How does COBRA work with my Medicare plan?

In this week’s column, Phil Moeller, the author of Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs and co-author of the updated edition of How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security, helps a reader understand how COBRA works with Medicare.

When does COBRA coverage kick in?

Question: My question is about COBRA continuation health insurance. I got COBRA last July, when I was laid off from my job. I was 65 at the time.

I had never applied for Part B of Medicare and, as I later learned, made a mistake by not doing so. 

I went to the doctor last December after my COBRA was in effect and got a $300 bill that my COBRA health insurer refused to pay.

I then learned that I should have had Medicare and that it would have been my primary insurer and that COBRA was my secondary insurer. 

However, because I didn’t have Part B, it seems to me that COBRA should have stepped in as my secondary insurer and paid this bill. Why didn’t it do so?

Your books are terrific. Just terrific. Easy to understand. They save our sanity. Thank you.

Answer: I’m sorry you got caught up in this COBRA mess. If it helps, many other readers have faced the same vexing problem.

For the record, COBRA is shorthand for the Consolidated Omnibus Budget Reconciliation Act, a law passed nearly 35 years ago to provide employees and their families with the ability to continue their health insurance when the employee lost his job. It provides at least 18 months of continued coverage, assuming the employee continues to make premium payments.

As you and others have learned, however, COBRA does not play nice with Medicare. COBRA plans are not required to provide primary insurance coverage for anyone aged 65 or older who is eligible for Medicare.

COBRA provides secondary coverage, but expects Medicare to provide primary coverage.

Without Part B, you were on the hook for being your own primary payer of this doctor’s bill. As you may have learned, Part B pays only 80% of your valid claims. So, it never would have paid more than $240 of your $300 doctor’s bill.

I think you thus could try to at least get your COBRA plan to pay the other $60 as your secondary insurer. But I wouldn’t hold my breath!

The fact that you didn’t know that you needed Medicare is a sad consequence of the poor communications job that most employers do when their 65-and-over workers and spouses lose employer coverage. 

In addition to providing only secondary coverage, COBRA also is not considered an extension of employer coverage in terms of Medicare enrollment obligations. So, in addition to not providing primary coverage, a person aged 65 or older with COBRA may also face lifetime late-enrollment penalties for not getting Medicare when they first became eligible. 

I am sorry to be the bearer of such bad news, and wish you had seen my Medicare book before all this happened.