Medicare Savings: New Bipartisan Bill Could Protect Seniors from Penalties

Happy doctor talking to senior male patient while being in a home visit.
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A bipartisan bill has been introduced to protect seniors enrolling in Medicare Part B after COBRA coverage expiration from potential coverage gaps and late enrollment penalties.

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U.S. Representatives Lloyd Smucker (R-Penn.), Kurt Schrader (D-Ore.), Gus Bilirakis (R-Fla.), Mike Thompson (D-Calif.), Tim Walberg (R-Mich.), and Mikie Sherrill (D-N.J.) explained that under the current law, all seniors are required to enroll in Medicare Part B within three months of turning 65. Seniors who have employer coverage and work past 65 are allowed an exception to this rule, but COBRA continuation coverage does not qualify, according to a press release.

In turn, “seniors who continue their care through COBRA without enrolling in Medicare are subject to waiting periods of up to a year before they can begin receiving coverage and risk a lifetime of increased Part B premiums and other financial penalties.”

“For far too long, the Medicare enrollment process has been overly complicated and burdensome,” Schrader was quoted as saying in the release. “Our bipartisan bill would help make the enrollment process easier for seniors who choose to stay on their employer’s COBRA insurance and ensure they have the time and resources to find the appropriate health care coverage without incurring unnecessary delays, higher premiums or financial ramifications. Well intended seniors, one of our most vulnerable populations, should not face unintended consequences that can limit their access to coverage and subsequent care.”

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The new bill, the Medicare Enrollment Protection Act, aims to address this issue. It would create a transition period enabling seniors on COBRA to enroll in Part B during any month in which COBRA coverage is active. As long as the individual enrolls in Part B coverage before the COBRA coverage ends, he or she will not be hit with a permanent Part B late enrollment penalty.

According to Medicare.gov, if you have COBRA before signing up for Medicare, your COBRA will probably end once you sign up. If you miss signup, you have to wait until the January 1 to March 31 enrollment period, which may cause a coverage gap that will result in a late enrollment penalty.

“This legislation is a commonsense effort to make healthcare more affordable for American seniors by providing a transition period before Medicare late enrollment penalties are applied,” Smucker said, according to the release. “Seniors should be able to make their own choices and enroll in Medicare at an age that makes sense for themselves, not one set by the federal government. I have been fighting for this change to make the enrollment process easier since coming to Congress. I will work to secure support from my colleagues on both sides of the aisle, and look forward to this bill’s passage.”

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CNBC reports that the late enrollment penalty for Part B is 10% of the standard premium — $164.90 for 2023 — for every 12-month period you should have been enrolled but were not. 

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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