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

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 Feb. 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 because 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 six weeks to get the paperwork to Social Security for Medicare Part B to begin May 1, 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 eight 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 eight-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 eight-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 request for employment information form signed by your company's human resources department and the application for Part B. Fortunately, at least, you were still within the correct time limits for your Medicare Part B to begin May 1.

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 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. Enroll in your Part D prescription drug plan as soon as possible.

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

Toni King is an author and columnist on Medicare and health insurance issues. She has spent nearly 30 years as a top sales leader in the field. If you have a Medicare question, email [email protected] or call 832-519-8664. You can visit seniorresource.com/medicare-moments to listen to her Medicare Moments podcasts and get other information for seniors. The publisher of Toni's book, "Medicare Survival Guide Advanced" edition, is offering a $10 discount to Toni Says readers and friends at tonisays.com and seniorresource.com.