Worried About Your Medicare Coverage After Your Spouse Loses a Job? What Should You Know?

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understanding changes in health insurance

The rules, regulations and restrictions of medical insurance can change a lot over short periods of time. What may be covered this year may not be next year. The premiums that you are paying this year could double next year. How much do you pay out of pocket before your insurance picks up the expenses? Do you have an out of pocket limit to meet before your insurance covers anything? Our blog will help you gain a better understanding of how your insurance works to protect you and assistance in reading the documents you receive to alert you of upcoming changes on your health insurance policy.

Worried About Your Medicare Coverage After Your Spouse Loses a Job? What Should You Know?

25 April 2017
 Categories: , Blog

If you're like many dual-income couples, you and your spouse may be planning to retire at different dates. Whether due to a variance in ages, job duties, earnings, or simply one spouse's desire to keep working, many individuals may precede their spouse in retirement by anywhere from a few months to a decade or more. However, when it comes to your Medicare insurance coverage (and supplemental coverage), depending upon your working spouse's healthcare coverage can sometimes be a risky -- and complicated -- prospect. 

Read on to learn more about what may happen if your spouse loses his or her job (and primary healthcare plan) before you've enrolled in Medicare Part B, as well as what you can do to avoid the assessment of any penalties while maintaining constant insurance coverage. 

What happens if your spouse loses primary insurance coverage before you've enrolled for Medicare Part B? 

Many recent retirees who are about to turn 65 and who still have a spouse in the workforce (with employer-provided health insurance) opt to utilize their working spouse's insurance coverage in lieu of purchasing Medicare Part B. This type of arrangement is permissible under both Medicare rules and the rules of the employer-provided health insurer, but with a few caveats.

If an employer-provided health policy lapses or is canceled and you subsequently fail to purchase Medicare Part B coverage, not only will you not be covered, you may be assessed a financial penalty for each year that goes by before you do enroll. 

In addition, you may be barred from enrolling in or purchasing a Medicare supplement plan (or asked a number of personal health questions to determine whether you can even qualify for a supplement). Because these supplements are essentially private insurance policies, they aren't required to be extended to all individuals over age 65. On the other hand, someone who has maintained constant insurance coverage is unlikely to be asked any medical questions or denied supplemental coverage, even if he or she actually has more medical problems than the person whose coverage lapsed.

What should you do if you lose your primary insurance coverage before you've enrolled for Medicare? 

Fortunately, by taking quick action after an employer-sponsored healthcare plan is revoked or voided, you should be able to avoid any financial penalty and preserve your ability to qualify for a Medicare supplement. 

Immediately after leaving employment, your spouse will want to have his or her former employer fill out and sign a Special Enrollment Period form. This form permits you to enroll in Medicare Part B during a special "open enrollment" period, rather than having to wait until the general open enrollment period and risk a financial penalty. 

For more information about medicare supplements, talk to companies like Alabama Medicare Plans.