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With the New Year will come an increase in Medicare premiums for those participating in the Medicare program. First and foremost, the monthly premium will rise by $9.10 from 2019’s rate. Additionally, the annual deductible will rise an additional $13 in 2020. Here is a tidbit that I am sure many were not aware of: the 10% per year penalty is compounded yearly, for each year participation is deferred. I was having a discussion recently with someone about Medicare (I spend a lot of my day talking, thinking and theorizing about the program), and brought up this fact—it was received with a jaw drop and disbelief. There is a way to get this penalty waived. If the newly enrolled beneficiary previously had healthcare insurance and can demonstrate that coverage (and that it was similar or better than Medicare, and I am being very basic in my discussion), that penalty will be waived.
I had been an OIG agent for many years before I was educated on this bit of information I was conducting interviews on a podiatry fraud case (yes, I have worked A LOT of violations involving this specialty), and was interviewing mostly elderly, low income residents of a particular building. I came to interview a beneficiary who had been a long-time employee of the US Department of Veteran’s Affairs. She retired many years prior to our encounter and had previously been covered under a federal employee health benefit (FEHB). At some point, the plan she was enrolled in folded, and she was in a position where she needed healthcare coverage. I did not get the full story, or really an understanding as to why she was unable to enter a new plan – whether outside or within the open enrollment period, as it would seem that she should have been able to get into a new plan. Nonetheless, she was the unfortunate benefactor of the 10% penalty.
In part, her predicament was based upon the fact that she was a federal employee under an old retirement system, where employees received robust benefits, and did not pay into the social security program (those that know, will understand she was a CSRS employee and not FERS). Since she did not pay into the social security program during her years of service, when she finally entered the Medicare program, she received a quarterly bill for the monthly premium, as well as the compounded penalty for each of the years that she was not participating. Regardless of the circumstance that led to her having to enter the program much later than her eligibility date, the penalty was something that became a financially crippling issue for this beneficiary. Of course, this was compounded (no pun intended) by the fact that I was there to interview her about a fraud that was perpetuated upon her, merely because she was a Medicare beneficiary, residing in a low-income building, and was preyed upon by an unscrupulous provider who took advantage of her medical and social needs.
With technology and information readily available, the Medicare population of today becomes better educated and knowledgeable. As we all age into the program, in whatever form it takes over time, we will all be in better positions to understand the pitfalls and nuances to be better poised (hopefully) to deal with program related issues like never before.
Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact Eric Rubenstein for more information on our Fraud Spotlight series.
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