I saw an interesting situation related to Medicare the other day that reminded me that it’s always good to check and double check to make sure things are running as they are supposed to be.
It involved a person on Disability Medicare, but the lesson applies to us all.
It is possible to get on Medicare before age 65. You have to be drawing disability Social Security for 2 years before you become eligible for Disability Medicare. Once your Medicare Part A and Part B go into effect a person has a 6-month window to get a Medicare Supplement without any health questions asked.
That’s pretty important for most people on disability.
The catch is that Medicare Supplements for people below age 65 are priced very high compared to people that have reached 65 and beyond.
It’s the one example I can think of where younger people pay a higher rate for insurance than older people.
Made Easy Explanation
The reason is because people on disability will, from a health underwriter’s perspective, have more health insurance claims. Thus, they are charged a higher monthly premium for the health insurance.
Once the person reaches age 65 they can get the regular, lower premiums that are available.
This one individual had a Medicare Supplement while on disability. Then when he turned 65 he would qualify for another 6-month window where he could get a different Medicare Supplement with no health questions asked, and at the more favorable “non-disability” rates.
His 65th birthday came.
His current supplement (priced high at typical disability rates) did not automatically lower his premium to the more favorable 65-year old rates.
So he was still paying the higher premiums.
Thankfully things turned out well for him because before his 6-month “no health questions asked” window ended (he still had about a month left in it) he switched to a much lower priced plan.
But it goes to show, things don’t always work automatically.
His existing supplement’s rate did not automatically lower the premium when he reached 65.
I’ve seen some companies do this, but I’ve also seen other insurance companies that have the proper systems in place to make sure the premium goes down when the disability Medicare recipient reaches 65.
You can’t take it for granted and assume it’s going to happen, or it could cost you money.
Or heaven forbid, if this individual had waited beyond 6 months after turning 65 he might would have been stuck with a high premium on his old disability supplement and possibly never been able to qualify (health-wise that is) for a more reasonably priced one.
You may not be on disability but staying on top of important issues related to retirement (like the ever important health insurance / Medicare issue) can be a “make-or-break” topic when it comes to your funds lasting you throughout the remainder of your life.
If you have concerns about your retirement, whether it be protecting against health care costs, worried about losing money in the market, or worried your portfolio may not be positioned to get enough growth to last you throughout retirement, then feel free to click the link below to schedule a phone chat with me where we can discuss your most pressing problems. I’ll help point you in the right direction.
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