Medicare Part A action with existing employee insurance?

[Telly]

There isn't much detail on the Medicare website on this.

An employee (DW) is covered by a High-Deductible work plan. Employee turned 65 last year, and continues coverage under the work plan. The work plan meets the Medicare minimum requirements, and has over 1,000 people in it. Did not file for Medicare Part A, will file for Part A & B some time in the future when employment ends. The work plan has a deductible of around $2,750, and a MOOP (Maximum Out Of Pocket) of around $6,800.

Employee had a TKR earlier this year, has met deductible and has met MOOP, not surprising! Was scheduled for the second TKR, however, all that was shut down by Covid-19 preparations. Employee insurance year ends 8/31, questionable at this point whether TKR can be done by then. 9/1 and later would mean starting from scratch again on coverage.

So the research is to determine whether there any major benefits for the employee to sign up for Medicare Part A (Hospitalization), if it looks like the second operation will be post-8/31?

The medicare website says that the employee insurance will be primary, Medicare secondary. So I assume that would mean the first $2,750 of hospital expenses would go toward deductible, after $2,750 the insurance company pays it's usual 80%, the 20% that the employee would have to cover on their own gets passed on to Medicare. Does Medicare then invoke it's own Part A deductible of $1,300+ costs before they pay 80% of the remainder not paid by the work insurance? Or does Medicare run their Part A deductible concurrent with the work plan's deductible, and start paying their 80% with the arrival of the first remainder?

MOOP actions? It would seem that Medicare paying some of the remainder from employee insurance would mean that MOOP would get pushed out until the actual $ paid by the employee reached MOOP.

In typing this up, I realized that I don't know whether one can decide to start Part A while still employed, without a penalty, if one has run far enough past turning age 65. If one quits/gets laid off/retires over 65, I know it is a allowable event to pick up Medicare without penalty.

 

[MBSC]

Is the high deductible employer plan HSA eligible? If so, is the employee (DW) making HSA contributions? When a person over 65 enrolls in Part A, the Part A effective date is retroactive 6 months, but not before the month the person turned 65. The person may need to withdraw any HSA contributions applied to the retroactive months.

Understanding the Rules for People Age 65 or Older

Part A coverage begins the month the individual turns age 65, provided he or she files an application for Part A (or for Social Security or RRB benefits) within 6 months of the month in which he or she becomes age 65. If the application is filed more than 6 months after turning age 65, Part A coverage will be retroactive for 6 months.

NOTE: For an individual whose 65th birthday is on the first day of the month, Part A coverage begins on the first day of the month preceding their birth month. For example, if an individual's birthday is on December 1, Part A begins on November 1.

Source: https://www.cms.gov/Medicare/Eligibility-and-Enrollment/OrigMedicarePartABEligEnrol/index

Note:

Premium-free Part A coverage:

Begins 6 months back from the date you apply for Medicare (or Social Security/RRB benefits). To avoid a tax penalty, you should stop contributing to your Health Savings Account (HSA) at least 6 months before you apply for Medicare.

Source: https://www.medicare.gov/sign-up-change-plans/how-do-i-get-parts-a-b/should-i-get-parts-a-b

In typing this up, I realized that I don't know whether one can decide to start Part A while still employed, without a penalty, if one has run far enough past turning age 65.

The person can enroll in Part A at any time if they are over 65 and have primary employer insurance.

Enrollment Periods and When Coverage Begins

Individuals eligible for premium-free Part A can enroll in Part A at any time after they are first eligible for the coverage.

Special Enrollment Period (SEP) for the Working Aged and Working Disabled.

Individuals who do not enroll in Part B or premium Part A when first eligible because they were covered under a group health plan based on their own or a spouse's current employment may enroll during the SEP. The individual can enroll at any time while covered under the group health plan based on current employment, or during the 8-month period that begins the month the employment ends or the group health plan coverage ends, whichever comes first.

Source: https://www.cms.gov/Medicare/Eligibility-and-Enrollment/OrigMedicarePartABEligEnrol/index

The employer has 20 or more employees.

If you’re eligible for premium-free Part A, you can enroll in Part A at any time after you’re first eligible for Medicare. Your Part A coverage will go back (retroactively) 6 months from when you sign up (but no earlier than the first month you’re eligible for Medicare).

Source: https://www.medicare.gov/sign-up-change-plans/how-do-i-get-parts-a-b/should-i-get-parts-a-b

The medicare website says that the employee insurance will be primary, Medicare secondary. So I assume that would mean the first $2,750 of hospital expenses would go toward deductible, after $2,750 the insurance company pays it's usual 80%, the 20% that the employee would have to cover on their own gets passed on to Medicare.

The portion of the $2750 and 20% that was applied to the claim for inpatient hospital facility fees gets passed to Medicare Part A.

Does Medicare then invoke it's own Part A deductible of $1,300+ costs before they pay...

Yes, the Part A deductible of $1408 (2020) is applied first before Part A starts paying.

...before they pay 80% of the remainder not paid by the work insurance?

Part A does not pay 80% and does not have 20% coinsurance. Part A has a deductible and, for over 60 days in the hospital, specific dollar copay amounts.

Medicare Cost Sharing: https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance

Generally, after the Part A deductible is met, it will pay the remainder of the inpatient hospital facility fees (room and board, etc.) not covered by the primary plan.

There is no balance billing under Part A. If Part A sets the approved amount for the inpatient facility fees at $3,000, the patient is not responsible for any amount above this even if the primary insurance says coinsurance is due. Medicare balance billing rules apply even when it is secondary.

Any doctors contracted by the hospital but not employed by the hospital do not fall under Part A so only the group plan's coverage will apply to them. Sequence of events will be important. Consider if the primary plan's MOOP is met with all doctor's bills because they processed first. The primary plan then covers 100% of the hospital bill leaving nothing for Part A.

The person may not be an inpatient if they spend the night at the hospital. If they are kept overnight in observation status, Part A will not make a payment because observation is an outpatient (Part B) status.

MOOP actions? It would seem that Medicare paying some of the remainder from employee insurance would mean that MOOP would get pushed out until the actual $ paid by the employee reached MOOP.

There is no impact to the primary plan's MOOP calculation. How the cost sharing gets paid does not recalculate the MOOP.

 

[Z3Dreamer]

Never had a TKR. Is there an overnight stay that would use Hospitalization? Seems like everything is outpatient.

Another subject-Hospitalization (Part A) is free. Why not sign up in case?

 

[Telly]

MBSC, thank you for all the info! I think my #1 searching mistake was using the search tool on the medicare website itself, instead of using a search engine.
In the past I did so much investigating for myself about Part B, I forgot all about that Part A was not a coinsurance situation!

One part about deductibles that I'm not clear on...

The portion of the $2750 and 20% that was applied to the claim for inpatient hospital facility fees gets passed to Medicare Part A.

The pass-on of the 20% once above $2,750 that the employer medical will not pay I understand. It's the

The portion of the $2750

is the part I'm not understanding. Is Part A using some/all of the $2,750 to meet it's $1,408 deductible? I'm lost there...

The whole inpatient vs. outpatient issue on whether Part A can even be invoked I understand. Well in advance, the surgeon said it could be an in and out the same day (outpatient). However, it would depend on the patients state, and I think what time of day the surgery was scheduled for. The surgeon also said staying over a night was no problem. DW's employer insurance would pay either way. I wanted to have her stay over night. I can not believe that with the seriousness and intricacy of that operation, that someone 65 years old would just be sent out the door after a few hours of recovery, loaded up on all sorts of drugs. Scary. In admittance DW stated to the hospital's intake person that her doc had said she would be staying the night, and DW thinks that she was indeed "admitted" at that time. If she instead was on Medicare only, would a night have been allowed? I don't know. I would like to think that the surgeon as the medical professional on the spot, with all the patients info and condition, would always be the judge of that. In retrospect, we never asked how many of the patients went home without staying a night. We do know that some go on to an outside recovery place for days... we assumed those were the very elderly or bad shape going-in people.

 

[Telly]

Another subject-Hospitalization (Part A) is free. Why not sign up in case?

I thought I would look into it to see if/how much benefit Part A would add, versus adding another level of complexity. If it would turn out to be an odd-path billing nightmare, then would probably skip adding in Part A at this time.

One new piece of info... I'm holding off starting SS till I'm 70 to maximize benefits for DW if I kick the bucket long before her. But once she reaches FRA, she might as well claim SS on her own record while still working to get some $ out of it before she eventually retires. When she retires and starts her "governmental" pension, her SS will get well-WEP'd. The actual new piece of info is that I just read that starting SS at age 65 or above automatically starts Medicare. I know that one can send back the Medicare card along with form #whatever to decline Part B to a later date, but I don't think one can decline Part A. Or maybe I just haven't found that stipulation detail yet. If it can't be declined, then whether to add Part A while still working will be a moot point, if she wants the pre-Wep'd SS $. After she starts her pension, she would claim on my account, and her additional in effect would be GPO'd. Isn't this all so easy and clear?

 

[MBSC]

One part about deductibles that I'm not clear on...
The pass-on of the 20% once above $2,750 that the employer medical will not pay I understand.

Is Part A using some/all of the $2,750 to meet it's $1,408 deductible? I'm lost there...

It depends on the order in which the primary plan processes the claims. When its deductible resets to $0 met on 9/1, the new $2750 deductible will be applied to the first claim(s) processed. If your DW is admitted as an inpatient and the hospital's inpatient facility claim is the first to be processed, the $2750 deductible will be applied to it. In this scenario, the $2750 and any additional coinsurance assigned to that particular claim will be passed to Part A. The $2750 is applied toward Part A's $1408.

OTOH, if the first claims processed are for the surgeon and anesthesiologist, the primary plan's deductible will be applied to those claims. By the time the inpatient facility claim processes, the deductible will have been met and only the 20% coinsurance will be applied to that particular claim. Therefore, only the 20% coinsurance on that claim is passed to Part A.

 

[Telly]

Got it! Thanks for all the help, MBSC, I really appreciate it!