Are you eligible? Understand more about your beneficiary eligibility with My Medicare Partners.
We’ve all heard so much about Medicare (the amazing health care you get when you work hard and are ready to retire.)
But is getting Medicare that simple? Do you really just “get” it, or do you have to meet certain qualifications and requirements? What about people who don’t work or who aren’t citizens – can they get Medicare, too?
Before taking advantage of that “amazing health care” you’ve heard so much about for the past 50 years, let’s dig a little more into the guidelines revolving around Medicare.
Rules and regulations are rarely a person’s favorite thing to read about, but like it or not, they must be followed. Medicare is no different.
Every day, I get calls from potential Members asking me if they are eligible for Medicare, when they can start getting benefits, how much they will have to pay… The list goes on.
This blog post is an easy one-stop solution to your questions about Medicare eligibility and Medicare’s rules. If your question isn’t answered here, please give me a call at 1-844-305-6169 and I’ll be happy to address all of your questions!
(Or, better yet, reach me on my direct line at 561-228-1448 or email me firstname.lastname@example.org. When I say I want to be here to help you, I really mean it. Reach out to me at any time!
How Do I Qualify for Medicare?
People legally residing in the United States and people who are US citizens, who have lived in the US for at least five consecutive years, may qualify for Medicare in one of three ways:
- They have “aged-into” the system
- They are on Social Security Disability
- They have End Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (also known as Lou Gehrig’s Disease)
Unlike group insurance coverage offered through an employer many of us are familiar with, Medicare plans are individual. That means that once a person qualifies for Medicare, they must enroll on their own – not with their spouse or family. They must also qualify on their own.
The exception to this may be for spouses who did not work and pay Medicare taxes. People who did not work may use their spouse’s (living, divorced, or deceased) “work credits” to qualify for premium-free Part A coverage.
Most people pay nothing for Medicare Part A, which covers hospitalizations. Almost everyone pays a monthly premium for Medicare Part B. Part B premiums are determined based on your income and may be as low as $121.80 (for people enrolling in 2016 or later).
Qualifying by Ageing In
A majority of folks obtain Medicare by ageing in to the system, which for most people, occurs at age 65. In order to qualify for Medicare, a person has to have enough “work credits” (which are earned by paying taxes while working) and must have paid their taxes.
To qualify for Part A, you or your spouse must have accrued 40 work credits, which equates to about 10 years of paying Medicare payroll taxes while employed. Most people don’t pay any monthly premium to be covered by Medicare Part A.
The Medicare taxes we all pay while in the workforce go towards funding our Medicare Part A – the part that covers hospitalizations – and sometimes, a spouse who does not have enough work credits can qualify for coverage based on their spouse’s work credits.
For example, Mr. White’s wife worked full-time as a stay-at-home mom raising their children, while he worked a regular 9-5 job. When Mr. White aged in to Medicare at age 65, he had enough work credits to qualify for Medicare since he’s been working for over 40 years! Mrs. White never held a salaried job, and therefore has zero work credits, but is also able to qualify for Medicare Part A with a $0 premium because of her husband’s work credits.
The work credit requirement applies to US citizens as well as people legally residing in the US. You should check with the Social Security Administration to determine your and/your spouse’s work credits.
If a person does not have enough work credits, they may still qualify for Medicare Part A, however they will have to pay a monthly premium.
Qualifying by Illness
If a person is under age 65 but is older than 18, they may also qualify for Medicare coverage if they have received Social Security Disability Income benefits (also known as SSDI) for at least 24 months, have been diagnosed with Amyotrophic Lateral Sclerosis (also known as Lou Gehrig’s Disease or ALS), or have been diagnosed with End Stage Renal Disease (ESRD).
Social Security determines if a person qualifies for disability and supplemental income through SSDI. If a person has received SSDI checks for more than 24 months, they may apply for premium-free Medicare Part A coverage at the start of the 25th month of SSDI. However, people diagnosed with ALS do not have to wait 24 months and can begin Medicare coverage as soon as their SSDI begins.
If a person qualifies due to illness or disability, they should contact the Social Security Administration to confirm their eligibility. If a person qualifies due to ESRD or ALS, they should check to ensure they meet other requirements.
Green Card Holders and Other Non-Citizens
People who are not US citizens may also qualify for Medicare coverage as long as they meet the other requirements, such as turning age 65 and paying enough work credits.
Do Immigrants such as green card holders and Permanent Resident Aliens quality for Medicare?
People holding Green Cards or Permanent Resident Cards must reside in the US for five consecutive years before they are eligible to buy Medicare Part A Coverage. Immigrants who have been in the US for less than 5 consecutive years, or who have not worked and paid taxes in the US, may not qualify until these requirements are fulfilled.
Non-citizens who do not qualify for Medicare may obtain insurance by other means, such as through their employer or through the Affordable Care Act (also known as Obamacare) Marketplace. They should check their state’s eligibility rules for more information.
I Qualify For Medicare. How and When Can I Enroll?
Once a person qualifies for Medicare, they may choose to enroll for Medicare Part A and Part B by contacting the Social Security Administration (SSA). The SSA allows for Medicare enrollments over the phone, via the internet, or in person. In some circumstances, folks must go in person to apply.
If you are already receiving your Social Security income by the time you qualify, your enrollment in Medicare Part A and Part B is done automatically! Medicare will mail you your “red, white, and blue” card about three months before the month in which you turn 65.
People who are about to age in to Medicare eligibility may sign up for Part A and B any time during their Initial Enrollment Period (IEP), however, the sooner they enroll, the sooner their coverage begins. In other words, you can, and should, begin enrolling at age 64!
The IEP begins the first day of the month, three months before the month of your 65th birthday. The IEP continues the month of your 65th birthday and runs until the last day of the month, three months after.
For example, if Betty turns 65 on May 14, 2017, she may enroll in Medicare Part A and Part B as early as February 1, 2017. Her final opportunity to enroll during her IEP, and to avoid penalties, is August 31.
When a person enrolls during their IEP, the start date of their coverage may vary. To ensure your coverage goes into effect on the first day of the month in which you turn 65, be sure to enroll before your birth month! Betty, for example, could begin coverage on May 1, as long as she signs up in February, March, or April. A delay in enrolling, even within the IEP, can cause a delay in your effective date.
Remember that the Medicare you “get” when you qualify, or age in, is Original Medicare only: Medicare Part A (hospital insurance) and Part B (medical insurance). There are many gaps in the coverage provided by Original Medicare and many beneficiaries choose to enroll in additional Medicare coverage to keep out of pocket costs low.
*Keep in mind that while Medicare Supplement plans are optional, they are extremely important to help keep healthcare costs controlled!*
What’s even more exciting is that you can sign up for additional coverage through a Medicare Supplement plan even sooner! Medicare Supplement enrollments can be done as early as 6 months before your coverage begins (which is usually the first day of your birth month). Betty can begin signing up for her Supplement plan in December 2016, before she even signs up for Original Medicare’s Part A and B! During the Medicare Supplement’s Initial Enrollment Period, you cannot be denied coverage based on health issues.
How Much Do I Pay for Medicare?
As noted above, most people pay $0 per month for Medicare Part A, as long as they or their spouse have paid enough Medicare payroll taxes (this refers back to work credits). People who do not qualify for no-cost Part A coverage may pay up to $411 per month.
Medicare Part B, the second half of Original Medicare, must be paid for once you qualify. Most people pay the standard amount of $134 per month for Part B coverage. However, some people pay a higher Part B premium based on a higher adjusted gross income. The premium amount you pay is based on prior taxable income and is determined by the Social Security Administration.
If you do not sign up for Part A and Part B when you’re first eligible, you may face a late enrollment penalty (see below).
Do I Need Extra Healthcare Coverage?
Many Medicare beneficiaries find that Original Medicare coverage alone results in high out of pocket costs to them. People wishing to reduce their financial burden can select one of two options for additional coverage: Medicare Advantage (MA) or Medicare Supplement.
Medicare Advantage plans have many restrictions, which you can read more about here. On the other hand, Medicare Supplement plans help control costs and allow flexibility for seniors. Medicare Supplements, also known as MediGap plans, cover the gaps in Original Medicare’s coverage while enhancing the benefits provided under Medicare.
My Medicare Partners strongly recommend seniors enroll in a MediGap plan to ensure their costs are controlled or eliminated.
Health care costs are one of the biggest concerns for Baby Boomers and their parents, and it’s important for people on a restricted income to reduce their financial burdens as much as possible.
Can I Write-Off Medicare Expenses On My Taxes?
I believe in speaking to experts in the appropriate field of work for advice… By no means am I a tax preparer. However, there is one simple way many seniors are able to reduce their tax burden by deducting healthcare expenses.
Many retirees deduct medical and dental expenses from their taxable income. Allowable deductions include Medicare premiums (both Original Medicare and their Supplement or Advantage plan), prescription drug co-pays, and most out of pocket health care expenses.
While the Internal Revenue Service (IRS) broadly defines which expenses may be deducted, it is always recommended to check with your tax preparer before writing off healthcare-related expenses such as transportation to healthcare treatments, long term care, and alternative medicine. Cosmetic surgery and over the counter medications are not allowed to be deducted.
The allowable health care expenses may be deducted from Schedule A on the tax return, only for expenses in excess of 10% of your adjusted gross income.
For example, if your adjusted gross income for the year 2015 was $100,000 and your health care expenses were above $10,000, you could write off healthcare expenses. If your expenses were to totally $9,999 or less, your expenses would not be deductible.
Until the year 2017, people aged 65 and older only have to meet a 7.5% threshold to be able to write off their expenses. Keep in mind that this will be changing for the tax year 2017!
Some seniors are also able to lower their taxable income through retirement plan contribution write offs and charitable contributions, to name a few. Speak with your Certified Public Accountant for more recommendations on lowering the taxes you pay, especially during your Golden Years.
What Are the Penalties For Not Enrolling In Medicare?
Believe it or not, but not signing up for Medicare on time can cost you. If you are not eligible for no-cost Part A, and you choose not to enroll in Part A when you’re first eligible, you may pay a penalty of 10% of the Part A premium cost. You will pay the Part A penalty for twice the number of years you had qualified for Part A but did not sign up.
Late enrollees to Medicare Part B may also pay penalties if they do not enroll when they are first eligible. The Part B penalty will be applied and paid for the remainder of the time the person has Part B – which could be the rest of their life! The Part B penalty is 10% of the premium cost, for each 12 month period during which you qualified for Part B but did not sign up.
Furthermore, people who miss their original opportunity to enroll in Medicare, also known as their Initial Election Period, may have to wait until the once-yearly General Enrollment Period (GEP). The GEP runs from January 1 – March 31 each year, however, the plans are not effective until July 1. The penalty may still be accrued during that time.
Am I Required To Have Drug Coverage?
All Medicare beneficiaries are required to have creditable drug coverage. Yet, most seniors aren’t aware of this since drug coverage is not something you automatically “get” when you qualify for Medicare!
The late enrollment penalty for not having creditable drug coverage is applied to your monthly Part D premium, once you do enroll in a drug plan. You face the penalty if you do not have adequate coverage for 63 or more consecutive days.
The penalty is 1% of the national average premium ($34.10 in 2016), rounded to the nearest $0.10, multiplied by the number of full months you did not have coverage. Of course, the national plan cost changes every year, so the amount you pay in penalty may increase the longer you delay enrolling!
What If I Am Covered By Another Plan?
If you are enrolled in health care coverage through you or your spouse’s employer or union, you may be exempt from enrolling in Medicare Part A and Part B as soon as you become eligible. In this case, you may qualify for a Special Enrollment Period that continues for up to eight months after your employer coverage ends. Or, you may chose to enroll at any time for Part A and Part B coverage before your employer coverage terminates.
If you qualify for a Special Enrollment Period, you may not have to pay late enrollment penalties. However, Special Enrollment Periods vary greatly and only some people qualify in limited circumstances. Check with a licensed Medicare agent before assuming you qualify for a special exception!
Furthermore, you may not be enrolled in a plan through the Marketplace (also known as Obamacare) and Medicare at the same time. Check with a licensed agent to ensure you have adequate coverage.
It’s also important to check with a licensed Medicare agent that you have credible health care coverage, if you choose to forego enrolling in Medicare Part A and Part B. Please note that COBRA coverage does not qualify! Veterans with TRICARE or Veterans Affairs (VA) benefits should consult with an Agent to see if they need additional coverage