TONI SAYS: Why is COBRA only paying 20% of my Medicare claim?

By Toni King

Toni,

I need your Medicare guidance because in December, I was rushed to the emergency room because of kidney failure caused from stage 4 prostate cancer which has spread to my pelvic bones.

Because I was working full-time, in January I took a leave of absence with short-term disability for 60 days while receiving my cancer treatment which ended on February 28.

I was informed while in the hospital that I had qualified for long-term disability and would no longer be part of the company's health plan since I was not a full-time employee. COBRA would begin immediately.

I enrolled and paid for COBRA to continue with medical care where I am having cancer treatment. It took 6 weeks to get the paperwork to Social Security for Medicare Part B to begin May 1st which it has since I was not working full-time. Now my COBRA nightmare begins!

Because I was not enrolled in Medicare Part B, COBRA is only paying 20% of my medical bills and I was billed the 80%, which has totaled over $40,000. Please help me solve this COBRA financial nightmare. Thanks, Toni.

--Robert

Hello Robert:

Those reading this article need to realize the seriousness of Medicare and insurance rules. The Medicare & You handbook discusses topics such as "Special Enrollment Period" and "Should I Get Part B?" It states that "COBRA" is not considered "coverage" based on current employer benefits.

You have 8 months to sign up for Medicare Part B without a penalty if you are not "working full-time or have lost your company benefits, whichever comes first." The 8-month period will run whether you choose COBRA or not. COBRA has an 18-month benefit period.

If you choose COBRA, do not wait until your COBRA ends to enroll in Part B. The COBRA benefit period is longer than the 8-month Medicare Special Enrollment Period, and you may receive the famous "Medicare Part B penalty" which goes all the way back to when you enrolled in Medicare Part A.

Robert, you did everything correctly to enroll in Medicare Part B by contacting Social Security and faxing the CMS-L564 form "Request for Employment Information," signed by your company's human resources department, and CMS-40B form "Application for Part B." Fortunately, at least, you were still within the correct time limits for your Medicare Part B to begin May 1st.

You are in a Medicare "glitch" and the COBRA health plan is using "Coordination of Benefits" as their ruling. (Chapter 1 of Toni's Medicare Survival Guide Advanced edition explains various ways of enrolling in Medicare in detail.)

Group health insurance plans are state-regulated, not Medicare regulated. Since you are past 65 and already enrolled in Medicare Part A, the health plan is passing the 80% of the doctor/medical bills on Part B to Medicare. You were not enrolled in Medicare Part B from March 1 to April 30 for Medicare to pick up the difference.

A bit of good news is that COBRA plans are a creditable prescription drug coverage plan, and you are eligible for a Special Enrollment Period of 63 days to enroll in a Medicare Part D plan without receiving a Part D penalty. Please enroll in your Part D prescription drug plan ASAP.

Remember, with Medicare what you don't know WILL hurt you!

Toni King is an author and columnist on Medicare and health insurance issues. If you have a Medicare question, email [email protected] or call 832-519-8664.

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