What If I Have Cobra Insurance
COBRA and Medicare coordinate, depending on which form of insurance you have first. It is possible to get COBRA if you already have Medicare, but it is not possible to keep COBRA if you have it before you become Medicare-eligible. It usually ends on the date you get Medicare.
Note that COBRA does not qualify you for a Special Enrollment Period or penalty-free late enrollment. To avoid late enrollment penalties and coverage gaps, you should enroll in Medicare. There is good news: your spouse and dependents may keep COBRA coverage for up to 36 months, regardless of your enrollment status in Medicare.
Does Social Security Count As Income
Since 1935, the U.S. Social Security Administration has provided benefits to retired or disabled individuals and their family members. While Social Security benefits are not counted as part of gross income, they are included in combined income, which the IRS uses to determine if benefits are taxable.
When Do I Get My Medicare Card
In most circumstances, youll get a Medicare I.D. card several weeks after your initial application. However, waiting times can be up to 90 days. If you are automatically enrolled in Medicare because you already get Social Security benefits, you will receive your I.D. card two months before turning 65.
Are My Medicare Premiums Tax Deductible
Medicare premiums are tax deductible. However, you can deduct premiums only once your out-of-pocket medical expenses reach a certain limit.
The IRS has set that limit at 7.5 percent of your adjusted gross income . Your AGI is the money you make after taxes are taken out of each paycheck.
The IRS allows you to deduct any out-of-pocket healthcare expenses, including premiums, that are more than 7.5 percent of your AGI.
So, if you have an AGI of $50,000, you could deduct healthcare expenses after youve paid $3,750 in medical expenses. Depending on your premiums and other healthcare spending, you might not reach this number.
If your spending is less than 7.5 percent of your AGI, you cant deduct any healthcare expenses, including premiums. However, if your healthcare spending is more than 7.5 percent of your income, you can deduct it.
Keep careful track of your out-of-pocket medical expenses throughout the year so you can make the proper deductions at tax time.
You can pay your Medicare bills online or by mail if they arent automatically deducted. You wont pay an added fee for parts A, B, or D, based on your payment method.
There are several ways to pay:
What Is Medicare Part B Medical Insurance
Medicare Part B provides outpatient/medical coverage. The list below provides a summary of Part B-covered services and coverage rules:
This list includes commonly covered services and items, but it is not a complete list. Keep in mind that Medicare does not usually pay the full cost of your care, and you will likely be responsible for some portion of the cost-sharing for Medicare-covered services.
The 2022 Part-B premium is $170.10 per month
For Those Who Qualify There Are Multiple Ways To Have Your Medicare Part B Premium Paid
In 2022, the standard Medicare Part B monthly premium is $170.10. Beneficiaries also have a $233 deductible, and once they meet the deductible, must typically pay 20% of the Medicare-approved amount for any medical services and supplies.
These Part B costs can add up quickly, which is why many beneficiaries search for a way to lower or be reimbursed for these expenses. The good news is they have options that can help maximize their savings while on Medicare.
The Medicare giveback benefit, or Part B premium reduction plan, is becoming more available and popular among beneficiaries. Medicaid also offers programs that pay your Part B premium if you meet certain qualifications, and some retiree health plans may offer reimbursement benefits.
Read on to learn about Part B savings options that you may be able to take advantage of.
Costs And Funding Challenges
Over the long-term, Medicare faces significant financial challenges because of rising overall health care costs, increasing enrollment as the population ages, and a decreasing ratio of workers to enrollees. Total Medicare spending is projected to increase from $523 billion in 2010 to around $900 billion by 2020. From 2010 to 2030, Medicare enrollment is projected to increase dramatically, from 47 million to 79 million, and the ratio of workers to enrollees is expected to decrease from 3.7 to 2.4. However, the ratio of workers to retirees has declined steadily for decades, and social insurance systems have remained sustainable due to rising worker productivity. There is some evidence that productivity gains will continue to offset demographic trends in the near future.
The Congressional Budget Office wrote in 2008 that “future growth in spending per beneficiary for Medicare and Medicaidthe federal government’s major health care programswill be the most important determinant of long-term trends in federal spending. Changing those programs in ways that reduce the growth of costswhich will be difficult, in part because of the complexity of health policy choicesis ultimately the nation’s central long-term challenge in setting federal fiscal policy.”
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Sign Up: Within 8 Months After You Or Your Spouse Stopped Working
Avoid the penalty & gap in coverageIf you miss this 8-month Special Enrollment Period, youll have to wait to sign up and go months without coverage. You might also pay a monthly penalty for as long as you have Part B. The penalty goes up the longer you wait to sign up. How much is the Part B late enrollment penalty?
When Do I Need To Sign Up For Medicare Part A
As stated above, if youre collecting Social Security benefits, youll automatically get Part A and Part B. If youre not automatically enrolled, the best time to enroll in Part A is during your Initial Enrollment Period.
As long as you worked a minimum of ten years, Part A will be premium-free. Even if youre still working, it makes sense to join Part A to help keep your out-of-pocket medical costs to a minimum.
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Sign Up: Within 8 Months After Your Family Member Stops Working
- If you have Medicare due to a disability or ALS , youll already have Part A .
- Youll pay a monthly premium for Part B , so you may want to wait to sign up for Part B.
Avoid the penalty & gap in coverageIf you miss this 8-month Special Enrollment Period, youll have to wait to sign up and go months without coverage. You might also pay a monthly penalty until you turn 65. The penalty goes up the longer you wait to sign up. How much is the Part B late enrollment penalty?
Dont Register For Medicare Alone
If youre uncomfortable with applying for Medicare alone, we can help! Our services are completely free for you. If you would like an agent by your side when applying, contact us. We can walk you through setting up all your coverage, including Medicare, Medigap, Part D, and more.
Plus, when you use us to apply, you get unlimited support from our Client Service Team. That means if you have any issues with claims or appeals, we can help at no additional cost. You can compare rates online or give us a call today at the number above.
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The Cost Of Medicare Part B
Unlike Medicare Part A, Medicare Part B requires a premium from everyone. The standard premium for Medicare Part B in 2021 is $148.50 a month, which applies to most people, including new enrollees. That premium changes each year, usually increasing. In 2022, the Part B premium jumps to $170.10 a month.
Youll also have an annual deductible of $233 in 2021 as well as a 20 percent coinsurance rate for covered services under Part B.
There are penalty fees for not signing up during your Initial Enrollment Period , but well discuss those in a separate section.
While most people pay the standard amounts for premiums and deductibles, some people will pay more, depending on their income. The more you make, the higher your likelihood will be for paying more than the standard amount. The extra fee per month is called the Income Related Monthly Adjustment Amount . How much more can you expect to pay if you fall outside of the standard range? The Medicare website offers a handy chart on the rates for those with higher incomes, which is updated each year. These are the rates for 2022, based on the income reported on your 2020 tax return:
These amounts reflect individual incomes only. Married couples will pay the same rates, but for different, higher thresholds. For example, a couple that earns over $182,000 per year and files a joint tax return will pay $238.10 per month for Medicare Part B premiums. Married couples who file separate tax returns also have different thresholds.
What Is Creditable Prescription Drug Coverage
If you have health insurance in addition to Medicare, this might include creditable prescription drug coverage. The plan must tell you each year whether or not the prescription drug coverage is creditable, meaning it covers at least as much, on average, as Medicares standard prescription drug coverage does. Some common examples of creditable coverage include health insurance from:
- Employer group coverage or union plans
- United States Department of Veterans Affairs
- Indian Health Service
You can continue to use this prescription drug coverage alongside your Medicare benefits without penalty, as long as its creditable.
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Medicare Part B Financial Assistance
Because Medicare Part B requires a monthly payment for its services, some people may find it difficult to pay for the monthly costs associated with this portion of Medicare. Those with limited incomes, in particular, may wonder if there are cost assistance programs in place to help mitigate the financial burden.
In fact, there are a few ways that you can reduce your monthly premiums, or at least make your healthcare more affordable using different programs. One such way is to enroll in a Medicare Savings Program. Run by individual states in conjunction with Medicare, Medicare Savings Plans help you pay for medical costs associated with deductibles, coinsurance and copayments, in some cases. There are four Medicare Savings Programs available, but only three of them relate to Medicare Part B. They are:
The Qualified Medicare Beneficiary Program
- The Qualifying Individual Program
- The Specified Low-Income Medicare Beneficiary Program
Each program has its own eligibility requirements. For example, members of the QI Program must apply every year for assistance. Acceptance is based on a first-come, first-served basis, with priority given to past recipients. You also wont qualify for the QI Program if you receive Medicaid benefits. If you think that you qualify for one of these programs or need financial assistance, then you should contact the Medicaid program in your state to find out more information.
If The Employer Has 20 Or More Employees
As long as you have group health insurance from an employer for which you or your spouse actively works after you turn 65, you can delay enrolling in Medicare until the employment ends or the coverage stops , without incurring any late penalties if you enroll later. When the employer-tied coverage ends, youre entitled to a special enrollment period of up to eight months to sign up for Medicare.
Note that “active employment” is the key phrase here. You cant delay Medicare enrollment without penalty if your employer-sponsored coverage comes from retiree benefits or COBRA by definition, these do not count as active employment.
Nor does it count if you work beyond 65 but rely on retiree benefits from a former employer. You must be actively working for the employer that currently provides your health insurance in order to delay Medicare enrollment and qualify for a special enrollment period later on.
The law requires a large employer one with at least 20 employees to offer you the same benefits that it offers to younger employees . It is entirely your choice whether to:
- accept the employer health plan and delay Medicare enrollment
- have the employer coverage and Medicare at the same time
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Medicare Part B Special Circumstances
Some people dont need Medicare Part B coverage right away, because they have medical insurance through their employers or meet other special conditions. And some people choose not to enroll in Medicare Part B, because they dont want to pay for medical coverage they feel they dont need. There are a variety of reasons why you might hesitate to pay for medical insurance. Likewise, you may be concerned about how the new healthcare laws affect Medicare Part B coverage. In this section, well discuss a few reasons to hold off on Medicare Part B, as well as how Obamacare affects Medicare Part B coverage.
For starters, people who are still working when they qualify for Medicare may not need to get Part B coverage right away. If you have insurance through your employer, then you most likely already have medical coverage. However, you should still meet with your plan administrator to find out how your current insurance works with Medicare, because some policies change once youre eligible for Medicare. Other special situations include the following:
Once you stop working or lose your work-based coverage, you have an eight-month period to enroll in Medicare Part B. If you dont enroll during this time, you may have to pay the late enrollment penalty every month that you have Part B coverage sometimes indefinitely. Also, you may face a serious coverage gap if you wait to enroll.
Medicare Advantage Vs Medigap
People who only have Medicare Parts A, B, and D may incur sizable bills not covered by Medicare. To close these gaps, recipients can enroll in some form of Medigap insurance or in a Medicare Advantage plan .
One important thing to know about Medigap: It only supplements Medicare and is not a stand-alone policy. If your doctor doesn’t take Medicare, Medigap insurance will not pay for the procedure.
Insurance agents are not allowed to sell Medigap to participants of Part C, Medicare Advantage.
Medigap coverage is standardized by Medicare but offered by private insurance companies. According to, Patrick Traverse, founder of MoneyCoach, Mt. Pleasant, S.C.,
“I recommend that my clients purchase Medigap policies to cover their needs. Even though the premiums are higher, it is much easier to plan for them than what could be a large out-of-pocket outlay they might have to face if they had lesser coverage.”
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What Parts A And B Don’t Cover
The largest and most important item that traditional Medicare doesn’t cover is long-term care if the only care you need is custodial. If you are diagnosed with a chronic condition that requires ongoing long-term personal care assistance, the kind that requires an assisted-living facility, Medicare will cover none of the cost. However, Medicare will cover the costs for acute-care hospital services, for patients who are transferred from an intensive care or critical care unit. Services covered could include head trauma treatment or respiratory therapy.
Are Medicare Rules Different If I Have Fehb Coverage
Most people who have retiree coverage must enroll in Medicare Part A and Part B when first eligible. If they dont enroll, their retiree plan may pay only a small amount or nothing at all for their care. Medicares rules for you are different, however, if youre a federal retiree. As a federal retiree, if you dont enroll in Medicare, your FEHB plan will act as your primary insurer and wont pay less because you qualify for Medicare.
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Reasons To Delay Medicare
If youre thinking about deferring Medicare, discuss the pros and cons with your current insurer, union representative, or employer. Its important to know how or if your current plan will work with Medicare, so you can choose the most comprehensive overage possible.
Some of the common reasons you may want to consider deferring Medicare include:
- You have a plan through an employer that you want to keep.
When Will Your Benefits Start
If youre automatically enrolled, your benefits will start the first day of the month you turn 65. You can apply for benefits if youre at least 64 years and 9 months old, do not currently have any Medicare coverage, and arent receiving any Social security retirement, disability or survivors benefits.9
You can also sign up for Medicare by phone by calling 800-772-1213 from 7 a.m. to 7 p.m. Monday through Friday. Or you can visit your local Social Security office.
If you must enroll for Medicare Part B, your coverage start date depends on when you sign up:
|If you sign up for Part B in this month:||Your coverage starts:|
|During first three months of initial enrollment period||The first day of the month you turn 65, or if your birthday is the first day of the month, benefits start on the first day of the prior month|
|The month you turn 65||1 month after you sign up|
|1 month after you turn 65||2 months after you sign up|
|2 months after you turn 65||3 months after you sign up|
|3 months after you turn 65||3 months after you sign up|
You dont have to enroll in Medicare annually, but each year youll have the chance to review your coverage and change plans if desired. You can make changes between October 15 and December 7.11 This is especially important if you know your medical needs may change, so put an annual reminder in your calendar in October to go over your options.
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