January 27, 2009
Recently, a self-employed, professional gentleman in his mid 60's came to see me. He had been undergoing agressive treatment for lymphoma. He was covered by an individual health insurance policy. Because he was in the middle of chemotherapy and radiation treatments, he thought he should avoid "rocking the boat" by changing his insurance coverage to Medicare.
A few months after his 65th birthday, he started receiving notices from his carrier denying payment for his treatments. After several calls, he discovered that his health insurance policy contained a provision commonly found in similar policies that says:Your benefits will be reduced if you are eligible for coverage (even if you did not enroll) under any federal, state (except Medicaid) or local government health care program. Such coverage includes Medicare Part A and B and other similar programs. Benefit payments will be reduced by the amount that was paid or would have been paid (if you had been enrolled) by the other program.
After making this discovery, he tried to sign up for Medicare retroactively. Medicare's initial enrollment period is the 3 months before you turn 65, the month you turn 65 and the 3 months after you turn 65. He was still in the final month of the enrollment period so he requested enrollment retroactive to his 65th birthday. Unfortunately, when you enroll after the first three months of the enrollment period, the effective date of your coverage is delayed. In his case, his coverage started three months after he enrolled, which was six months after his 65th birthday.
So, this highly-educated, professional man who suffers from cancer was effectively without medical insurance coverage for six months. You can imagine the cost.
I share this vignette with you so that it doesn't happen to you or someone you know.
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