If I go on Medicare, will my provided health coverage still be in effect?
Help! I am so confused. I retired from a company that provides me with healthcare and prescription coverage for the rest of my life. I am now 65 and going on Medicare. My question is, what will happen to my present Cigna "healthcare/prescription" coverage? Will I need to subscribe to Part D or will my present coverage still be available? I think it goes this way: Cigna becomes a secondary coverage to Medicare for part B. Cigna prescription benefit will become my Part D coverage and will continue. Is this correct? I am confused with all of this including time restrictions and donut holes?
Expert Answer
Many people in your situation are confused. That's because Medicare rules are complicated, and neither private insurance plans nor Medicare do a good job explaining these things to consumers. But you actually sound like you have things right.
Let's look first at Medicare Part B. Because your employer-based coverage (with Cigna) is a retiree plan rather than a plan based on current employment, you must sign up for Medicare Part B, which becomes your primary health care coverage for doctors bills and almost all outpatient care. Your employer-based retiree health care becomes a secondary coverage, paying some of the bills Medicare Part B does not pay. How much of these bills Cigna pays depends entirely on the terms of the plan itself. That information you can get from the benefits office at your previous employer.
With regard to prescription drug coverage under Medicare Part D, the rules are different. Under Part D rules, you may remain with your employer-sponsored retiree plan for your drug coverage -- it becomes the equivalent of your Part D plan -- if the plan offers what is called "creditable coverage," which just means coverage that is essentially the same as a regular Part D plan. In that case, you will incur no penalty (in the form of higher premiums) if and when you ever enroll in an actual Part D plan. Check with the benefits office at your former employer to make sure that Medicare considers your Cigna drug coverage to be a "creditable plan." If so, you don't need to do anything -- just keep using that plan. If not, then you might want to consider enrolling in a low-cost regular Part D plan to supplement your Cigna plan. This would avoid any Part D late enrollment penalty, and it might provide you with better coverage than with your Cigna plan alone.