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September 14, 2022 at 02:54 PM
What You Need to Know
- Under current rules, clients who are victims of the COBRA enrollment glitch could face Medicare Part B late-enrollment penalties for the rest of their lives.
- Affected clients may also face a 15-month gap in Medicare physician and outpatient services coverage.
- H.R. 8791 is the new version of a bill Schrader has been introducing since 2009.
Rep. Kurt Schrader has brought back a bill that could save some older clients from as much as 15 months without Medicare coverage for physician and outpatient services.
The Oregon Democrat reintroduced the Medicare Enrollment Protection Act bill, which would fix a glitch that hurts workers ages 65 and older who leave their jobs, pay for COBRA group health insurance continuation coverage, use up their COBRA coverage, and then sign up for Medicare Part B.
The glitch can lead to high premium bills and long periods when affected clients may have enormous holes in their health coverage.
The new bill, H.R. 8791, is the latest version of a stand-alone bill Schrader has introduced in nearly every previous Congress since 2009. The text has also appeared in the Seniors’ Health Care Choice Act bills, which were introduced in 2017 and 2019 by Rep. Lloyd Smucker, R-Pa.
What It Means
The House is considering a bill that could help some clients overcome terrible Medicare enrollment periods.
But lawmakers have been missing opportunities to pass similar bills for more than a decade.
Medicare and COBRA
Most people qualify for Medicare coverage when they turn 65.
Typical workers and spouses get “free” Medicare Part A hospitalization coverage because they and their employers have paid for the coverage through payroll tax payments.
Workers and spouses must pay a monthly premium for Medicare Part B physician and outpatient services coverage. If they are still working and already have employer-sponsored group coverage, they may choose to stay in the employer’s plan.
If the employers let workers go, or workers leave their jobs, the workers may choose to keep their employer coverage and current health care provider relationships in place by paying to continue their employer coverage under the continuation rules set by the Consolidated Omnibus Budget Reconciliation Act of 1986, or COBRA.
The Problem
Because paying for Medicare Part B coverage is voluntary, Congress has included late-enrollment penalties in an effort to keep relatively young, healthy people ages 65 and older from waiting until they have serious health problems to pay their premiums.
