Column 52

First, I would like to publicly thank those that expressed their sympathy regarding the death of my mother-in-law.  It was very kind.

Last week I wrote about the VA Non-Service connected disability pension.  Apparently there are benefits for up to $1360 monthly even if only the spouse needs care.  This was established in 1952 and has two components: Aid & Attendance and Housebound Benefit.  This benefit is designed to provide a tax free pension to help defray the cost of long-term care; Assisted, Skilled or Home.  There is no repayment provision, so you are not mortgaging the estate. 

Since the last article I have learned that there are no retroactive veteran's spousal benefits if the application was not submitted while the individual was alive. Since the interim care was only paid for a relatively short time, the impact was not large for our family. However, this is an important lesson for others who may wish to apply for these benefits.  If you think you are eligible, apply as soon as possible when you need this type of financial support for care.

Another reminder about delays in applying for benefits.  If you are under 65 and are eligible for benefits due to disability be careful not to miss the enrollment periods.  Most folks know that you do not have to enroll in Medicare Part B if you have other qualified group health coverage.  It might be reasonable to assume that if you elected COBRA, that provision would continue.  But it does not. 

Medicare does not consider this to be qualified group coverage so if Medicare Part B is not elected at the time group benefits terminate, then you must wait for a Special Enrollment Period.  This will cause a delay in your enrollment and you are penalized 10% for each year that you are not enrolled. Since the Special Enrollment Period could be 8 months later, you will likely have an increased Medicare Part B premium of at least 10%.  Based on the current $105 monthly premium, the 10% likely won't break the bank, but it is certainly is an issue.  Note also  that this penalty would continue to accrue annually and would not be waived if the individual waited until age 65 to enroll in Medicare Part B.

Remember if you are eligible for Medicare, you are not eligible for coverage on the Individual Exchange under Covered California.

With the advent of the Affordable Care Act, (ACA) we have a whole new set of special enrollment (SEP) periods to track for individual coverage.  We are in a "one time" SEP currently that bears repeating.

Individuals on COBRA who missed open enrollment have a 60 day special enrollment period (SEP).  Current COBRA Continuation enrollees can enroll in a Covered California health insurance plan through July 15, 2014. This special extension is not available for off-Exchange individual plans.

It's important to know that if you decide to drop COBRA and enroll in a Covered California plan, you cannot change your mind and go back to COBRA.

A word of caution:  It may look attractive to go to the Exchange due to subsidies that may be available based on your lower income if you just lost your job. Remember to calculate your expected annualized income, not just your new reduced monthly income.  It's important to include all of your previous calendar year earnings, then add in your current income.  Covered CA suggested reporting the prior earnings as a single income event. 

Also be careful about dropping your COBRA coverage if you have already met your deductible and/or out of pocket maximum limits.  If you start on the new plan, you will need to meet deductibles and coinsurance maximums again.  Finally look long and hard at the provider networks and Rx formularies if you are in the middle of a serious illness or if you take an expensive medicine.  Many times you may simply not know the cost of the Rx and think that the small copay you are paying is the actual cost of the medicine.  So be sure to do your homework before closing the door on that COBRA options.