Part B - IRMAA & LEP

[sshafran]

So, I have a prospect (T65) who is not excited about paying over $428.60 for Medicare Part B because of income.

He is currently working (as a 1099 IC) and will continue to work for a few more years. He and his wife earn a nice income (obviously).

He currently has short-term medical insurance. He is only paying approx $120/mo for his short-term plan.


Now that he knows how much Part B will cost - he's considering going without Medicare Part B.

So, the ramifications of not getting Medicare Part B are pretty serious - 10% yearly + locked out of the system until a valid election period (which I think is more important than even the penalty).

So, to my question: I'd never really though about it until now - but would he pay 10% of the standard premium or 10% of his premium including the adjustment? (there is a big difference between $13.40 and $42.80!)


Also, just to make sure I understand his options "outside of Medicare" - since I've never sold a "short term medical" plan - but from what I'm seeing it looks like the underwriting only allows 64 and under to get it. Does that sound right?


My view is - look, there aren't really any other options here, you need to get Part B unless you want to be (basically) uninsured. And if you do go without B - you need to know what you are stepping in. He asked if there was any other option - I couldn't think of any - but thought I'd come on here to see if you all knew of something I might be missing.

Thanks!

 

[somarco]

IRMAA is calculated on MAGI from roughly 2 yrs ago. Until his income drops below the threshold he will be subject to IRMAA.

The longer he delays the higher his penalty which, I presume, is based on the standard premium.

Part D also subject to IRMAA.

At $428 for B and MFJ that puts his MAGI north of $428k for 2015.

Sounds like someone who will want Hi F or $0 MA plan and will probably be a PITA.

Are you sure you want to pursue this guy?

 

[sshafran]

IRMAA is calculated on MAGI from roughly 2 yrs ago. Until his income drops below the threshold he will be subject to IRMAA.

The longer he delays the higher his penalty which, I presume, is based on the standard premium.

Part D also subject to IRMAA.

At $428 for B and MFJ that puts his MAGI north of $428k for 2015.

Sounds like someone who will want Hi F or $0 MA plan and will probably be a PITA.

Are you sure you want to pursue this guy?

Haha, for a hi-f - no. For a MAPD - maybe.

I anticipate the problem - however, of him picking up a $0 MAPD and having to pay the IRMAA on that - and he "never needs Rx's" - so I'm sure he won't like paying for a $0 MAPD. I don't think he'll be cool with the $76.20 price tag on a $0 MAPD.

Your wisdom is convincing me as I type that I shouldn't spend too much time on him. Tell him the facts and move on - if he wants it he'll call...

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his penalty which, I presume, is based on the standard premium.

This was my assumption as well. But I wasn't 100% sure.

 

[LostDollar]

There is a Texas agent that talks about 2 person groups for health insurance in that state, with an LLC type corporation.

Is something like that an option in your state, and if so could he form an LLC to receive his contractor income, hire his wife for recordkeeping and then do group insurance for them through the corporation until they turn 70?

 

[sman]

There is a Texas agent that talks about 2 person groups for health insurance in that state, with an LLC type corporation.

Is something like that an option in your state, and if so could he form an LLC to receive his contractor income, hire his wife for recordkeeping and then do group insurance for them through the corporation until they turn 70?

That certainly would be an option for getting health insurance. However, it does not preclude him from suffering the late enrollment penalty for Part B. Group must be 20 or more people to be able to delay enrolling in Part B without a penalty.

 

[LostDollar]

Missed that piece. Red face!

 

[FLM2]

Haha, for a hi-f - no. For a MAPD - maybe.

I anticipate the problem - however, of him picking up a $0 MAPD and having to pay the IRMAA on that - and he "never needs Rx's" - so I'm sure he won't like paying for a $0 MAPD. I don't think he'll be cool with the $76.20 price tag on a $0 MAPD.

Your wisdom is convincing me as I type that I shouldn't spend too much time on him. Tell him the facts and move on - if he wants it he'll call...

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This was my assumption as well. But I wasn't 100% sure.

If it was me I would tell him the only option for waiving Part B is if you have retirement benefits, otherwise you need to take it.

All he is doing by considering waiving Part B and keeping a short term plan is inviting a disaster and I would want no part of it.

 

[sshafran]

If it was me I would tell him the only option for waiving Part B is if you have retirement benefits, otherwise you need to take it.

All he is doing by considering waiving Part B and keeping a short term plan is inviting a disaster and I would want no part of it.

Agreed. Thanks!

 

[yogooglethis]

If it was me I would tell him the only option for waiving Part B is if you have retirement benefits, otherwise you need to take it.

All he is doing by considering waiving Part B and keeping a short term plan is inviting a disaster and I would want no part of it.

In addition to what FLM2 said he will be paying the penalty for not having ACA compliant coverage,pay penalty for part B,may pay LEP for part D if ST rx coverage not creditable, has to renew and qualify for a short term policy every 3 months now and also worry about the pre x on short term .For a high income earner who probably has assets to protect this is just stupid-IMHO.

 

[GreenSky]

Missed that piece. Red face!

No more worthless than any of your other posts.

Rick