1) It is Mandatory (Sort Of)
Once an American turns 65 years of age and they collect Social Security Benefits, he or she must enroll in Medicare Part A, the section that helps with paying costs incurred with a hospital. Anyone who fits this situation but does not wish to enroll in Medicare is forced to repay their Social Security Benefits. Medicare Part A is free for most individuals who have worked at for least one decade and earned the minimal 40 credits required for coverage or who are the spouse of someone eligible for the program. Anyone not yet collecting Social Security can delay Medicare enrollment without penalty, so long as they meet certain conditions.
2) Medicare Enrollment Cuts off Health Savings Account (HSA) Contributions
Medicare beneficiaries are no longer allowed to contribute into their HSAs but are allowed to use tax-free distributions from their HSAs to cover medical costs. With older workers, this becomes a tough decision between sighing up for Medicare or continuing to put tax-deductible money into their HSA; there is no option to keep full involvement with both programs.
3) The Medicare Part B Enrollment Window Starts Three Months Prior to Your 65th Birthday
Medicare Part B covers outpatient medical services and doctors’ fees. The full window for enrolling in this aspect of the Medicare program begins three months prior to turning 65, the entirety of your birthday month and the three months after then. Anyone who slips up and misses this seven-month window of time is forced to pay a penalty of 10% per year for each year that the person was eligible but did not enroll; this means a 70-year-old person would have to suffer an additional 50% penalty on their party B premium. Additionally, Medicare prescription plans incur a separate 1% penalty per month of delayed enrollment.
4) Working Past Retirement is Valid to Skipping Enrollment
For people who are covered in a group health insurance program with their employer or union, or their spouses, you can put off enrolling into Medicare without incurring the penalties mentioned in the last fact. In these circumstances, a person has eight months after that sort of insurance coverage lapses to sign up for Medicare during a special enrollment period (SEP). Retiree health coverage is not considered creditable coverage but it can be used as a supplemental to fill in the gaps found in Medicare coverage.
5) Medicare Will Not Cover Every Expense.
If you happen to require certain medical services that Medicare cannot help you with, you are going to have to resort to other insurance or means of covering the incurred cost. Even when Medicare will cover something, you are on your own for covering the deductible, coinsurance and copays; this is where Medigap comes in. Some of the items and services uncovered by Medicare tend to be those common to the elderly, such as long-term care, dental, vision, hearing aids and regular foot care.
6) Medicare is a Domestic Program
Medicare is a program that only works within the United States of America. This means that elderly individuals who live and work abroad have a tough call to make: either enroll in Medicare and pay premiums on Medicare Part B despite not being able to use it outside of the country or return to the states and pay hefty penalties for delayed enrollment. Coverage from a forieng health system does not count as creditable coverage for avoiding the penalties for enrolling into Medicare after the seven-month window.
7) Late Enrollment Has Its Own Window
Even if you have made peace with having to pay a penalty for enrolling outside of the nromal window, you may still need to wait over a year to enroll in Medicare. People can only sign up during general enrollment, which falls between January and March of each year for coverage that starts on July 1. This means that an expatriate who comes back home to the USA in June 2022 will have to wait until January 2023 to enroll in a program that will not begin covering his medical costs until July 1, 2023.
8) The More You Make, The More You Pay In
While most people enrolled into Medicare Part B pay the standard monthly premium, retirees with a high level of income tend to pay more. People and married couples with modified adjusted gross incomes (MAGI) exceeding a certain tier tend to pay anywhere from 40% to 320% more than the standard premium each month. These premiums are based on a person’s most recent tax return, so 2022 Medicare premiums reflect income that was reported on federal income taxes from 2020.
9) Premiums Experienced a Relatively Recent Shift
In 2018, the top three tiers of income that determined Medicare premiums were compressed, meaning that higher premiums happened at lower income levels.
10) You Can Appeal Surcharges
If your income has experienced a decline since your last tax return and this decline is because of a major life event like retirement, divorce, or because your spouse passed away, you can appeal the surcharge for having a high level of income; you just need to look over the letter that you receive where it explains your income-related monthly adjustment. You should know that death, divorce, and retirement are all fine reasons to make an appeal; if your income drastically changed for other, positive, reasons, you will have to pay the higher premium. Fortunately for most people, premiums reset each year so any drop in income will be appropriated and reflected in the premiums you pay every year down the line.
