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Is it worth signing up my husband for Medicare

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  • Is it worth signing up my husband for Medicare

    I'm still working and carry my husband on my insurance. Since my insurance would be primary is it worth paying for Medicare to have additional coverage?

  • #2
    If you and your husband did not exceed a MAGI of $182,000 for tax year 2020 on your Joint Tax Return, your husband can expect to pay a Medicare Part B premium of $170.10/month starting December 2021 through November 2022 for an annual cost of $2041.20. If you and husband did not exceed a MAGI of $228,000 on your 2020 Joint Tax Return, your husband can expect to pay a Medicare Part B premium of $238.10/month starting December 2021 through November 2022 for an annual cost of $2857.20.

    I will presume that your husband is eligible for Medicare Parts A and B based on ESRD with chronic dialysis. It would not matter whether he was eligible based on disability (chronic dialysis) or age (65 and over). If you are eligible for Medicare as 65 or over, the answer below would apply to both of you as covered by your respective employer group health insurance.

    If your employer’s group insurance health coverage imposes an individual annual out of pocket cost of greater than $2050 or family annual out of pocket cost of greater than $4100, AND each of you meets or exceeds the annual individual out of pocket cost or together you exceed the family out of pocket cost with your individual medical claims and would expect to do so for the foreseeable future, taking Medicare coverage could save you virtually all of the money the two of you would spend in annual out of pocket from your employer’s group health insurance coverage.

    Medicare coverage for you (if 65 or over) will remain with Medicare as a Secondary Payor as long as you continue to be covered by your employer’s group health plan. Eligibility for Medicare coverage for your husband, begins 3 months after beginning chronic dialysis, or the first day of the month that he begins a home dialysis training program.

    Your husband would be subject to the 30 Month Coordination of Benefits clause. In that case, Medicare would become the Secondary Payor for the first 30 months of Medicare eligibility and then after 30 months, Medicare would become the Primary Payor. This period remains in place for the first 30 months of Medicare eligibility in the case of chronic dialysis when the patient starts dialysis under age 65, regardless of the date of starting Medicare coverage.

    An individual starting chronic dialysis at 58 years of age, eligible for Medicare Parts A & B, who is covered by an employer’s group health insurance plan, could remain on that group health insurance plan during the 30 Month Coordination of Benefits period, not take Medicare Parts A & B and afterward take Medicare Parts A & B while still covered by an employer’s group health insurance plan and would then have Medicare as Primary payor.

    When Medicare is the Secondary Payor, they will pay the respective employer group insurance health coverage deductible amount for each claim subject to the amount that Medicare would normally pay for the covered expense. Recognize that Medicare current reduces dialysis providers claims of over $5000 per treatment down to between $250 and $300 and then pays 80%, leaving the claimant with a roughly $57 amount or 20% of the approved charge in the absence of any other coverage.

    When Medicare is the Primary Payor, they will reduce the charge amount to the Medicare approved amount, pay 80% of that approved amount and the remaining 20% will be paid by the claimant or the claimant’s Secondary Payor. In the case of your husband’s coverage by your employer group health insurance, that plan as secondary is subject to pay the claim up to their approved amount.

    My personal example is probably the best way to explain Medicare as a Secondary or Primary payor in the case of an individual with employer group health coverage. During the 30 Month Coordination of Benefits period, Medicare as Secondary payor, paid any deductible or out of pocket for each claim that I submitted to my employer’s group health insurance plan. I paid nothing out of pocket in return for my Medicare Part B premium, saving me roughly $2500/year. After the 30 Month Coordination of Benefits, Medicare as Primary payor, paid any deductible or out of pocket for each claim that was submitted to Medicare and my employer’s group health insurance plan. I paid nothing out of pocket in return for my Medicare Part B premium, saving me roughly $2500/year.

    I was in the 30 Month Coordination of Benefits period for 2 years (did not elect to begin Medicare when first eligible 6 months earlier) and was outside of the period (Medicare as Primary payor) for 2 years. During that time, I saw employer group health insurance coverage annual deductibles of $1000 and saw annual out of pocket increase from $3000 to $4000. The more the out-of-pocket max increased, generally the more I saved with Medicare as Secondary or Primary payor.

    The annual provider charges for chronic dialysis, along with monthly labs, monthly Part B dialysis drugs, and monthly nephrologist charges after employer group health insurance reductions would exceed $200,000/year. After Medicare reductions, those charges would still exceed $45,000/year. Employer group health insurance coverage limits employee liability to the annual out of pocket. Medicare Parts A & B have no annual out of pocket limit in the absence of secondary coverage that would pay for all or part of the nearly $9000/year for the 20% not paid by Medicare for individuals requiring chronic dialysis.

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