Can You “Turn Down” Medicare?

February 8, 2012 in Member Stories

There are some confusing news stories out Febuary 8 about a court ruling that found that seniors on Social Security cannot “turn down” Medicare Part A. As explained in the news reports  the plaintiffs want to “turn down” Medicare Part A, the inpatient-hospitalization part of Medicare, because their private employer-retiree insurance is better. Currently about 50% of seniors nationwide get retiree healthcare insurance (but that number is dropping dramatically every year because few retiring baby boomers — except for government employees — had jobs that offered such a benefit). 

According to the AP story:

“…(the plaintiffs’) private insurers limit their coverage because they are eligible for Medicare, but they would prefer the coverage from their private insurers.”

Huh? If that’s the case, then their private employee-retiree insurance is not better? How can insurance that limits their coverage be better? .

A variation on this story is happening among Massachusetts and Rhode Island government retirees but with a twist.

The recent situation in Providence is a good example. Many baby boomers currently retiring from Massachusetts and Rhode Island government jobs never paid into Social Security and Medicare (or did not pay in for enough quarters to qualify). Social Security and Medicare taxes were not required of those hired before the mid 1980s.  Therefore these retirees cannot get Medicare Part A without paying the full cost (and sometimes even a penalty on the $100 a month Medicare Part B doctors-portion premium).  The full cost for just the inpatient hospitalization part of Medicare is around $400 a month.

But the Massachusetts and Rhode Island governments have calculated that it is a better deal for the governments to force the government retiree onto Medicare… even paying the full $400 or so a month premiums for the retirees… as opposed to dealing with the private retiree insurance plans that those in the national lawsuit think are so great.

One final comment on the national case: The plaintiffs claim they want to keep their Social Security because they “earned it” by paying Social Security taxes while working  But they also earned their Part A Medicare the same way. Any lawyers want to weigh in on this? I must be missing something.

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