Losing Well Part 23

Continuation of my series, Losing Well. Part 1 can be found here.


November 13, 2014
Two years after I went out on leave due to my visual disability, I got a letter in the mail welcoming me to Medicare. A lot of people are, understandably, very happy when this day comes. Me? Not so much.

I didn't request to participate in Medicare. The government just automatically signed me up for Medicare Plan A and Plan B. Plan A is free to me and covers hospital stays. Plan B will cost me $104 a month, increases yearly, and is a major medical plan. To get a truly functional health plan I'd need to pay for Plan C; a Medicare Advantage plan offered by an HMO/PPO.

Thing is, I don't need Medicare. I have insurance already through my employer. And since my plan provides for my family, I'm not making any changes. So clearly I'm not going to pay for Plan C - I don't need two complete health policies for one person. And Plan B looks redundant and not worth the expense. I'll keep Plan A because it literally isn't possible to cancel.

So here's the rub, the government has built in an incentive to try and force me to sign-up for Plan B. If I don't sign up when Plan B is first made available and I want to sign-up at a later date, there will be a penalty. Plan B will go up 10% in cost for every year that I'm eligible but didn't participate.

So If ten years from now I lose my employer based insurance and want to get Plan B it will cost me $208 (in 2014 dollars) instead of $104. A month, every month! If I wait 15 years, it will cost $260. Remember this is just for a major medical plan, not an actual health plan. I'd still have to pay for Medicare Advantage separately.

I talked to the Social Security administration and they confirmed that there is no cap to the 10% yearly penalty. They said it would reset when I hit 65, over two decades from now. In theory I could end up having to pay more than 240% in penalties on a monthly basis if I lose my employer based insurance.

But isn't that why we have the affordable care act? If I lose my insurance I can just jump on healthcare.gov and buy a plan from the exchanges. But I can't. Since the government signed me up for Medicare, I lost the ability to buy insurance on the open market. Providers are only allowed to sell me Medicare Advantage plans, which I have to purchase Plan B to qualify for.

Normally, Medicare doesn't impose the Plan B penalty on people who have employer based insurance. But for some unexplained reason, people in my situation do not qualify for the penalty exemption based upon how the IRS taxes my income.

So I'm left with a choice. If I waive Plan B the government will start adding the fees onto to my hypothetical premiums. Which wouldn't matter as long as I keep my employer based insurance. But we live in uncertain times. My employer is not required by law to allow my participation on their health plan. And I assume they could remove me from it. This might get them some bad press but other companies have removed insurance access to their disabled/retired employees.

So until I hit the age of 65, will I really be able to participate in my employer's plan? I hope so. But can I realistically count on it? Since I will not be allowed onto the open market to purchase a health plan, it's hard to see how I do anything but pay the Plan B $1,250 yearly fee.

I might be able to make back a small percentage of the Plan B premiums if Plan B covers my employee based insurance policy co-pays. But the vast majority of my Plan B premiums are going to be wasted on a product I'm already purchasing. I'm essentially buying Plan B as a hedge against my actually insurance plan going away. Plan B is functioning more as very expensive liability insurance. On my insurance.

Oh, well. My family didn't need that money anyway.


To be continued. . .