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Medicare and Health Care


*This is a non-medical board. This site shall not be used to seek professional, medical or legal consultation.

Medicare is health insurance for people age 65 or older, under age 65 with certain disabilities, and any age person with End-Stage Renal Disease (ESRD). There are many different parts to Medicare; with all of these options, it can be confusing.

This forum will allow members to share their experience with medicare and seek advice* on certain medicare-related situations.

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Racter  
#1 Posted : Tuesday, August 15, 2017 7:24:51 AM(UTC)
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If a retiree, age 65, decides not to enroll in Medicare A and B so they can continue to contribute to their HSA, what should they
consider before they make this decision?

Mike
OUtside  
#2 Posted : Thursday, August 17, 2017 9:22:22 AM(UTC)

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Typically a high deductible plan does not waive copays or deductibles for retirees who are enrolled in Medicare, therefore not having Medicare would not be an issue in that sense (check your high deductible plan to confirm this point).

Which leaves the penalty for late enrollment in Part B if you later decide to enroll down the years, 10% percent per year added to the Part B premium for every year you delayed enrollment in Part B. You can enroll in Part A later with no penalty. For most retirees, Part A is free. In addition to in hospital care, Part A provides a few other benefits which you should review in the Medicare and You pamphlet to ensure leaving them on the table at least temporarily is agreeable to you.

For retirees whose plans (eg fee for service) waive copays when Medicare is primary, even those who opt not to enroll in Part B, Part A is valuable because the plans waive the Part A deductible for in hospital care (around $1300) as well as their own in hospital copays, which can be costly.

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Racter on 8/17/2017(UTC)
Racter  
#3 Posted : Thursday, August 17, 2017 1:19:44 PM(UTC)
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Thanks. Valuable information.

When Medicare calculates the 10% penalty on the Part B premium, how do they calculate it?

This is my understanding - I'll use made-up Part B monthly premiums to illustrate how I think the penalty works.

Let's say that the 2018 Part B monthly premium is $140. You wait one year and enroll in 2019. The monthly Part B premium in 2019 is now $150. 10% penalty on that is $15 added to your $150 premium for $165. In 2020 the premium is $160. They add the $15 (the 10% penalty amount added in the year you enrolled) and they continue to add that $15 each year to your new Part B monthly premium. ??
OUtside  
#4 Posted : Thursday, August 17, 2017 3:35:56 PM(UTC)

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Here's the Medicare and You pamphlet https://www.medicare.gov...y-different-formats.html

I didn't readily see in there the answer to your question but I think the answer is it's 10% added to whatever your current year's premium is and then 10% added to whatever next year's premium is. So, no, it wouldn't stay $15 as in your example (or so I think). Also, it's 10% for each 12-month period of delay and you wouldn't be able to enroll until the earliest Jan 1 of the open season they have for new enrollments, which then becomes effective the following July 1.

The decision to enroll is often discussed at this forum and you would get a lot of information by doing a search on the topic. While there are pros and cons about enrollment and whether enrollment is likely to be cost effective vs the Part B premium, I believe most should agree if a retiree believes he/she will eventually enroll for whatever reason, it's best to enroll at the earliest in order to avoid the penalty, which probably could not be offset by other routes such as in the interim trying to invest the saved premiums elsewhere, etc.



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MelissaKay on 9/21/2017(UTC)
old fed  
#5 Posted : Thursday, August 17, 2017 4:08:09 PM(UTC)
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Originally Posted by: OUtside Go to Quoted Post
Here's the Medicare and You pamphlet https://www.medicare.gov...y-different-formats.html

I didn't readily see in there the answer to your question but I think the answer is it's 10% added to whatever your current year's premium is and then 10% added to whatever next year's premium is. So, no, it wouldn't stay $15 as in your example (or so I think). Also, it's 10% for each 12-month period of delay and you wouldn't be able to enroll until the earliest Jan 1 of the open season they have for new enrollments, which then becomes effective the following July 1.

The decision to enroll is often discussed at this forum and you would get a lot of information by doing a search on the topic. While there are pros and cons about enrollment and whether enrollment is likely to be cost effective vs the Part B premium, I believe most should agree if a retiree believes he/she will eventually enroll for whatever reason, it's best to enroll at the earliest in order to avoid the penalty, which probably could not be offset by other routes such as in the interim trying to invest the saved premiums elsewhere, etc.





i'm curious if you know the answer to my question: i am eligible for medicare at the end of september but i am delaying enrolling in part b until january when my MAGI resets. i understand this will be in effect in july.

you mention 10% penalty for each 12 month period. is the penalty the same if the period is less than 12 months? i assume so but no one seems to know for sure, least of all the person at the SSA office. i looked at medicare site but if it's there i was unable to find it. it's more out of curiosity, i'm fine with the penalty rather than pay almost $300/mo for the rest of this year.

Edited by user Thursday, August 17, 2017 4:08:58 PM(UTC)  | Reason: Not specified

GoHuskers  
#6 Posted : Thursday, August 17, 2017 4:35:41 PM(UTC)

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Here is a link to the start of SSA's procedure on calculating the penalty for late enrollment.

https://secure.ssa.gov/a.../poms.nsf/lnx/0601001010

In old fed's case, there would be no penalty if he waited until the following January to enroll in that general enrollment period. That is because there were less than 12 months from the end of his initial enrollment period to the end of the enrollment period in which he enrolled in Part B (also known as SMI - Supplementary Medical Insurance). (If you need a definition of the various enrollment periods for Part B they can be found starting at https://secure.ssa.gov/a.../poms.nsf/lnx/0600805015 .)
thanks 3 users thanked for this useful post.
Racter on 8/18/2017(UTC), old fed on 8/18/2017(UTC), MelissaKay on 9/21/2017(UTC)
Racter  
#7 Posted : Friday, August 18, 2017 5:24:05 AM(UTC)
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Thanks GoHuskers. It is clear from your first link to the Program Operations Manual that the percent penalty is added each year to the Part B premuim.
old fed  
#8 Posted : Friday, August 18, 2017 5:27:59 AM(UTC)
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Originally Posted by: GoHuskers Go to Quoted Post
Here is a link to the start of SSA's procedure on calculating the penalty for late enrollment.

https://secure.ssa.gov/a.../poms.nsf/lnx/0601001010

In old fed's case, there would be no penalty if he waited until the following January to enroll in that general enrollment period. That is because there were less than 12 months from the end of his initial enrollment period to the end of the enrollment period in which he enrolled in Part B (also known as SMI - Supplementary Medical Insurance). (If you need a definition of the various enrollment periods for Part B they can be found starting at https://secure.ssa.gov/a.../poms.nsf/lnx/0600805015 .)


wow, thank you! guess i need to brush up my google skills.
RickBinABQ  
#9 Posted : Wednesday, January 30, 2019 8:23:13 PM(UTC)
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I know this is a little old, but the question is pretty good.
My 1st question would be where the OP was getting the funds for his HSA? From his retirement annuity or a 2nd job or what?

Now in my case I expect to be working until about 70 as I am late entering the Federal workforce, and need the years in.
So I will not enroll in either part of medicaid A/B until my early 70's.

The calculation is then [if you are married] is it worthwhile to set a total of $7800/year aside in a tax free account to offset the 10% annual increase in medicare part B premiums for each year?
It just might be for high net income couples, due to the tax savings. Especially once the age 70 1/2 RMD of now taxable income is added to the mix.

Has anyone actually done the calculations, or is it all just hearsay.
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