CASE FLASH:  COBRA COVERAGE AND MEDICARE PART B

Mr. and Mrs. C were getting health insurance through Mrs. C’s employer when the company went out of business two years ago. Mr. and Mrs. C then got COBRA, which allowed them to extend the employer coverage by paying the full premium themselves. A few months after Mrs. C stopped working, both she and her husband turned 65, started receiving Social Security benefits and were automatically enrolled in Medicare Part A (hospital insurance). Pleased with their COBRA coverage, however, they chose not to enroll in Part B (for physician services). Many months later, Mr. and Mrs. C got a letter stating that their COBRA coverage was going to end.

Mr. C called the Medicare Rights Center and asked how he and his wife could enroll in Medicare Part B to replace their COBRA coverage when it ends. The counselor informed Mr. C that they should have enrolled in Part B when they first took Part A. If you already have COBRA when you become eligible for Medicare, COBRA should terminate and Medicare should become your primary insurance. Also, having COBRA does not qualify you for a Special Enrollment Period to enroll in Medicare outside of the General Enrollment Period (although having insurance from a current employer would have). Since they missed their Initial Enrollment Periods to sign up for Medicare (the seven-month period surrounding their 65th birthdays), Mr. and Mrs. C would only be able to enroll in Part B during the General Enrollment Period, which runs every year between January 1 and March 31.

The counselor advised Mr. and Mrs. C that, because they did not enroll in Part B when they were first eligible, they will have to pay a Part B premium penalty for enrolling late. Mr. C asked if he and his wife could be excused from this penalty since their COBRA plan did not tell them that they needed to take Part B right away. The counselor explained that unless a government official, such as someone at 800-MEDICARE, gave them inadequate or incomplete information about benefits coordination, they would not qualify for a Special Enrollment Period or have their premium penalty waived. However, the counselor explained, if Mr. and Mrs. C have limited income, they may be eligible for a Medicare Savings Program (MSP) to help with Medicare costs. If you qualify for an MSP, you pay no Part B premium or Part B premium penalty, even if you enrolled in Part B after you were first eligible for Medicare. The hotline counselor gave Mr. C the address of his local Medicaid office so that he and Mrs. C could go to apply for an MSP after they enrolled in Medicare Part B.

-Adapted from: “Case Flash: COBRA Coverage And Medicare Part B”, MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center, Vol. 11, No. 6: March 18, 2008.

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