Part A does not involve penalties.
Part D (prescription drug coverage) also includes penalties for late enrollment, whether as a standalone plan or through a Medicare Advantage plan.
This penalty is 1% of the “national base beneficiary” ($32.74 in 2023) multiplied by the number of months since your enrollment that you have spent without Part D or qualifying coverage instead. And like Part B, the fees are added to your Part D award and are permanent.
Congressional legislation, introduced in September, has been submitted to several House Committees for review. Given that this session of Congress ends on December 31, it is uncertain whether the measure will be considered before then.