Medicare and COBRA Trap
I heard this yesterday from a friend of family. Friend was not familiar with the exact details. But, here it goes ...
Friend's sister-in-law turned 65 on 6-5-2011.
Her husband was laid off 3-1-2011. He maintains health insurance for both ... COBRA.
I'm not sure of the exact dates ... but the story goes something like this.
She goes in for a routine colonoscopy on 3-15-2011. Something goes wrong. Doctor punctures colon. Complications arise. She gets very ill and lapses into coma. Comes out of coma but remains under care to this date. She will have continuing problems the rest of her life.
The husband has been trying to get Medicare involved. Medicare refuses. Has something to do with her enrollment in Part B.
I'm thinking they refused Part B. They probably thought COBRA would provide coverage so why also pay for Part B? Might as well save a few bucks.
Sounded strange to me. So I began a little research. Turns out COBRA and Medicare is a problem.
I found this article on AARP's site.
COBRA Bites, Medicare Part B Insurance Coverage Penalty - AARP Bulletin
" ...Under current law, working Americans with employer health coverage can postpone signing up for Medicare until after 65. When they retire, accept a buyout or are laid off, they then get an eight-month special enrollment period to sign up for Medicare Part B (which covers doctors visits and other outpatient services) immediately and without penalty.
But many people in these circumstances are able to extend their employer coverage for a year or two under a 1986 law known as COBRA.
What they may not realize is that waiting until their COBRA coverage expires to enroll in Part B disqualifies them from the eight-month grace period. Instead, they must wait to sign up during open enrollment, from Jan. 1 to March 31 each year, and their coverage won’t begin until the following July.
They also get hit with a late penalty ....
The COBRA catch
Social Security officials explain that under the law, people can postpone signing up for Part B without penalty only while they have group health insurance provided by an employer for whom they or their spouses are still working.
Therefore, time on COBRA—used after employment has ended—does not entitle them to special enrollment ..."
Has anyone run into a similar case? It appears to me they tried to do the "right" thing by keeping COBRA. Now, they are stuck.
They are looking into a BCBS Medigap. Would there be any complications with obtaining a Medigap?
I heard this yesterday from a friend of family. Friend was not familiar with the exact details. But, here it goes ...
Friend's sister-in-law turned 65 on 6-5-2011.
Her husband was laid off 3-1-2011. He maintains health insurance for both ... COBRA.
I'm not sure of the exact dates ... but the story goes something like this.
She goes in for a routine colonoscopy on 3-15-2011. Something goes wrong. Doctor punctures colon. Complications arise. She gets very ill and lapses into coma. Comes out of coma but remains under care to this date. She will have continuing problems the rest of her life.
The husband has been trying to get Medicare involved. Medicare refuses. Has something to do with her enrollment in Part B.
I'm thinking they refused Part B. They probably thought COBRA would provide coverage so why also pay for Part B? Might as well save a few bucks.
Sounded strange to me. So I began a little research. Turns out COBRA and Medicare is a problem.
I found this article on AARP's site.
COBRA Bites, Medicare Part B Insurance Coverage Penalty - AARP Bulletin
" ...Under current law, working Americans with employer health coverage can postpone signing up for Medicare until after 65. When they retire, accept a buyout or are laid off, they then get an eight-month special enrollment period to sign up for Medicare Part B (which covers doctors visits and other outpatient services) immediately and without penalty.
But many people in these circumstances are able to extend their employer coverage for a year or two under a 1986 law known as COBRA.
What they may not realize is that waiting until their COBRA coverage expires to enroll in Part B disqualifies them from the eight-month grace period. Instead, they must wait to sign up during open enrollment, from Jan. 1 to March 31 each year, and their coverage won’t begin until the following July.
They also get hit with a late penalty ....
The COBRA catch
Social Security officials explain that under the law, people can postpone signing up for Part B without penalty only while they have group health insurance provided by an employer for whom they or their spouses are still working.
Therefore, time on COBRA—used after employment has ended—does not entitle them to special enrollment ..."
Has anyone run into a similar case? It appears to me they tried to do the "right" thing by keeping COBRA. Now, they are stuck.
They are looking into a BCBS Medigap. Would there be any complications with obtaining a Medigap?
Last edited:
