When it makes sense to decline Part A of Medicare

in /Ask Phil by

Susan – Md.: I am 63 and plan on working until at least 66. Realistically, I should work until I die, but the commute is killing me. Anyways, my hubby is retired, and we are both now on my medical plan. This year my employer has switched to the handy dandy PPO/HSA [preferred provider organization/health savings account] plan and will pitch in part of the deductible.  My hubby is on Medicare Part A only. We were told he had to take it by our local senior citizen center. What will happen when I turn 65, as apparently you cannot use a health savings account if you are taking Part A or B? The insurer told me to decline both Parts A and B and tell Medicare I am an active full-time employee. Is that the correct information? I thought you were forced to take Part A or were penalized later on.

Phil Moeller: I am still trying to wrap my head around the notion of someone who wants to work until they die, but is being killed by the commute! What a logical strategy!

I also want to preserve this answer for all those times when insurance companies say I never take their side: Susan, your insurance company is correct! I assume your husband is taking Social Security. Otherwise, I don’t know why the senior center said he had to take Part A. It’s true that Part A can be a helpful secondary payer for some insured hospital expenses that are not paid by your employer health plan. But there is no requirement that someone take Part A unless they are receiving Social Security in which case you must take Part A. If you’re not taking Social Security yourself, you do not have to take Part B even if you’re 65 or older, so long as you’re covered by an employer group health plan, which you are. So you’re fine. You should be able to stay in your health savings account. However, because your husband is taking Part A, he will not be able to make a contribution to the health savings account, including the $1,000 age-related “catch up” contribution. You will, however, be able to make the maximum contribution to the plan, including your employer’s payment. If you get a Medicare card from Social Security when you turn 65, just send it back and reject the coverage. I’d also advise calling Social Security to make sure the agency does not mistakenly keep you enrolled.