Two years after I went out on leave due to visual impairment, I got a letter in the mail welcoming me to Medicare. A lot of people are, understandably, very happy when this day comes. Me? Not so much.
I didn't request to participate in Medicare. The government just automatically signed me up for Medicare Plan A and Plan B. Plan A is free to me and covers hospital stays. Plan B will cost me $104 a month, increases yearly, and is a major medical plan. To get a truly functional health plan I'd need to pay for Plan C; a Medicare Advantage plan offered by an HMO/PPO.
Thing is, I don't need Medicare. I have insurance already through my employer. And since my plan provides for my family, I'm not making any changes. So clearly I'm not going to pay for Plan C - I don't need two complete health policies for one person. And Plan B looks redundant and not worth the expense. I'll keep Plan A because it literally isn't possible to cancel.
So here's the rub, the government has built in an incentive to try and force me to sign-up for Plan B. If I don't sign up when Plan B is first made available and I want to sign-up at a later date, there will be a penalty. Plan B will go up 10% in cost for every year that I'm eligible but didn't participate.
So If ten years from now I lose my employer based insurance and want to get Plan B, it will double in cost to $208 (in 2014 dollars) a month, every month! If I wait 15 years, it will cost $260. Remember this is just for a major medical plan, not an actual health plan. I'd still have to pay for Medicare Advantage separately.
I talked to the Social Security administration and they confirmed that there is no cap to the 10% yearly penalty. They said it would reset when I hit 65, over two decades from now. In theory I could end up having to pay more than 240% in penalties on a monthly basis if I lose my employer based insurance.
But isn't that why we have the affordable care act? If I lose my insurance I can just jump on healthcare.gov and buy a plan from the exchanges. But I can't. Since the government signed me up for Medicare, I lost the ability to buy insurance on the open market. Providers are only allowed to sell me Medicare Advantage plans, which I have to purchase Plan B to qualify for.
Normally, Medicare doesn't impose the Plan B penalty on people who have employer based insurance. But for some un-explained reason, people in my situation do not qualify for the penalty exemption based upon how the IRS taxes my income.
So I'm left with a choice. If I waive Plan B the government will start adding the fees onto to my hypothetical premiums. Which wouldn't matter as long as I keep my employer based insurance. But we live in uncertain times. Will I really be able to participate in my employer's plan until age 65? Since I will not be allowed to purchase insurance on the open market it's hard to see how I do anything but pay the Plan B $1,250 yearly fee.
I might be able to make back a small percentage of the Plan B premiums if Plan B covers my employee based insurance policy co-pays. But the vast majority of my Plan B premiums are going to be wasted on a product I'm already purchasing. I'm essentially buying Plan B as a hedge against my actually insurance plan going away. Plan B is functioning as very expensive liability insurance. On my insurance.
Oh, well. My family didn't need that money anyway.
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