SOCIAL SECURITY AND MEDICARE:
Medicare and Secondary Insurance Coverage

by Linda Ershow-Levenberg, Certified Elder Law Attorney (C.E.L.A.)
January 2012

Why isn't Medicare Part A enough? Why do you need a "medi-gap" policy? Why do you need to choose Medicare Part B when you enroll for Medicare?

To be eligible for Social Security retirement benefits, a worker must pay in 40 quarters by the age of 65 and must file an application. Any person who is eligible to receive Social Security retirement benefits will automatically be eligible to receive Medicare Part A when they reach age 65. There is no cost for Part A. However, you must choose to enroll in Part B when you turn 65, or you will pay a permanent 10% surcharge for the Part B premium for each year that you delayed your enrollment. Further, there are deductibles and co-payments.

Medicare Part A

Premiums are higher for those who have higher annual incomes. "Income" is based on the beneficiary's prior income tax returns. If you have an unusually high income in one particular tax year, you may find that your premiums go up, and later that they go back down. If in 2010 the income was:

Are you married but filing separately? If income was between $85,000 and $128,000, your premium will be $259.70. If income was greater than $128,000, the premium will be $369.10.

Medicare Part B

The Medicare Part B premium is deducted from your gross Social Security check each month. It costs $99.90/month if your annual income is below $85,000, and it rises above that.

Medi-Gap policies are an important component of your household insurance package. They generally cover these co-insurances, co-payments and deductibles. You can compare these at www.medicare.gov. A major illness or catastrophic injury could result in tremendous medical costs that are not covered by Medicare Part A.

If your employer provides health coverage that is at least equivalent to Medicare ("creditable coverage"), you can delay signing up for Medicare Part A and B. If the plan ends, you'll be able to enroll for Medicare Parts A and B without penalty. Be sure to provide documentation of the other plan and its end date. Apply three (3) months before you need the insurance and are eligible.

Medicare Part D Prescription Plans

The monthly premium is based on the plan you choose and also on your income. If annual income for an individual is $85,000 or less ($170,000 if married filing jointly), the cost is just the basic premium for the plan you choose. At higher income levels there is a monthly surcharge starting at $12/month and going up to $69.10/month. These surcharges are automatically deducted from the Social Security check. There may be a late enrollment penalty. It may be advisable to join Part D as soon as you are eligible.

Help with Medicare Problems

Contact the State Health Insurance Assistance Program (SHIP) at (800)792-8820. The Center for Medicare Advocacy provides free legal representation and advice and can be reached at www.nsclc.org.

Medi-Gap Policies

These plans are labeled "A" through "N". The benefit package may include Part B co-insurance or co-payment, Part A hospice care co-insurance or co-payment, the Part A deductible, the Part B excess charges, and the Part B preventive care co-insurance. When obtaining health care services it is crucial to make sure that the provider submits the claim to Medicare as well as your secondary carrier in a timely way to avoid the risk of uncompensated care.

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