Teachable Moments: Romney ‘Turns Down’ Medicare

March 14, 2012 in Health Insurance, Medicare, Member Stories

The web has been full of stories recently about Mitt Romney turning 65 March 12 and “turning down” Medicare.

Many pundits claim Romney made an unbelievable political mistake and has most likely just lost the senior vote. I don’t necessarily agree because I have not seen enough information on any web site to explain the whole situation. I have seen a whole lot of misinformation.

So what we have here is what some like to call teachable moments. Here are at least five:

  1. Did Romney not sign up for Medicare Part A because he never paid any Social Security taxes? (Was all his income always investment income?) If that is the case, he would have to pay full price — $450 a month — for the really bad Medicare Part A Hospitalization insurance (no catastrophic coverage, no coverage if not admitted but only observed, no outpatient coverage, no coverage outside U.S., high co-pays for skilled nursing, up to $6000 a year in deductible payments for hospital visits, and so forth). If that is why Romney “turned down” Medicare, turning it down makes financial sense (but it is still terrible political judgement).
  2. Did Romney pay 10 years of Social Security somewhere along the line? If so, Part A is “free?” Why not sign up even if you never intend to use it? (“Free” is in quotes of course because you have to pay tens of thousands of dollars over your working life to get the “free” insurance.)
  3. Is Romney not retired? “Full retirement age” for those of us born after 1945 or so is 66 or more. Many of us do not take Medicare Part B Supplementary Insurance (that is, doctor and outpatient hospital insurance) until we retire at 66, 67, whenever because we still get insurance from an employer (but it’s still a smart idea to sign up for “free” A as soon as eligible just to get into ‘the system’).
  4. It’s not true as I’ve read in many places that getting Medicare is automatic when you turn 65. That is only the case if you have started receiving Social Security before your “full retirement age.” So most likely Romney did not “turn down” Medicare; he simply did not sign up when first eligible.
  5. It’s also not true as I’ve read in many places that he has another seven months to sign up. He’s already half-way through his seven-month initial enrollment period (IEP).  The IEP extends from three months before your 65th birthday month until three months after your 65th birthday month.

When and if we learn more, there may be more teachable moments. It matters to any future intention to sign up for Medicare whether he’s employed or retired. What’s strange to me is that I’ve never read that he’s still employed. So whose providing his private insurance as a retiree? Bain, I guess.

Maybe it’s the state of Massachusetts although I don’t think he was employed long enough (another political mistake?). And the state GIC would make him sign up for Medicare as a prerequisite for getting its retiree insurance. Nationally over 50% of seniors depend on retiree insurance rather than Medicare Parts A and B but typically — as with the state — your former employer has you sign up for Medicare too (the former employer thinks it paid half your Medicare taxes, remember).

Here’s the $64,000 teachable moment. The one thing I don’t think Romney can be doing is buying private insurance as a 65-year-old individual in Massachusetts. We have a law here in Massachusetts called, unfairly, RomneyCare. I’m not sure but I think the law either explicitly or implicitly says — among other things — that you can’t buy individual private insurance in Massachusetts over age 65 except for supplemental Medicare policies called Medigap. And you can’t buy Medigap if you don’t have Medicare Parts A and B.

But as everyone in the U.S. that can fog a mirror now knows, you have to have insurance in Massachusetts. So where’s Romney getting it?

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