Retiring Age 65 With Younger Spouse – Medicare COBRA Trap

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Are you working past age 65 and have a younger spouse? You are Medicare eligible, spouse is not. Is COBRA and option? What is the Medicare COBRA trap?

Shopping Medicare supplement rates? Start here.

Most of the time COBRA is a viable option for folks leaving employer group health insurance. But if you are retring at age 65 or older with a younger spouse COBRA may be your WORST option.

Why? Because of the COBRA trap.

CMS rules grant you an 8 month window after leaving employer group health insurance if you need to enroll in Medicare Part B. If you are 65 or older you have 8 months to sign up for Part B without penalty or delay.

But if you take COBRA the 8 month window no longer applies. Enrolling in COBRA means you could wait a year or longer before your Medicare Part B is effective.

And you will pay a LIFETIME late enrollment penalty.

As if that isn't enough, without Medicare Part A and B in place you cannot buy a Medigap plan or enroll in an Advantage plan. All you could have is Part A and a Part D drug plan.

Employer group health insurance is considered creditable DRUG coverage but the health coverage is NOT deemed creditable by Medicare.

This is the COBRA trap.

COBRA – If COBRA is available you will be able to keep your current doctor . . . at least until the next open enrollment.

COBRA premiums are often less than Obamacare premiums.

Original Medicare has 4 parts. Your red, white and blue card is broadly accepted by doctors and hospitals alike. No networks!

Medicare Part A covers hospital inpatient charges and has a per admission deductible

Medicare Part B is for outpatient health care treatment. Doctor visits, labs, X-rays, MRI, CT scan (CAT scan), ambulance, ER, outpatient clinics, etc. Essentially any Medicare approved health care received outside the hospital setting. Treatment considered medically necessary under Medicare guidelines. Medicare Part B has a calendar year deductible. Once satisfied, Medicare pays 80% of the approved charge, you are responsible for the remaining 20%.

Most seniors worry about hospital stays, but your major expenses will more than likely fall under Medicare Part B outpatient expenses. Original Medicare stand alone has no cap on your out of pocket expenses.

You pay until you run out of money, get well or die.

Medicare Part C is now referred to as Medicare Advantage. More on that later.

Medicare Part D covers outpatient prescription drugs. Some Advantage plans have drug coverage built into the plan.

Employer group health insurance drug coverage is normally considered creditable coverage.

If you delay enrolling in Part B you should watch out for the COBRA trap.

Did you know that some doctors and hospitals do not accept ANY Medicare Advantage plans? What happens if your claim is DENIED?

Medigap and Advantage plans cover the same things, but what you pay out of pocket for your care, and where you receive your care, is very different.

Original Medicare does not have networks. You can use any doctor or hospital anywhere in the US. Another plus is the ABN form which is only used with Original Medicare.

Advantage plans are managed care plans. Some are PPO, some are HMO. In 2018 about half the plans are HMO with the balance being PPO. How are Medicare Advantage plans like a store credit card?

If you receive non-emergency out of network care under a PPO you may have higher copay’s and deductibles. Your max OOP may also be higher. Some plans do not cap out of network charges.

Non-emergency out of network care charges may be denied if you have an HMO.

Some cancer centers, such as Mayo Clinic, Sloan Kettering and MD Anderson may not participate in certain Medicare Advantage plans.

Not all cancer responds to chemotherapy, but 80% of cancers are treated with chemo. Those treatments occur in an outpatient setting and are covered under Medicare Part B.

Chemotherapy drugs administered in a doctor's office or clinic normally fall under Part B. Medication from a retail pharmacy or by mail fall under your PDP.

This is why most of us chose a Medicare supplement plan in 2019. Bob Vineyard, independent Medicare insurance broker in Georgia, can explain your Georgia Medicare insurance options and will allow you to decide.

We represent several carriers including Aetna, Anthem Blue Cross, Humana and more.

According to the Mayo clinic, "new cancer treatments are routinely priced at over $100,000 per year of treatment."

Obamacare is often more expensive than COBRA, has higher deductibles and OOP as well as tighter networks.

What is the Medicare COBRA Trap?

#RetiringAge65WithYoungerSpouse #MedicareCOBRATrap #GAMedicarePlans

Retiring Age 65 With Younger Spouse – Medicare COBRA Trap


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