Sprycel, COBRA and the Part B LEP

[LostDollar]

Is the LEP assessed at month 1 or not assessed unless he does not join B for a full 12 months? He has 8 months to remain on Cobra and 6 months from his Part B effective date to buy a Medicare Supplement with guaranteed issue. Does the manufacturer of Sprycel offer a patient assistance program? Alternatively, could his doctors put him on some type of Part B therapy instead?

Caveat, not an agent.

I think you raise a good question, see my comments to Somarco above. Part B penalty IS assessed for 12 month blocks of no coverage. The question in my mind is whether or not the months of the employment sep are excludable for Part B penalty computation purposes.

 

[Brad G]

Okay. I have given this more thought. kgmom219 has this layed out very well. I don't think you can make the decision for them, you can only present these facts and let them decide. Based on the analysis, going the Cobra route first is probably the most cost effective as they probably aren't likely to live long enough to make up the difference in the long run without the permanent Part B late penalty. Laying out the comparison for the is the right thing to do but knowing a year is a long time, unless you know this prospect personally, you might not be the one to enroll him when that time comes.

 

[LostDollar]

Okay. I have given this more thought. kgmom219 has this layed out very well. I don't think you can make the decision for them, you can only present these facts and let them decide. Based on the analysis, going the Cobra route first is probably the most cost effective as they probably aren't likely to live long enough to make up the difference in the long run without the permanent Part B late penalty. Laying out the comparison for the is the right thing to do but knowing a year is a long time, unless you know this prospect personally, you might not be the one to enroll him when that time comes.

I still think there is an open question as to whether or not there will be a Part B penalty at all if Cobra is used. The months of IEP do not count as "penalty months" for the Part B penalty. I think there is a potential that the same could apply to months of the employment SEP.

It is probably now too late because client's work open enrollment is probably gone, but if client is still able to work, the way to have controlled the situation for sure would have been to wait and terminate employment Jan 31, or Feb 28, 2024.

kgmom is a very strong Medicare presence, I highly doubt she will loose this client to another agent; particularly as client has medicine needs. You are a new forum member so you haven't seen history or posts, but OP's medicine knowledge is very, very strong and I believe it would be hard work for a Medicare Beneficiary to find another agent in Dallas that knows as much about Part D as kgmom does. (Also she is continuing to expand her office for client support so this person is not going to loose vision of kgmom's agency over the next year.) I see client death as the only reason kgmom will not carry on into Medicare with this person.

 

[goillini52]

I still think there is an open question as to whether or not there will be a Part B penalty at all if Cobra is used. The months of IEP do not count as "penalty months" for the Part B penalty. I think there is a potential that the same could apply to months of the employment SEP..

Do I Need Medicare Part B if I Have COBRA?
If you're working past 65 and retire later, you MUST enroll in Part B within the first eight months you have COBRA even if your COBRA stays active longer than eight months. This is because COBRA is not credible coverage for Part B.

 

[kstein]

If client has cobra they'll have to take part B asap. Cobra is secondary payer to Medicare.

They do have 8 months to decide to take part B without penalty

 

[LostDollar]

Caveat, NOT an agent.

Do I Need Medicare Part B if I Have COBRA?
If you're working past 65 and retire later, you MUST enroll in Part B within the first eight months you have COBRA even if your COBRA stays active longer than eight months. This is because COBRA is not credible coverage for Part B.

No. Taking Part B is not required.

"...It is recommended that you enroll in Part B within the first eight months you have Cobra........" would be the more appropriate statement.

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If client has cobra they'll have to take part B asap. Cobra is secondary payer to Medicare.

They do have 8 months to decide to take part B without penalty

Not true. They don't have to take it. The "normal" wisdom is that they should take it, but they do not have to.

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This is a cool thread.

@kgmom219 is presenting a situation in which it seems to be to client's advantage NOT to take Part B during the first 12 (or maybe 13) months after dropping employer health coverage from active employment.

In regard to the Part B LEP, the question I see OP's scenario posing is:

-----------------------------
Prospect age 72
Covered by employer health insurance to 12/31/2022
Takes Cobra for 12 (or maybe13) months, not sure which applies
Then enrolls in Part B either Jan 1 or Feb 1 2024.
----------------------------

Will that person have a lifetime monthly Part B penalty of 10% of the current year's Part B premium?

If the 8 months of the employment SEP count as months in which the person was not required to have Part B coverage, the answer is NO, there would be no penalty because there would only be 4 or 5 months in which Part B coverage was required.

If the 8 months of the employment SEP do count as months in which the person was required to have Part B coverage, the answer is YES, there would be a penalty because there would be 1 twelve month period in which the person should have had Part B coverage.

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The parallel for this is that months of IEP do not count as months in which a person was required to have Part B coverage when it is necessary to review the possibility of a Part B LEP.

[EXTERNAL LINK] - How Much is the Late Enrollment Penalty for Medicare Part B?

If you should have signed up for Medicare at age 65, the penalty calculation is based on the time that elapsed between the end of your IEP .......

( I don't believe the rest of the sentence in the article would be correct under 2023 rules-the point here is about the IEP.)

 

[goillini52]

Caveat, NOT an agent.



No. Taking Part B is not required.

"...It is recommended that you enroll in Part B within the first eight months you have Cobra........" would be the more appropriate statement.
........................................................................................................

Those are Medicare's words. They're saying you must take Part B to avoid the penalty.

 

[LostDollar]

age 134?

I don't know how to duplicate the age 134 computation.

I get age 112 using kgmom's assumptions.

Age 72, takes Cobra for 1 year, then takes Part B.
Now age 73, with 1 year penalty.
Prem 164.90 x 10% = approx penalty of $16 per month.

1 Year savings from using Cobra = $7,500.
Savings/penalty = 7500/16 = 468.75 months.
468 months / 12 = 39 years.
age 73 + 39 = age 112.

 

[LostDollar]

Caveat, not an agent.

Those are Medicare's words. They're saying you must take Part B to avoid the penalty.

I am not saying that Cobra is creditable coverage for purposes of avoiding Part B LEP's.

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I do believe OP's client in this situation I expressed before:

Prospect age 72
Covered by employer health insurance to 12/31/2022
Takes Cobra for 12 (or maybe13) months, not sure which applies
Then enrolls in Part B either Jan 1 or Feb 1 2024.

Would not have a Part B LEP because Part B coverage is not required during the 8 months of his Part B employment SEP. That would leave only 4 or 5 months when he was required to have Part B, but did not have it, and would not trigger a Part B penalty.

Whether or not the client has Cobra during the 13 months following the end of his active employment and related health insurance is totally irrelevant to the basis of my belief the client would not have a Part B LEP.

 

[goillini52]

Caveat, not an agent.



I am not saying that Cobra is creditable coverage for purposes of avoiding Part B LEP's.

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I do believe OP's client in this situation I expressed before:



Would not have a Part B LEP because Part B coverage is not required during the 8 months of his Part B employment SEP. That would leave only 4 or 5 months when he was required to have Part B, but did not have it, and would not trigger a Part B penalty.

Whether or not the client has Cobra during the 13 months following the end of his active employment and related health insurance is totally irrelevant to the basis of my belief the client would not have a Part B LEP.

LD, I'm going to leave you to debate this with yourself.