Back
Don’t take COBRA if you are eligible for Medicare
Charles Lee
April 18, 2016

If you choose COBRA, don’t wait until your COBRA ends to enroll in Part B. If you don’t enroll in Part B during the 8 months after the employment ends, you will face Part B penalty.

I have a friend who is 69. He applied for part A when he turned 65, but delayed Part B because he was still working.

In May, 2015 last year, he retired from the work. He took a COBRA package from the company and failed to apply for Part B. However, by the end of this month, April 2016, his former employer will not pay for his COBRA any more. The premium, if he chooses to continue COBRA, will be around $1,000 per month out of his own pocket.

Now he wants to enroll in Part B, but

  • because he didn’t enroll in Part B during the 8 months after the employment ends, he will face Part B penalty.
    Since last May, it will be 10% of Part B premium every month for the rest of his life.
  • Furthermore, since he missed Part B open enrollment which ends on March 31, he has to wait until next January. That means his penalty increases to 20% of Part B premium every month for the rest of his life.
  • Worst of all, he now has 8 months (May-Dec) without a proper Part B coverage.
  • The only option for him seems to continue COBRA by paying $1,000 per month. Is there any other option?

 

DISCLAIMER: Insurance matters discussed are always changing, so accuracy or usefulness of facts may be time-sensitive. Article content is used solely for the purpose of informing readers, and is not intended for any commercial use. Any views or opinions that are expressed in this article are those of the author and do not necessarily reflect the position of any entities involved or mentioned.