Applying for Medicare, Part III

January 13, 2012

In my last post I concluded by noting that I had learned how much I was going to pay for Medicare and the next step would be to receive a letter from the Social Security Administration (SSA) with instructions on the mechanics of paying for it.

I was wrong on both counts.

The next letter I received was from Centers for Medicare and Medicaid Services (CMS). It welcomed me to Medicare, told me I was registered to use the website and that I should go there to complete my Initial Enrollment Questionnaire or “IEQ.” This was a bit puzzling since I had filled out a questionnaire during the enrollment process, but I concluded that this must be the first questionnaire since I became enrolled. In any case I went to the website and answered questions about my employment status, my wife’s employment stratus and whether or not I was receiving benefits for Black Lung, Worker’s Compensation or for illness or injury caused by someone else.

I next received a letter telling me again that I needed to pay an Income-Related Monthly Adjustment Amount (IRMAA). I had received a very similar letter a month earlier providing the same information about the IRMAA.  This second letter referenced the fact that I received the same information a month earlier. I still had no information about how to pay.

A few days later I received two letters on the same day. One letter from SSA in Jamaica, New York (my previous letters had been from my local SSA office) which told me my Medicare premium would be about $100 a month higher than the previous letters I had received. The other letter from CMS in St Louis was essentially a Medicare billing notice to pay yet another amount of money to cover Medicare Medical Insurance for a three month period.

Now I was thoroughly confused: I had three different amounts and a bill for one of those amounts. So I called my local SSA office and asked for help. A very nice person (who I had the sense has been through this a number of times) explained: Medicare charges most people a base amount to which is added the IRMAA. The first and second letters told me told me what my IRMAA would be; the third letter added the base amount and IRMAA together; the billing notice only covered the base amount for a three month period since St Louis was probably not up-to-date on my IRMAA. Her advice to me: pay the CMS billing notice amount and wait for St Louis to catch up on the correct billing.

I thanked her for her help and commented it was interesting that there had been a lot of communication but it still managed to create confusion. She responded: “That’s why we are here: to create confusion!” We both laughed and I thanked her again for alleviating mine.

R. Kevin Price

© 2008-2012 R.K. Price


Applying for Medicare, Part II

December 29, 2011

My previous post related my experience in applying for Medicare about three months before my 65th birthday. In short, I applied on-line and received” a “Notice of Award” some 10 days later informing me that I am entitled to Medicare hospital and medical insurance beginning next year. I was left with wondering how much Medicare was going to cost me and what my payment options (if needed) would be since the “Notice of Award” was silent on those topics.

A week or so later I received another letter from Social Security Administration (SSA) focusing on how much I will need to pay each month to receive my Medicare Part B Medical Insurance benefit (as opposed to the Part A Hospital Insurance benefit). These payments will be in addition to the Medicare taxes my employers and I have both paid since the inception of the program, a not insignificant sum in the aggregate for either party. The letter was silent as to whether I would need to pay anything for Part A Hospital Insurance, but I learned from another source that, in consideration of my payments over the years that, like most people, I do not need to pay an additional premium for Part A. (It would be helpful in my view if the SSA included that tidbit in their communication.)

In order to determine my Medicare Part B IRMAA (in the middle of the letter “premium”  becomes the “IRMAA” or Income-Related Monthly Adjustment Amount), the SSA consulted with the Internal Revenue Service in order to compute my “MAGI” or Modified Adjusted Gross Income from 2010. My MAGI is the sum of my adjusted gross income from my joint tax return with my wife increased by a small amount of tax exempt interest excluded from our taxable income. Based on my MAGI, the SSA consulted a table (included with the letter) and determined my IRMAA.

The letter also lists a variety situations e.g. marriage, divorce, annulment, death, job loss, reduced hours, loss in income-producing property, cancelled pension plan, bankruptcy, that could affect my MAGI and hence my IRMAA. Fortunately, none of these applied in my case.

So I now know how much I will pay. I am still unsure what method I will use to pay my IRMAA but, unlike the first letter I received from SSA which made no reference to further correspondence, the most recent letter said “If you do not contact us within 10 days after you receive this letter, we will send you another letter which will tell you how you will pay the income-related monthly adjustment amount.”

I look forward to that.

R. Kevin Price

© 2008-2012 R.K. Price

Applying for Medicare

November 30, 2011

A significant step in most people’s retirement is applying for Medicare.

After spending several days adjusting to the idea that I am actually old enough for Medicare, I decided to take the plunge. Actually, I am three months shy of my 65th birthday but Medicare suggests that one apply three months in advance.

You can apply at a Social Security Office or on-line. Since my blood pressure tends to surge while standing in lines in government offices, I opted for the on-line approach. I am pleased to report it worked well.

The entire process took just a few minutes and was mostly straightforward. The only quirky part was in the section describing what medical coverage I have now, and what I will have after age 65 from my previous employer. None of the boxes provided seemed to provide the opportunity to answer clearly. Fortunately there is a message box included in the on-line form which I was able to use to explain the situation. A push of the button and I was officially an applicant.

Today (about 10 days after applying) I received a “Notice of Award” telling me I am entitled to Medicare hospital and medical insurance beginning next year (I knew that). It also told me that “we will send you a Medicare card” and that “you can enroll in a Medicare prescription drug plan (Part D)” which I won’t do because my former employer’s plan is better.

More ominously, the notice also told me “The benefit in this letter is the only one you can receive from Social Security.” That is wrong since I am also entitled to a retirement benefit (at least until Congress takes it away) but I attribute the errant sentence to poor draftsmanship in the government letter writing department.

More interestingly, the letter then went on at significant length to tell me what to do if I disagreed with the decision to send me a Medicare card including filing an appeal, getting representation, seeking reconsideration, getting a hearing, appealing to the Appeals Council, filing suit in Federal Court and directed me to the enclosed pamphlet which described all of this in greater detail. Whew!

The questions I wanted answered most were how much is this going to cost me and what are my payment options. On these topics there was no information provided. I am assuming all of this will come in due course. Time will tell.

R. Kevin Price

© 2008-2011 R.K. Price