Medicare deductions from US SS

[Sheryl]

Just started SS at full retirement age and also Part B Medicare.

 

My original notification of entitlement listed a lower payment in the first month than in subsequent months. At the time I just assumed they were prorating as I turned 66 on the 8th of the relevant month.

 

However I have since learned that they do not prorate. The difference is $134, same as Medicare Part B payment, so I assume that for some reason they deducted 2 premiums rather than one. However, my Medicare Part B start date is the same as my SS start date.

 

Is this a feature of how they bill premiums (i.e. do we always pay ahead by one month)? Anybody know?

 

 

[Pib]

When you first start Part B and the premium payment is coming from your social security pension, you pay two months premium upfront as you must pay Medicare upfront for a month of coverage....not after the month...."except when first starting Medicare."  Consider Medicare premiums as pre-pay vs post-pay.  However, when you first start Part B Medicare bends their rule a little in letting you pay the first month Part B coverage later....when you get your first SS pension payment.   

 

So, let's say you started Part B "and started drawing SS on 1 Jan....this means you get your pension payment for Jan the first few days of Feb.   On that very first pension payment in Feb SS deducts the Medicare premium for Jan and Feb....you have now paid Medicare for your Jan coverage (where they bent their upfront payment rule) and paid for your Feb coverage in advance.  

 

After than initial two months of Part B premiums it then switch to one month's Part B premium deduction from your SS pension.  Your early Mar SS pension pays for your March Medicare coverage.

 

If you were not drawing a SS pension but enrolled in Part B then the billing method starts off as a quarterly payment which include prepayment.  But you can change it to a monthly payment scheme.

 

 

[Sheryl]

That explains it, thanks.

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[rodknock]

if you are living outside of the U.S. the part "B" is a waste of money, as you can only use it with in the states.

[Jingthing]

Just now, rodknock said:

if you are living outside of the U.S. the part "B" is a waste of money, as you can only use it with in the states.

Well, if you repatriate and you haven't been paying it, your premium will be higher than if you had.

[GinBoy2]

5 hours ago, rodknock said:

if you are living outside of the U.S. the part "B" is a waste of money, as you can only use it with in the states.

Yeah, I'm with you on that, isn't Part B worthless?

 

In general Medicare is useless outside of the US, but as we all know you need to sign up for Part A at 65 just in case.

But Part B, can't you opt in at any time?

[Langsuan Man]

10 hours ago, Jingthing said:

Well, if you repatriate and you haven't been paying it, your premium will be higher than if you had.

Like 10% more per every year you delayed applying

5 hours ago, GinBoy2 said:

But Part B, can't you opt in at any time?

Yes, if your willing to pay the penalty and wait for the open enrollment period 

 

13 hours ago, Sheryl said:

Just started SS at full retirement age and also Part B Medicare.

You are lucky that it is only $134 , since the Medicare starts at the "old" full retirement age of 65, for us boomer they changed full retirement to 66 , but did not change the Medicare eligibility age, which stayed at 65.  You probably got in before a penalty due to:

 

Quote

If you’re eligible at age 65, your initial enrollment period begins three months before your 65th birthday, includes the month you turn age 65, and ends three months after that birthday. However, if you don’t enroll in Medicare Part B during your initial enrollment period, you have another chance each year to sign up during a “general enrollment period” from January 1 through March 31. Your coverage begins on July 1 of the year you enroll. source:https://www.ssa.gov/benefits/medicare/

  

That being said,  you have a full 12 months to apply and theoretically you can apply and only pay for one month of coverage but still beat the cut off.  In my case it was a real PITA since I was waiting for full retirement (66) I had to pay Part B premiums directly to Medicare before they could be deducted from my SS @ 66

 

Here is an article about it that is easier to understand than the Medicare.gov web site

 

https://www.elderlawanswers.com/turning-65-what-you-need-to-know-about-signing-up-for-medicare--8968

 

[dave s]

5 hours ago, GinBoy2 said:

Yeah, I'm with you on that, isn't Part B worthless?

 

In general Medicare is useless outside of the US, but as we all know you need to sign up for Part A at 65 just in case.

But Part B, can't you opt in at any time?

https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-late-enrollment-penalty

The 10% per year not covered increase in premiums appears to be like the individual mandate of the Affordable Care Act, so you can't wait until you get sick to sign up. US$135 a month is $1620 per year. If you pay this while living in Thailand and do not have other insurance, and get very sick but can still get on a plane, you are ready to be treated at a hospital in USA.

[Pib]

6 hours ago, GinBoy2 said:

Yeah, I'm with you on that, isn't Part B worthless?

 

In general Medicare is useless outside of the US, but as we all know you need to sign up for Part A at 65 just in case.

But Part B, can't you opt in at any time?

Not if you are a military retiree as paying the Part B premium allows you to continue your Tricare medical coverage anywhere on earth once turning 65. Tricare coverage stops once turning 65 "unless" you are enrolled in Medicare Part B.  And when you go back to the US even of a 1 day visit or permanently you are immediately covered by Medicare A/B and Tricare--dual coverage.  Climb back on the plane to go back to Thailand then you are back to just Tricare coverage.

[Sheryl]

Well, if you repatriate and you haven't been paying it, your premium will be higher than if you had.

Yes -- for life. 10% increase for each year you waited.

 

And while you cannot use it in Thailand you can use it back in the US. You can get all your preventive care on trips back as well as any elective procedures you might need. And have the option of returning home for other care as well, which is especially useful if your Thai/expat policy has any exclusions on it.

 

By my calculation I'll get back an average of half my part B premium cost through savings on preventive care. Another 25% I save by having been able to change to an expat health policy that is less expensive and offers better customer service but imposed one exclusionwhich I would not have been comfortable risking if I didn't have Medicare as back up.

 

 

 

 

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[Sheryl]

  
That being said,  you have a full 12 months to apply and theoretically you can apply and only pay for one month of coverage but still beat the cut off.  In my case it was a real PITA since I was waiting for full retirement (66) I had to pay Part B premiums directly to Medicare before they could be deducted from my SS @ 66
 
Here is an article about it that is easier to understand than the Medicare.gov web site
 
https://www.elderlawanswers.com/turning-65-what-you-need-to-know-about-signing-up-for-medicare--8968
 

Actually I got in under a Special Enrollment provision (not open period) and avoided late penalty on grounds of having had insurance through employment while outside the US. People in that group are exempt from requirement to opt into Part B by age 65 provided they are insured throughout the interim.

Turned out that purchasing your own insurance if you were self employed qualified as insured through work. Luckily for me.

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[gamb00ler]

21 hours ago, Sheryl said:

Actually I got in under a Special Enrollment provision (not open period) and avoided late penalty on grounds of having had insurance through employment while outside the US. People in that group are exempt from requirement to opt into Part B by age 65 provided they are insured throughout the interim.

Turned out that purchasing your own insurance if you were self employed qualified as insured through work. Luckily for me.

 

I think I"ll be calling the Medicare folks tomorrow to explore the possibility of avoiding the 10% annual increase in Medicare Part B premiums.  I'm hoping that by being self-employed in Thailand (marriage extension) and having continuous health insurance will allow me to qualify for the Special Enrollment Period(SEP) if we return to USA.   It sounds possible but perhaps not probable.

 

Some info available on SEP available at:

http://www.medicarerights.org/fliers/Part-B-Enrollment/Medicare-Part-B-SEP.pdf?nrd=1

 

How would I get permission to be self-employed as an online consultant for foreign businesses?

[Pib]

Based on my googling it doesn't sound probable either.  However, Sheryl said she did it but maybe she was covered under the group plan for the company she was working for versus a plan she bought on her own while self employed.  Or maybe she was working as an Volunteer for some International tax exempt organization that provided group health care coverage.  Below are some links/quotes from my googling....I bolded some of the text.   But yea, definitely call the Medicare folks....all they could do is say no...or maybe they say yes.

https://www.insurance.wa.gov/sites/default/files/documents/medicare-works-employee-insurance-teach-materials.pdf

Quote

 

5. How does Medicare coordinate with current employee insurance if I am self-employed? If you are self-employed and provide coverage for yourself and at least one other person, Medicare considers you to have current employee insurance. (Medicare calls this a group health plan through current employment status.) If you have coverage through an association, such as the local Bar Association, you are also considered to have current employee insurance. It is important to have current employee insurance, because this allows you to use the Part B Special Enrollment Period (SEP) if you decide to delay Medicare enrollment (see questions 9 and 11). If you are self-employed and have insurance that only covers you, you will not be able to use the Part B SEP.

 

9. What is the Part B Special Enrollment Period (SEP)? The Part B SEP spans the time that you are covered by insurance from your, your spouse’s, or in some circumstances, your family member’s current work. You have this SEP while you are covered by insurance from current work, and it extends for eight months after the coverage or work ends, whichever is sooner. This SEP only applies to insurance from current work. If you use this SEP, you will not have a late enrollment penalty for delaying Part B enrollment. There is one exception: If you are eligible for Medicare due to disability, and covered by insurance from a family member’s current work at a company with fewer than 100 employees, you will not have an SEP to sign up for Medicare if you delay enrollment when you are first eligible. You will get an SEP if you are covered by a spouse’s current employee insurance from a company with fewer than 100 employees, but you will not have an SEP if you are covered by insurance from another family member, such as a sibling. You will get an SEP if the family member’s current employee coverage is from a company with more than 100 employees. If you are eligible for Medicare due to disability and covered by insurance from a spouse or family member’s current work, make sure you understand SEP rules before making decisions about delaying Medicare enrollment. Also note that you will not get this SEP if you delay Medicare enrollment while covered by retiree insurance, or if you are self-employed and covered by an individual plan (meaning your plan only covers you). If you delayed Medicare enrollment, you would have to wait for the General Enrollment Period to enroll in Medicare, and you would likely have a late enrollment penalty (see question 10). The General Enrollment Period (GEP) lasts from January 1 through March 31 each year, and coverage becomes effective on July 1

 

 

https://www.cms.gov/Medicare/Eligibility-and-Enrollment/OrigMedicarePartABEligEnrol/

Quote

 

Special Enrollment Period (SEP) for International Volunteers

Individuals who do not enroll in Part B or premium Part A when first eligible because they were performing volunteer service outside of the United States for at least 12 months on behalf of a tax-exempt organization and had health insurance that provided coverage for the duration of the volunteer service may enroll during this SEP.

Policy for when enrollment for volunteers can occur

The SEP for volunteers is the 6-month period that begins the earlier of the first day of the month following the month for which the:

• individual was no longer serving as a volunteer outside of the United States;
• organization no longer has tax-exempt status; or
• individual no longer has health insurance that provides coverage outside of the United States.

NOTE: Enrollment in Part B or premium Part A may not occur prior to the end of the IEP.

 

 

[Sheryl]

I think I"ll be calling the Medicare folks tomorrow to explore the possibility of avoiding the 10% annual increase in Medicare Part B premiums.  I'm hoping that by being self-employed in Thailand (marriage extension) and having continuous health insurance will allow me to qualify for the Special Enrollment Period(SEP) if we return to USA.   It sounds possible but perhaps not probable.
 
Some info available on SEP available at:
http://www.medicarerights.org/fliers/Part-B-Enrollment/Medicare-Part-B-SEP.pdf?nrd=1
 
How would I get permission to be self-employed as an online consultant for foreign businesses?

I was likewise doubtful but called and was told, several times by several different SS staff, that self purchased health insuranceby a self employed perdon qualified. I then filled out the SEP application and it was accepted.

Of course my tax returns prove the self employment and that I had insurance.

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[Pib]

6 minutes ago, Sheryl said:

I was likewise doubtful but called and was told, several times by several different SS staff, that self purchased health insuranceby a self employed perdon qualified. I then filled out the SEP application and it was accepted.

Of course my tax returns prove the self employment and that I had insurance.

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Sheryl,

  Did you have attached/include any proof.....like past/paid policy statements showing coverage?  Or you just signed a doc saying your had the coverage...they just took your word for it?

[Sheryl]

Sheryl,
  Did you have attached/include any proof.....like past/paid policy statements showing coverage?  Or you just signed a doc saying your had the coverage...they just took your word for it?

They did not require any attachments. I don't recall exactly what was on the form but I know I accurately reported the circumstances. Whether there was any cross checking against my tax returns I have no idea.

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[Pib]

1 minute ago, Sheryl said:

They did not require any attachments. I don't recall exactly what was on the form but I know I accurately reported the circumstances. Whether there was any cross checking against my tax returns I have no idea.

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Sounds like the embassy income letter we use to be able to get.  ????

 

But seriously thought, I expect they must have done some kind of checking...maybe federal income tax form or something.  Just seems too easy for them just to take a person's word for it.

[Sheryl]

Sounds like the embassy income letter we use to be able to get.  [emoji6]

 

But seriously thought, I expect they must have done some kind of checking...maybe federal income tax form or something.  Just seems too easy for them just to take a person's word for it.

That is my assumption since Fed tax return would have the necessary information.

 

But I don't really know.

 

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[Pib]

4 minutes ago, Sheryl said:

That is my assumption since Fed tax return would have the necessary information.

 

But I don't really know.

 

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Did you get a Form 1095B for your coverage....maybe from your insurance company or employer?

https://turbotax.intuit.com/tax-tips/health-care/what-is-form-1095-b-health-coverage/L0jqu5ejD

[gamb00ler]

I have a 20 year long record of self-employment and 5-6 years of continuous health insurance coverage so I wouldn't be doing anything that much different, just doing it from Thailand.  I'm not sure if it matters but my insurance has never been for myself only.  It has always been a family plan covering my wife also.  She is also self-employed in the same business.  I just learned that the IRS will actually allow us to file as a Qualified Joint Venture.

 

I wonder if CMS is fully staffed for inquiries on weekends.  I will probably wait for Monday morning to call.

 

My wife and I both started Medicare coverage in the last half of 2018 without starting our Social Security yet.  We were planing on moving to Thailand by now, but have delayed that by a few months.

[Sheryl]

34 minutes ago, Pib said:

Did you get a Form 1095B for your coverage....maybe from your insurance company or employer?

https://turbotax.intuit.com/tax-tips/health-care/what-is-form-1095-b-health-coverage/L0jqu5ejD

 

No form 1095B. I was self employed so there was no other "employer" and my insurance was international not US company.

 

I was not asked to produce this form either.

 

I completed 2 forms as follows, per instructions I was given over the phone:

 

1. OMB No. 0938-1230, which is the standard application for enrollment in Part B.

 

2.OMB No. 0938-0787 which is entitled "Request for Employment information" so specific to the circumstance of having been covered by insurance while employed. On this form, Section A I put my own name and address where it asked for Employer's name (line 1)  and address (line 3) and added "self-employed" in parenthesis. Lines 4 and 5, Applicant's name and Employees name are both my name.  In Section B ("to be completed by employers" I filled it out myself. And I signed as employer.

 

In addition to having called them to see if this was allowable, I submitted the form at a SS office in person while back in the US for a visit and again discussed the fact that I had been self employed and purchased my own insurance  with SS representative.

 

 

 

 

[Pib]

So, basically you completed  CMS-40B and CMS-L564 forms as talked at below weblink and snapshot below.

https://www.cms.gov/Outreach-and-Education/Find-Your-Provider-Type/Employers-and-Unions/Medicare_Employer_Forum_v2.pdf

 

And this SSA POMS gives specifics instructions. 

https://secure.ssa.gov/poms.nsf/lnx/0600805290

 

 

 

 

[Sheryl]

Yes, those are the forms.

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[joealx]

On 4/4/2019 at 9:02 PM, rodknock said:

if you are living outside of the U.S. the part "B" is a waste of money, as you can only use it with in the states.

If you've retired from the U.S. govt. and have their Blue Cross Basic with Medicare Part B insurance, You can get a cashback of $600. Also, You can use the plan overseas and pay no deductibles and no copays.

[keemapoot]

1 minute ago, joealx said:

On 4/4/2019 at 9:02 PM, rodknock said:

if you are living outside of the U.S. the part "B" is a waste of money, as you can only use it with in the states.

If you've retired from the U.S. govt. and have their Blue Cross Basic with Medicare Part B insurance, You can get a cashback of $600. Also, You can use the plan overseas and pay no deductibles and no copays.

Yeah, and if you are just a normal private sector expat, I agree with Cheryl's rationale stated above. Even if you have no plans to return to live in the US, it's wise to pay the part B premium as it's a pretty cheap way to ensure you have coverage in event of some major event that is not covered in Thailand, or for which you believe you would receive better treatment for in the US. This is provided you are mobile enough to get on an airplane and have the cash to support your stay in the US and any family members that may be needed.

[JimGant]

2 hours ago, keemapoot said:

This is provided you are mobile enough to get on an airplane and have the cash to support your stay in the US and any family members that may be needed.

Ah, yes -- the proverbial turd in the punch bowl.

[Langsuan Man]

One other thing that no one has brought up is that if you are a high income retiree or become one when you hit Required Minimum Distribution (RMD) @ age 70 1/2 you are subject to an earning penalty called Income Related Monthly Adjustment Amount (IRMAA) which is based upon you Adjusted Gross Income (AGI) which is recalculated to become Modified Adjusted Gross Income (MAGI) when certain tax free or other types of income are included.  Here is the income and premium penalty chart for 2019:

 

[Pib]

LM,

   And above chart is why I want to come live with you since I like rich people as I know you get (or got) hit with the surcharge.  ????

 

 

[keemapoot]

36 minutes ago, Langsuan Man said:

One other thing that no one has brought up is that if you are a high income retiree or become one when you hit Required Minimum Distribution (RMD) @ age 70 1/2 you are subject to an earning penalty called Income Related Monthly Adjustment Amount (IRMAA) which is based upon you Adjusted Gross Income (AGI) which is recalculated to become Modified Adjusted Gross Income (MAGI) when certain tax free or other types of income are included.  Here is the income and premium penalty chart for 2019:

 

Damn, thanks for informing us of that. I never knew that and makes a big difference especially for those of us who are retiring at later ages. As I understand it, they calculate the premium surcharge based on your last calendar year earnings, so that if you are paying a surcharge during the time you are working, when you retire, if your annual earnings go below those amounts, your surcharge would reduce or be eliminated if below the MAGI?

 

This creates an interesting experiment I guess, in calculating the difference in waiting to claim medicate part B until earnings subside, and paying the penalty for late filing, vs. starting at age 65 and paying the surcharge for as many years as your income is high.

[Langsuan Man]

20 minutes ago, keemapoot said:

if you are paying a surcharge during the time you are working, when you retire, if your annual earnings go below those amounts, your surcharge would reduce or be eliminated if below the MAGI?

The MAGI is only for determining Medicare Premiums penalty and your adding "surcharge"  into the mix would cause confusion. 

 

What I think you are getting at is if your MAGI goes down then your penalty goes down.  Which is how it works, since Medicare will send you a letter every year telling you what your penalty will or will not be that year.  For two reasons, the penalty amounts change yearly and your income changes yearly

 

Remember that IRS has to report your MAGI to Social Security / Medicare based upon your previous years tax filing so the MAGI will always be a year or more late

 

Looking at the above chart it appears to me that most married couples would not have a problem, but not so for single filers 

 

28 minutes ago, Pib said:

And above chart is why I want to come live with you since I like rich people as I know you get (or got) hit with the surcharge.  

No you don't Pib , I snore