A health decision timeline for retirement

1. RETIREMENT PLANNING
Health and Benefit Timing
AT AGE 60
Written by JAN NEAL

2. This publication is made available by a grant provided by The Centers for Medicare and Medicaid
Services and The Alabama Department of Senior Services to The South Central Alabama
Development Commission, Aging and Disability Resource Center, offering State Health Insurance
Program (SHIP) services to assist Medicare beneficiaries and their families to realize maximum
benefits from Medicare.
Warning: This booklet is being published at a particularly
volatile time as it relates to insurance availability and options
as health care coverage is changing nationally and on the local
level at an unprecedented rate and accelerated pace. While
information provided herein is general in nature, it is not
intended to be a substitute for direct individual counseling. For
that reason please check with your local SHIP program before
relying on information contained herein and to obtain the most
current information available to suit your individual needs.
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3. State Health Insurance
Progam (SHIP) Services
Retirement can be a dream come true or a terrifying
nightmare depending on individual circumstances. In
order to maximize his or her options, a person planning
for full or partial retirement needs to plan well in
advance and to consider the decisions that will need to be
made before that time comes. Many people do not
recognize the extent to which retirement needs to be
coordinated with health care coverage. This booklet is
offered to give an overview of what retirees need to
know in order to time retirement with maximum options.
EFFECTIVE MAY 2013
WHAT TO DO
AT ALL AGES
4
AT AGE 50
6
This booklet is also an invitation to you to contact the
SHIP services if you have any questions or concerns
about Medicare issues or other retirement issues raised in
this booklet if you live in Bullock, Butler, Crenshaw,
Lowndes, Macon and Pike Counties, Alabama.
AT AGE 60
8
AT AGE 64
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SHIP is a program that provides assistance to Medicare
beneficiaries. Counselors are available to help those
enrolled in Medicare make informed decisions regarding
health insurance; are not affiliated with any insurance
companies; they will not attempt to sell you insurance.
Counseling is confidential. SHIP is a partnership with
the Centers for Medicare and Medicaid Services, the
Alabama Department of Senior Services, South Central
Alabama Development Commission and Davis & Neal,
Attorneys at Law.
AT AND AFTER
AGE 65
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1-800-243-5463 or
1-800-270-7635
Additional Help at
1-800-Medicare
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4. It Is Never Too Soon To Think
About Retirement Planning:
What to do at all ages
According to the U.S. Department of Labor,
the average American will spend 20 years
in retirement. While the current economy
may change the long accepted retirement
landscape - resulting in delayed or
eliminated retirement as we have known it
in the past - it is a current reality that most
people will spend a number of years living
past their peak work performance years.
That time period may be one-fourth to onefifth of a person’s life, which is a
significantly high percentage of a person’s
total life.
Acceptance of that reality
demands attention to retirement planning.
Perhaps the first step in retirement
planning is simply acceptance of the actual
need to plan.
Retirement decisions begin the moment a
person enters the work force. Though most
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people do not recognize that fact, it is
important that younger workers realize that
decisions today impact quality of life later in a
very real way.
Early planning involves saving, contributing to
employer retirement plans or setting up one’s
own plan if not offered by an employer. Early
planning means working on, rather than off, to
pay into the Social Security and Medicare
systems to acquire access to those benefits if
disability should happen and when retirement
becomes a reality. Planning early also means
being insured for health purposes and getting
adequate health care to increase the likelihood
of better health during retirement.
Basic financial decisions during youth are the
foundation for a good retirement. Paying off
debt, saving and investing and becoming

5. educated in financial and health issues are
essential long before a person is facing
retirement.
Nonetheless it is never too early or too late
to make good decisions that will impact on
the retirement years.
Workers of all ages need to understand the
type of retirement plan offered by an
employer so that appropriate participation
can be initiated. Multiple types of employer
plans exist. Retirement plans are generally a
type of employee benefit plan to provide
retirement income or to defer income until
termination of covered employment.
Another employee benefit plan, called a
welfare plan, is established to provide
health, disability, death, prepaid legal,
vacation benefits and other benefits of this
type.
Whatever type of retirement plan a person
has, it is important to understand the plan
structure, including how it will pay and
when. Talk with your employer’s benefit
manager to obtain information about how
the plan works. It is important to keep all
documents related to employer benefits
when received for future reference.
In the past Social Security mailed to workers
Your Social Security Statement so that
earnings posted to Social Security accounts
could be verified and workers could get an
idea of how much they could draw at age
62, full retirement age, at age 70 and in the
event of disability. Statements also provide
information on Family and Survivor benefits
and eligibility for Medicare. Now that
information can be obtained online at the
Social Security website:
(www.ssa.gov/myaccount/)
where you can set up a mySocialSecurity
account.
In
2012
when
The
Social
Security
Administration
announced
the
online
statement availability it announced that the
agency would still send paper statements to
workers at age 60 and older who have not
started drawing benefits. The agency planned
to send paper statements to all workers in the
year they turn 25.
At all ages workers need to make sure that
their earnings records are accurate and that
they have been given credit for time worked
for Medicare purposes.
It is essential to
become fully insured so that a worker has
Medicare coverage for disability and/or
retirement.
U.S. citizens or persons who have resided
legally in the U.S. for five nonstop years
qualify for Medicare.
The average
American will spend
20 years in
retirement, up to
one-fourth to onefifth of his or her life
“When you retire, think and act as if you were still working; when you're still working,
think and act a bit as if you were already retired.” ~Author Unknown
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6. AT AGE 50
Lay the Groundwork for an Informed Retirement
Now is the time to seriously sharpen the pencil
and start planning for when you can retire or
will have to retire due to health reasons. Now
is the time to begin looking at how you will
fund retirement, where you will live, how you
will have health care coverage and what you
will do in the event you or your spouse should
become disabled.
Educate yourself concerning retirement with an
emphasis on health insurance coverage.
Pay down debt now.
Many people are
financially compromised due to credit card debt
and home equity lines of credit, rendering them
with no options when retirement age comes. It
is tragic to see a person who borrowed to
maintain their home now facing a home equity
line he or she cannot afford to pay. People in
this situation have to move to less expensive
housing.
and anticipated benefits as well as check your
earnings posted to your account. You will be
set to apply for Social Security and Medicare
when the time comes, and you will already be
familiar with the system.
Begin planning for the possibility of needing
long-term care. Understand how financing
long-term care will effect your estate and what
assets will be at risk, recognizing that nursing
home care can easily cost $70,000 per year now.
That cost will be higher in the future. Become
knowledgeable of Medicare and Medicaid
coverage of long-term care and determine if you
or your spouse will qualify. If you decide to
purchase long-term care insurance do it now
while it is affordable. It will be a great deal
more expensive if you wait until you are older.
Become familiar with health insurance options,
if available, through your employer when you
retire and how those benefits will work with
Medicare. Determine how a younger spouse
will be insured for health. Understand now
that even though you may get Medicare at age
65, your spouse who has not become fully
insured on his or her own will not be covered
through your Medicare until he or she reaches
age 65.
Find your Social Security card and set up your
mySocialSecurity online account.
You can
obtain information there about your account
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Become familiar with your income sources for
retirement and explore all public benefits.
Decide where you want to live and look at the
cost of living realistically. Make home repairs
that you can afford now without running up
long-term debt that you may not be able to

7. afford when your income is lower. This will benefit you whether
you stay in your home as long as possible or chose to sell it.
Make sure you have clear title to your property and are free to
sell it if you choose. Many people inherit property from relatives
without obtaining clear title. This type of ownership is known as
heir property. It means that the property passed without a will
being probated or an estate administered through the probate
court. While the owner/owners of heir property in fact have the
right to occupy it and the duty to pay tax on the property, they
cannot sell or otherwise transfer title of the property if there is
not a clear legal description of the property. Sometimes a survey
is necessary or other real estate and probate transactions. The
important point to remember for retirement planning purposes is
that you need to be able to dispose of property however you
wish, so checking your deeds and title is an important element of
retirement planning.
This is a good time to have a power of attorney and will and to
review all of your beneficiary designations and joint accounts to
determine how those assets can be handled in the event of your
disability or how they will pass if unchanged prior to your death.
You cannot properly prepare your will without knowing what
property will pass as probate property and what will pass
without probate (generally jointly owned assets and real estate
titled as joint tenants with right of survivorship).
A power of attorney needs to name a financial decision maker
for your business affairs (attorney in fact), a health care decision
maker for routine medical decisions and someone to make end of
life decisions if you should become permanently unconscious or
terminal.
Purchase pre-paid burial arrangements and make sure your
wishes are designated and made known to family members. By
purchasing pre-paid services, you can freeze the cost of burial at
today’s prices realizing that the cost will only increase in the
future.
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8. AT AGE 60
Decide When to Draw Social Security
When you turn 60 you will need to decide
when you plan to apply for Social Security
Retirement Benefits. To make an informed
decision you need to take health care into
consideration because even though you can
draw Social Security at a reduced rate at 62,
you will not have Medicare coverage until
age 65. Considering the health care coverage
for your spouse will also be part of the
decision-making process.
You need to determine your full retirement
age. This is the age, based on the year of your
birth, when you can draw full Social Security
Retirement Benefits without any reduction in
the amount you draw.
Full Retirement Age
Full retirement age is no longer 65. For
persons born between 1943 and 1954, their full
retirement age will be 66 years, not the
traditional (original) 65. For persons born from
1955 – 1957 their full retirement age will be:
Year of Birth
Full Retirement Age
1943 - 1954
66 years
1955
66 years
months
and
2
1956
66 years
months
and
4
1957
66 years
months
and
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8
It is important to know your full retirement
age because if you draw Social Security
Retirement Benefits before reaching full
retirement age, you will draw reduced
benefits, in fact 25 – 27.5 percent for workers
and 30 – 32.5 percent for the spouse. These are
significant enough percentages to persuade
many people to wait until full retirement age to
draw benefits.
Delayed Retirement Credits
Another incentive to delay drawing Social
Security Retirement Benefits is the Delayed
Retirement Credits available to those who wait
until age 70 to take their benefits. The credits
will result in an 8 percent increase in benefits

9. drawn.
Earned Income Offset
If you continue to work while drawing Social
Security Retirement prior to full retirement
age, your benefit may be reduced. This is
referred to as the Earned Income Offset.
If you are under the full retirement age for
the entire year of 2013, Social Security will
reduce your benefit amount $1.00 for every
$2.00 you earn over $15,120 for the year. For
the year you reach full retirement age Social
Security considers the earnings you had
during the months prior to turning full
retirement age. If, during those months
during 2013, you earn over $40,080 you will
lose $1.00 for every $3.00 over $40,080.
Starting the month you reach full retirement
age, you will receive your full benefits no
matter how much you earn.
and the availability of benefits for these
categories go beyond the scope of this
booklet. But do be aware that spouses,
children, and ex-spouses (those who
remained married to the worker for ten years)
may qualify for benefits. Contact your local
Social Security office for information about
your spouse’s potential benefits or benefits
for yourself if you are the spouse or ex-spouse
of a fully insured worker.
Spousal and Dependent Benefits
It is important to check into any potential
benefits available for a spouse. There are
multiple categories of Social Security benefits
for survivors and dependents of workers,
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10. AT AGE 64
Understand the Medicare Application Process
The Medicare A, B & D Initial Enrollment
Period
The critical time to apply for Medicare is a
seven month period that starts 3 months
prior to your 65th birthday, the month of
your 65th birthday and 3 months following
your 65th birthday.
This is called the
Medicare Initial Enrollment Period. If you
are drawing Social Security Retirement
Benefits, you will automatically be enrolled
in Medicare Part A and Part B. You will
receive a “Welcome to Medicare” kit in the
mail which will include your red, white and
blue Medicare card.
You will decide
whether or not to opt out of Part B. If you
opt out, sign the card and return it to Social
Security.
If you are not drawing Social Security
Retirement Benefits, you will need to contact
Social Security to enroll in Medicare during
this Initial Enrollment Period.
The Parts of Medicare
First you need to understand that the parts of
Medicare to make decisions about what you
need. The parts are as follows:
Part A is hospital coverage, a small amount
of skilled nursing facility care, home health
care and hospice care for the terminally ill.
Part B pays for doctors' services, outpatient
hospital care, and home health care that Part
A does not pay for. It also pays for lab tests,
medical equipment, orthotics, prosthetics,
mental health services and ambulance
services.
Part D pays for prescription drug coverage.
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Part C of Medicare, called Medicare
Advantage, is a delivey system of managed
care through private health care plans.
Unless you sign up for a particular plan, you
will have Original Medicare which includes
Parts A and B. You will need to sign up for
Part D separately with a private insurer.
When you do sign up for a Medicare
Advantage plan you will need to be sure that
the plan provides you with the coverage you
need in your geographic area and that your
physicians will accept the plan for payment.
Penalties for Late Enrollment
If you do not accept Part B when you are first
eligible (unless you are working and covered
by your employer or have VA coverage) you
will be penalized when you do apply for Part
B. The late penalty is a 10 percent increase in
the premium cost for every 12 months you
did not have coverage but were eligible. The
monthly premium in 2013 is $104.90 for most
persons (higher for persons with income at or
above $85,000 and single or $170,000 and
married). So if you were eligible for Part B in
2012 and did not get it, your premium would
be $115.39. If you waited two years, you
would always pay 20 percent more than the
monthly cost of Part B, and so on, for life.
If you do not accept Part D when you are first
eligible (unless you are working and covered
by your employer or have VA coverage) you
will be penalized when you do apply for Part
D. The late penalty is 1 percent of the average
monthly prescription drug premium (1
percent of $31.17 in 2013, or 31 cents) for
every month you are late in applying for Part
D, and the higher premium penalty will
remain in effect for life.

11. Medigap Enrollment Period
When you become enrolled in the Initial
Enrollment Period, Medicare coverage begins
as follows:
For enrollment during the 3 months prior to
age 65, coverage begins the month you turn
65;
For enrollment the month you turn 65,
coverage begins one month following the
month you turn 65.
For enrollment during the first month
following your 65th birthday, coverage begins
the third month following your 65th birthday.
For enrollment during the second month
following your 65th birthday, coverage begins
the fifth month following your 65th birthday.
For enrollment during the third month
following your 65th birthday, coverage begins
the sixth month following your 65th birthday.
Medigap is coverage to supplement Medicare.
You need this because Medicare does not pay
at 100 percent. There are copayments and
deductibles for which you need insurance.
You have 6 months from turning 65 to enroll in
a Medigap policy without the insurance
company reviewing your health. Anyone can
get coverage during this period. It is called the
Medigap Open Enrollment. You need to find a
Medicare Supplement during this time period.
If you are still working when you turn 65
If you are still working when you turn 65 and
are NOT drawing Social Security Retirement or
Disability Benefits, you will need to enroll in
the parts of Medicare you want yourself.
If you are still working when you approach
age 65, and if you have health insurance
coverage provided by your employer, it is time
to determine whether or not to at least apply
for Medicare Part A. Chances are that if you
work for a company with 20 full-time workers
and you or your spouse have health insurance
through the company for current work, you
may or may not need to apply for Medicare
Part A. That will depend on the type of
coverage you have with the company. It is
important to talk with the health insurance
administrator to determine whether or not you
need to apply for Medicare Part A. Some
companies continue to provide benefits to
currently working persons at 65, but many
companies change the type of coverage with
the group coverage supplementing Medicare.
Only your company can provide you with this
information.
While most current workers will need to apply
for Medicare Part A, some companies provide
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12. Health Savings Accounts (HSA) through
which the company pays contributions.
Workers in those arrangements are an
exception to the rule, and they may not want
to be covered by Medicare Part A so that the
employer will not stop making contributions
to the HSA. Individual decisions will be
made based on available employer health
coverage, so this is a situation where each
person will need to study his own individual
options. And since different companies
provide different health benefits it is critical
to coordinate with the company what to do
when you become Medicare eligible.
Medicare B & D Special Enrollment Period
If you were working when you turned 65 and
did not enroll in Medicare Parts B and D
because you had employer provided
coverage, you need to enroll within 8 months
after you stop working to avoid being
penalized for missing the Initial Enrollment
Period. You will also have the right to enroll
in Medigap coverage during this time
without your health record being reviewed.
If you missed your Initial Enrollment Period
(IEP) because you were working and covered
by a group health plan, then you can use your
Special Enrollment Period. If you enroll in
Medicare in the fourth month following your
65th birthday, coverage can begin in the fifth
month following your 65th birthday, and if
you enroll in Medicare in the fifth month
following your 65th birthday, coverage can
begin in the sixth month following your 65th
birthday.
There are circumstances other than
continuing to work and being covered by a
group health plan that will permit a person to
use a Special Enrollment Period (SEP). If you
had VA health coverage you will be allowed
to enroll in a drug plan under Part D during a
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Special Enrollment Period.
Other circumstances that will permit you
to enroll when you missed the Initial
Enrollment Period include:
•
•
•
•
Moving out of the area where the
plan in which you are currently
enrolled will pay,
Entering, leaving or living in a
nursing home, OR
Your plan changes and no longer
serves your area, OR
You become eligible for Extra Help,
a program discussed later in this
booklet.
Medicare A and B
General Enrollment Period (GEP)
If you missed the Initial Enrollment
Period, and the Special Enrollment Period
does not apply to you, you will have to
wait until the General Enrollment Period
(GEP) which occurs for Medicare A and B
every January 1 – March 31. Coverage will
begin in July.
Medicare Advantage Disenrollment Period
(MADP)
If you are already in a Medicare
Advantage plan and decide that you want
to get out of the plan and go to Original
Medicare, you can make that change every
year from January 1 – February 14.

13. Medicare D Open Enrollment Period (OEP)
October 15 – December 7 of each year you can
sign up for a prescription drug plan to work
with your Original Medicare A and B or initially
enroll in or change coverage from one
Advantage Plan to another.
Health Insurance for Spouses
Medicare does not provide dependent coverage,
so determining when to retire can be strongly
influenced by the insurance needs of one’s
spouse. It is not uncommon to see people delay
retirement in order to retain health insurance
coverage for dependents.
There are some companies who offer retiree
medical benefits that cover spouses, but it is rare.
Be sure of the coverage available to you and your
spouse prior to leaving employment.
Many companies, especially those with more
than 20 employees, are required to offer COBRA
continued coverage to a spouse for 18 to 36
months following loss of coverage due to the
worker retiring. Check with your employer.
But COBRA is expensive, and you will have
to pay the full price of the monthly
premium (your share and the share your
employer may have previously paid) plus
an administrative fee.
The Alabama Health Insurance Plan (AHIP)
is offered by the state to allow individuals
who are have lost coverage through an
employer group plan or who have run out
of COBRA coverage to obtain insurance.
Check with that agency to determine
application options.
Another option for your spouse in the
future may be to apply for coverage
through
the
Pre-Existing
Condition
Insurance Plan (PCIP) program run by the
U.S. Department of Health and Human
Services.
Though currently suspending
applications as of March 2, 2013, until
further notice, the program is a federal
effort to provide coverage opportunities for
persons with pre-existing conditions. To
participate a person must be a citizen or
lawfully present in the U.S., have been
uninsured for six months prior to
application and have a pre-existing
condition or have been denied coverage
because of a health condition. PCIP covers
a broad range of health benefits and
currently costs $359 per month for persons
over age 55. PCIP has a $2,000 annual
medical deductible, and a $500 annual
prescription drug deductible. After meeting
the deductible, the insured will pay 30% of
medical costs for in-network services.
While applications are currently suspended,
the program is providing coverage to more
than 100,000 persons nationwide.
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14. At and After Age 65
Qualified Medicare Beneficiary (QMB)
Extra Help through Medicare Savings Program (MSP)
Help Paying For Medicare’s Uncovered Expenses
If you think you may qualify, contact your SHIP Program
There are many expenses that are not
covered by Medicare.
These include
deductibles and copayments.
To be
adequately insured you either need to join a
Medicare Advantage plan or obtain
Medigap
insurance
to
supplement
Medicare. There are programs that can help
Medicare beneficiaries pay the coverage not
provided by Medicare.
Medicare Savings Programs (MSP)
There are programs available through The
Alabama Medicaid Agency that help
Medicare recipients with lower income pay
for their health care expenses.
These
programs are based on income only. While
most states also have a resource limit,
Alabama does not. So no matter how much
you have in savings, land you don’t live on,
investments, you can qualify for MSPs if
your income is low enough.
Qualified Medicare Beneficiary (QMB)
If your income is less than $978 for a single
person or $1313 for a married couple living
together, you may qualify for QMB. This
program will pay your Medicare Part B
premium (104.90 for most persons), and any
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deductibles and copayments Medicare
does not pay. In other words, QMB acts
like a Medigap preventing those eligible
from purchasing Medigap coverage.
If one spouse is Medicare eligible and the
other spouse is not, first make sure the
applying spouse meets the single income
standard, and then determine that the
couple meets the couple standard.
Specified Low Income Beneficiary (SLMB)
If your income is less than $1169 for a
single person or $1571 for a married couple
living together, you may qualify for SLMB.
This program will pay your Medicare Part
B premium (104.90 for most persons) only.
If one spouse is Medicare eligible and the
other spouse is not, first make sure the
applying spouse meets the single income
standard, and then determine that the
couple meets the couple standard.
Qualified Individual – 1 (QI – 1)
If your income is less than $1313 for a
single person or $1765 for a married couple
living together, you may qualify for QI-1.
This program will pay your Medicare Part

15. B premium (104.90 for most persons) only.
If one spouse is Medicare eligible and the other spouse is not, first make sure the applying spouse
meets the single income standard, and then determine that the couple meets the couple standard.
It is important to determine if you qualify for Extra Help first under the MSP because that
program overlaps with income limits of Low Income Subsidies (see below), but there are no
resource limits to meet for MSP in Alabama. For that reason a person whose resources are too
high for LIS may still qualify for MSP, and he or she will get more coverage through MSP than
through LIS.
To calculate your income for MSP first determine if any of yours or your spouse’s income is from
work using the gross pay for a job or net income for self-employment, subtract $65.00, divide by
two and then add any other income.
Extra Help through Low Income Subsidies (LIS)
Help Paying for Prescription Drugs
If you are Medicare eligible with lower income and assets, you may qualify for Extra Help in
paying for prescription drugs through a program known as Low Income Subsidies (LIS). As a
general rule, it means that most people who qualify will have either no premiums and deductibles
or reduced premiums and deductibles, and they will pay limited copayments for each prescription
drug.
Due to the complexity of the Extra Help programs and the income requirement overlap between
MSP and LIS , it is a general rule to first see if you qualify for MSP because it covers more and has
no resource limits. The second general rule is that if you do not qualify for MSP, you should apply
for LIS if your monthly income is at or below $1456.25 if single/$1958.75 if married and your
resources are at or below $13,300 if single/$26,580 if married.
The LIS program covers the following groups of people with FULL low-income subsidy:
People eligible for Medicare and Medicaid who live in long-term care facilities or receive home
and community based services. These people do not need to apply for LIS because they receive it
automatically. They pay no monthly premium, no annual deductible and no copayments for
drugs.
People eligible for Medicare and Medicaid, who have income at or below 100 percent of the
poverty level which, in 2013, is $977.50 if single and $1312.50 if married. These individuals, too,
automatically receive LIS and pay no monthly premium or annual deductible. Their copayments
are $1.15 per generic drug and $3.50 per name brand drug. If you have additional relatives living
in your home for whom you pay more than one-half of their support, the income limit is increased
by $335.00 per person.

16. People who are eligible for Medicare with income at or less than 135 percent of the poverty level,
which, in 2013, is $1312.63 if single and $1764.88 if married and with resources at or less than
$8580 if single and $13,620 if married. They pay no monthly premium, no annual deductible, and
their copayments are $2.65 per generic drug/$6.60 per brand name drug. After reaching an out-of
pocket expense of $4750 they pay nothing for drugs. If you have additional relatives living in your
home for whom you pay more than one-half of their support, the income limit is increased by
$452.25 per person.
The LIS program covers the following group of people with PARTIAL low-income subsidy:
People who are eligible for Medicare with income at or
below 150 percent of the poverty level which, in 2013, is
$1456.25 if single and $1958.75 if married and have
resources at or less than $13,300 if single and $26,580 if
married. These people need to apply. They will pay a
$66.00 deductible and 15 percent for copayments. After
reaching an out-of-pocket expense of $4750 they pay
$2.65 for generic drugs and $6.60 for brand name
drugs. If you have additional relatives living in your
home for whom you pay more than one-half of their
support, the income limit is increased by $469.00 to
$502.50 per person depending on your income amount.
When in doubt, contact the SHIP program for
screening.
To calculate your income for LIS first determine if any
of yours or your spouse’s income is from work using
the gross pay for a job or net income for selfemployment, subtract $65.00, divide by two and then
add any other income.
If other persons live in your home there are increased
allowances for income besides yours and your spouse’s
income.
To calculate your resources, do not count your home or land attached to it, your vehicles,
household personal property or life insurance.
Call the SHIP counselors for help with any of the Extra Help Programs. If you think you may
qualify you may be screened and helped in filing an application.
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17. Coordinating Medicare with Other Insurance
When you have health insurance other than
Medicare, it is important to know which
insurance pays first, making it the primary
payer, and which pays second, making it
the secondary payer.
Coordination of benefits is too large a
subject to be covered in detail here, but
some rules of thumb for large coverage
categories will be provided. Understand
that the complexity of coordination of
benefits requires a careful reading of all
insurance documentation for detailed
answers to coverage.
Medicare and PEEHIP (Alabama Public
Education Retirees)
For those eligible for PEEHIP, Medicare
becomes the primary payer, and PEEHIP
secondary on the day of retirement. It is
critical that the person with PEEHIP have
both Medicare A and B to assure adequate
coverage with PEEHIP. It is not necessary
to sign up for a Medicare D prescription
drug plan, however, if enrolled in PEEHIP
Medicare Plus Coverage because as of
January 13, 2013, PEEHIP automatically
planned to enroll all Medicare-eligible
members and dependents in the Medicare
Generation Rx Medicare Part D program
unless the person is enrolled in a separate
Part D plan.
Medicare and SEHIP (Alabama State
Employee Retirees)
For those eligible for SEHIP Medicare
becomes the primary payer, so the retiree
and/or dependent should have both Part A
and B. Effective January 13, 2013, SEHIP
prescription drug coverage for Medicare
retirees changed to the SEHIP Employer
Group Waiver Plan (EGWP).
Medicare and TRICARE
TRICARE for Life (TFL) is TRICARE’s
Medicare’s wrap around coverage which is
available when a TRICARE eligible
individual is eligible for premium free
Medicare Part A and Part B. To remain
eligible for TRICARE you must be enrolled
in Medicare Part A and B.
Other persons who can have Medicare and
TRICARE include persons who are
dependents
of
active-duty
service
members who have Medicare for any
reason, people under 65 with Medicare
Part A because of disability or End Stage
Renal Disease and with Medicare B.
As a rule of thumb, Medicare pays first for
Medicare-covered services, and TRICARE
will pay the Medicare deductible and
coinsurance as well as for any service not
covered by Medicare but that is covered by
TRICARE. If services are provided in a
military hospital or provided by other
federal health care providers, TRICARE
will pay for those services.
Medicare and Veterans Benefits
You may qualify for both Medicare and
Veterans health care benefits. If you get
treatment outside the VA system, you
either need coverage through Medicare or
you need to get VA approval.
When you have coordination questions,
contact your SHIP counselor at 1-800- 2707635.
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18. NOTES
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