The Transition to Medicare Podcast

True Stories: Common Medicare Pitfalls and How to Avoid Them

Giardini Medicare

Are you approaching your transition to Medicare and feeling overwhelmed by all the potential pitfalls and complexities? You’re not alone! In this episode of the "Client Scenarios Podcast," we go beyond hypothetical examples and dive into five real-life Medicare scenarios our clients have faced. Learn how to avoid costly mistakes and make smarter decisions when enrolling in Medicare.

Join hosts Cameron Giardini and Joanne Giardini-Russell from Giardini Medicare, an independent insurance agency serving clients in over 13 states, as they share real stories—from clients who faced Medicare enrollment traps to those who found unique ways to maximize their Medicare benefits. Whether you’re concerned about moving states with a Medicare Advantage plan, navigating COBRA insurance complications, managing Medigap payments, avoiding last-minute Medicare enrollments, or understanding marketplace subsidies and Medicare eligibility, this episode offers practical advice for anyone transitioning to Medicare.

Episode Highlights:

1. Moving Out of State with Medicare Advantage: Discover how relocating can impact your Medicare Advantage plan and what to do before you move to avoid losing coverage.
   
2. COBRA Insurance Pitfalls: Learn the hidden risks of relying on COBRA coverage after retirement and how it affects your Medicare Part B enrollment.

3. Risks with Medicare Supplement Payments: Understand the critical importance of setting up automatic payments for your Medigap premiums to avoid losing coverage.

4. Last-Minute Medicare Enrollments: Why waiting until the last minute to enroll in Medicare could cost you more than you think, and how to avoid these common mistakes.

5. Marketplace Subsidies vs. Medicare Eligibility: Find out why keeping your subsidized marketplace health plan after turning 65 could result in significant financial penalties.

Who Should Listen?

- Individuals approaching age 65 or currently planning their transition to Medicare.
- Those currently enrolled in a Medicare Advantage or Medigap plan and considering a move to a new state or county.
- Retirees relying on COBRA insurance who need to understand how it affects their Medicare options.
- People enrolled in the marketplace (ACA) health plans receiving subsidies who are nearing Medicare eligibility.
- Caregivers and family members assisting loved ones with their Medicare decisions.

More Content:

- Visit our website: gmedicareteam.com
- Connect with us on YouTube and TikTok by searching "Giardini Medicare" for more valuable Medicare content.
- Send us your questions or feedback at info@gmedicareteam.com

Episode Sources📖

Choosing a Medigap Policy

Medicare and You Handbook

Part B SEP Special Circumstances

Medicare and Marketplace Webinar

Joanne: When it comes to transitioning to Medicare, we often discuss hypothetical scenarios to watch out for. However, in today’s episode, we’re going to cover actual situations we’ve encountered with our clients. This way, you can avoid falling into the same traps and learn from the smart decisions others have made.

Cameron: Before we start, my name is Cameron Giardini, and together with my co-host, Joanne Giardini-Russell, we run Giardini Medicare, an independent insurance agency based in Southeast Michigan. Although we’re based in Michigan, we work virtually over the phone to help consumers in about 13 states find the right Medicare coverage for them.

As always, if we don’t operate in your state, we will connect you with another trusted independent agent who can assist you in finding the coverage you need. We also have a free online course available, where you can learn about various Medicare topics. You can register for the course by visiting [gmedcourse.com](https://gmedcourse.com).

Joanne: I’ll give you an overview of today’s episode. We’ll discuss first-hand experiences we’ve had with our clients over the last several years so you can learn from their mistakes and also from the positive actions they've taken. We’ve chosen relatively common scenarios that we've seen, which can actually help you during your transition to Medicare.

Today's examples include:
1. Moving out of state.
2. Issues with COBRA coverage if you don’t enroll properly.
3. Risks of Medicare supplement payments.
4. Missing key enrollment periods.
5. Marketplace coverage issues and Medicare eligibility.

Cameron: Let’s begin with Client Scenario Number One: moving closer to family with a Medicare Advantage plan. We’ll start with a positive story about "Marie." Note that the situations we discuss are real, but the names and some details have been changed to protect our clients’ identities.

Marie lived in Tennessee with her husband when she unfortunately suffered a stroke. To help with her care, they decided to move to Michigan to be closer to their children and other family members. While in Tennessee, Marie was enrolled in a Medicare Advantage plan. However, after moving to Michigan, she received a letter from the Medicare Advantage company saying she was being disenrolled from her plan.

The reason? Medicare Advantage plans are available only in specific regions, called service areas. When Marie moved to Michigan, she left her plan’s service area, which led to her automatic disenrollment.

Marie contacted us to find a new Medicare Advantage option in her new area, Metro Detroit. What she didn’t realize was that moving out of her service area granted her special rights to enroll in a Medicare Supplement (Medigap) plan, known as a Guaranteed Issue Right. This right lasts from 60 days before her Medicare Advantage coverage ends to 63 days after it ends.

Due to Marie’s health, she would not normally qualify for a Medigap plan. But because of her move, she was able to enroll in a Medigap Plan F. She could not enroll in Plan G or N because, based on her initial eligibility for Medicare, those plans were not available to her under the Guaranteed Issue rights.

So, what can we learn from Marie’s scenario? If you plan to move to a new state or even just a different county, contact a broker ahead of time to understand your coverage options in the new location. Remember, these guaranteed issue rights do not apply if you are already enrolled in a Medigap plan and then move to a new state.

Joanne: That's a great point, Cameron. I remember another client who had a regional plan in Michigan, and after moving just three counties over, that plan was no longer available in his new zip code. He needed to use his guarantee issue rights as well.

Cameron: Absolutely. This can happen if you move from one metro area to another, such as from New York City to upstate New York or Chicago to another part of Illinois. Different service areas exist within the state.

Joanne: Moving on to Client Scenario Number Two: COBRA billing issues. Let’s start with the basics—what is COBRA insurance? COBRA is a federal law that allows you to keep your employer’s health insurance for a limited time after certain life events, such as retirement or losing a job. This coverage usually lasts 18 months but can be extended up to 36 months in some cases. However, COBRA can cause unexpected issues when it comes to Medicare, as we’ll see in the following scenarios.

For example, John worked for a large employer and was only enrolled in Part A, which covers hospital expenses. When he retired at 67, he chose COBRA to continue his health insurance, without considering enrolling in Medicare Part B. After 18 months, his COBRA coverage ended, and John decided to explore his Medicare options in September.

Unfortunately, John found himself in a difficult situation. He missed his Initial Enrollment Period (IEP) for Medicare when he turned 65, as well as a Part B Special Enrollment Period (SEP), which allows you to sign up for Part B without penalties if you have active employer coverage. Since COBRA is not considered active coverage for Medicare, John was outside the seven-month window for special enrollment, and the General Enrollment Period, which runs from January through March, wasn’t available at that time.

Here's the key takeaway: As of January 1, 2023, there is another option. You can request a Part B Special Enrollment Period if you can prove that you didn’t enroll in Medicare due to incorrect information from your employer or health plan. For example, if they told you that you didn’t need to enroll in Medicare Part B because you had COBRA, you could qualify for this SEP. However, you need to provide proof of this misinformation to the Social Security Administration when applying for Part B coverage.

Cameron: Continuing with COBRA billing issue scenarios, let's look at another situation involving Stacy, who is 64 years old. She decided to continue her employer’s health insurance through COBRA. Stacy liked her coverage and assumed she didn’t need to enroll in Medicare at age 65, thinking COBRA was considered employer group health coverage.

Everything seemed fine for the first few months after Stacy turned 65, but then she had a heart attack and needed emergency surgery. Suddenly, she began receiving large medical bills and letters from her health insurance company stating they wouldn’t cover the costs because she didn’t have Medicare as her primary insurance.

Here’s the problem: While COBRA allows you to keep your employer’s coverage after you retire, it doesn’t coordinate the same way with Medicare. If you have active employer coverage from a company with 20 or more employees, you can often delay Medicare enrollment without issues, as Stacy thought. However, once retired, COBRA is not considered active employer coverage, and after turning 65, you are expected to enroll in Medicare. COBRA only pays after Medicare pays its share.

This is a common mistake, and people like John in the previous scenario can face similar issues. Often, billing problems don’t arise until significant medical claims are made, which is when the insurance company realizes they aren’t responsible for some or all of the bill.

The takeaway is: No matter the size of your former employer, COBRA becomes secondary to Medicare once you're eligible for Medicare. Make sure you enroll in Medicare on time to avoid unexpected bills like Stacy's case.

Joanne: It's not always about significant medical expenses, either. I remember a client who, after about 18 months, had been doing routine physical therapy. The insurance company asked if she had enrolled in Medicare, and when she said no, they back-billed her for all those claims—even though it wasn't a major event.

Cameron: Exactly. Moving on to Client Scenario Number Three: paying your Medigap premiums with a credit card or paper bill. Let’s discuss an often overlooked but important aspect of your Medicare coverage: ensuring your premiums are paid on time and consistently.

Medigap plans are guaranteed renewable, meaning your coverage will continue for life as long as you keep paying your monthly premiums. The key is making sure those payments are made. For instance, Ben enrolled in a Medigap Plan G with our help. During the enrollment process, he was uncomfortable providing his banking information, so he chose to mail in a check each month to pay his premiums.

This worked fine until Ben was hospitalized for a few weeks and then moved to a skilled nursing facility. Amid all the confusion, Ben understandably forgot to send in his Medigap payment, and his children, who were helping him, were unaware of the payments. After 30 days of non-payment, Ben’s Medigap plan was canceled, leaving him with only Original Medicare and no additional coverage moving forward.

We’ve also seen clients who set up automatic payments with a credit card but forget to update their information when the card expires, leading to lapses in coverage due to non-payment.

Here’s what you need to know: If possible, set up your Medigap premiums on a recurring basis directly from your bank account. While Medigap plans usually offer a grace period, they will cancel your coverage for non-payment, and reinstating it may require passing health underwriting again, which is not ideal.

Cameron: Don’t expect the insurance companies to take pity on you if your insurance is canceled. They will be more than happy not to have you as a client, especially if you have high medical claims.

Moving on to Client Scenario Number Four: last-minute enrollments. This is probably the most common scenario we see. Many people rush to enroll in Medicare or Medicare coverages at

the last minute. This often involves individuals leaving their employer coverage after age 65 and suddenly needing to sign up for Medicare Part B, along with choosing a Medigap or Medicare Advantage plan.

Take Paul, for example, a 68-year-old who came to us at the end of April, just days before his employer coverage was set to end on April 30th. He would be without insurance starting May 1st. On April 28th, we helped Paul create a plan to immediately enroll in Medicare Part B and start a Medicare Advantage plan on May 1st.

Paul went to his local Social Security office with the necessary proof of his employer coverage, and we were able to enroll him in a Medicare Advantage plan based on the assumption that his Part B would begin on May 1st. At first, Paul wasn’t too concerned about the timing, as he rarely visited the doctor. However, just one week into May, Paul fell and broke his ankle, requiring a hospital visit. At the hospital, he was informed that his Medicare Advantage coverage couldn’t be confirmed, and he faced an early discharge.

After speaking with the insurance company, we found out that his Part B wasn’t active yet. The Social Security Administration hadn’t properly processed his application, leading to a frantic series of phone calls to activate his Part B before the Medicare Advantage plan canceled his coverage, which required proof of his Part B enrollment within 21 days of his initial application.

What you should know is that unexpected changes in your coverage can happen. If you know you’re going to need Medicare, try to apply as early as possible to avoid last-minute problems like Paul’s situation.

Joanne: If you're losing your job at the end of the month, it might be a rush, but if you know you need Medicare on a certain date, it’s best to be prepared.

Our final scenario today is Client Scenario Number Five: marketplace subsidies and Medicare eligibility. This is a common issue for people approaching age 65 while enrolled in an individual health insurance marketplace plan, also known as Obamacare or the ACA. This issue is particularly relevant for those receiving subsidies that make their premiums low or even free. Those paying high premiums are usually eager to switch to Medicare, but those benefiting from subsidies often want to keep their marketplace coverage.

Take Rebecca, for instance. She turned 65 in July and had been receiving health insurance through the marketplace with a substantial subsidy, leaving her with low premiums and minimal out-of-pocket costs. When we spoke to Rebecca in May, just before her 65th birthday, she told us she wanted to keep her marketplace plan instead of enrolling in Medicare.

However, Rebecca was already collecting Social Security benefits, which meant she would automatically be enrolled in both Medicare Part A (hospital insurance) and Part B (medical insurance). What Rebecca didn’t realize was that once her Medicare coverage began on July 1st, she would no longer qualify for the subsidies or cost-sharing reductions that had kept her costs low. If she kept her marketplace plan, she would have to pay back all the subsidies when she filed her taxes the following year.

Even if Rebecca hadn’t been automatically enrolled in Medicare, she wouldn’t have been able to keep her subsidized marketplace coverage. According to recent guidance from Medicare, even if she chose not to enroll in Medicare during her initial enrollment period—which would have ended three months after her 65th birthday—she would still be considered eligible for Medicare Part A starting November 1st. At that point, she would lose her eligibility for marketplace subsidies, even if she never officially signed up for Medicare.

Be very cautious about this situation—it happens frequently.

Cameron: Yes, those receiving subsidized coverage usually don’t want it to end, while those without subsidies are eager to switch to Medicare. So, in either situation, you’ll want to transition to Medicare once you turn 65.

The reason we discussed these different scenarios today is to help you learn from real-life cases we’ve encountered. Hopefully, this will help you avoid similar pitfalls during your transition to Medicare. As always, please leave us a review on your podcast app and subscribe so you can listen to future episodes. You can find more Medicare content from us on YouTube or TikTok by searching “Giardini Medicare.” Lastly, if you have any feedback or questions, feel free to email us at info@gmedicareteam.com

Thank you, and have a great day!