Social Security and Medicare Questions & Answers

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Social Security and Medicare Questions & Answers

Q: When I retired from the Federal Government in 1993 I elected to keep my hospitalization insurance. I was also eligible for Social Security. Due to a misquote by the Social Security employee, I was told there would be a $68.00 deduction from my Social Security check for Medicare Parts A and B. I could not afford the $68 at that time. The Social Security person said I could enroll at a later date. She did not tell me that I would have to pay a penalty for the rest of my life, plus the Part A and B premiums. By the time I inquired again, my premium would have been about $97.40 a month with the penalty, and that would increase like other Medicare premiums over time. I have some hospitalization insurance but it`s not enough to offset the charges. I don`t want to give up my home if I am hospitalized. Is there anything I can do?
-Joyce M., Naples, FL

A: Most individuals become automatically entitled to hospital benefits under Medicare Part A when they reach age 65 if they are eligible for monthly Social Security retirement or survivors benefits. Federal employees became eligible for Medicare coverage and were required to pay the hospital insurance portion of the FICA payroll taxes beginning in 1983, a full ten years prior to your retirement. It appears you may be entitled to Medicare Part A hospital insurance.

Some individuals who have insurance through their employer may delay taking Part B supplemental that pays for doctors` fees and other medical costs. If you do not take Part B when you are first eligible for Medicare, you may still be able to sign up during a General Enrollment Period from January 1 through March 31 of each year. The cost of the Part B may go up 10% for each 12-month period that you delayed taking it, except in special cases:

You can sign up for Part B without penalty if you are still covered by your employer group health plan through active or current employment or
You sign up for Part B within 8 months of the date when employment ends (or your employer health plan ends if that comes first).

Because of the length of time that has now passed, there may be significant cost increases and penalties for Medicare Part B.

I suggest that you seek the services of a volunteer health insurance counselor through your Area Agency on Aging. The service is free and the counselor can provide you with information about Medicare, Medigap supplements and Medicaid programs in your area. The specially trained volunteers can help you wade through the confusing language of government and private insurance and help you resolve questions about payments and claims. The volunteers are not connected with any insurance company. Their purpose is to objectively help you select insurance that provides you with the coverage you need which fits within your budget.

Area Agencies on Aging are non-profit organizations that cover all communities in the United States. You can reach your local agency by checking your phone book or calling the Eldercare Locator at 800-677-1116. Or go to http://www.eldercare.gov.

This article first appeared in Volume 6, Issue 6 of "The Social Security and Medicare Advisor" newsletter (May/2001). To receive future editions of "The Advisor" in its special, free e-mail version, please click here.