Medicare coverage is available to individuals age 65 or older, who have been entitled to Social Security disability benefits for 24 months or those who have End-Stage Renal Disease. This guide will cover Medicare coverage for those ages 65 or older. If you have questions about entitlement because of entitlement to Social Security disability or ESRD you should contact the Social Security Administration.
If you are not receiving a monthly Social Security benefit when you attain age 65 you have 3 enrollment opportunities to file for Medicare. The first is the initial enrollment period, the second is the general enrollment period and the third is the special enrollment period.
The initial enrollment period is 7 months beginning with the third month before you turn age 65 and ends the third month after you turn age 65. For example, if your birthday is in June, your enrollment period would begin March 1st and end September 30th.
The general enrollment period is January 1st through March 31st of each year. If you enroll during the general enrollment period the Medicare coverage will begin July 1st. You will be subject to a 10% penalty for each full year you are eligible to enroll in Medicare but wait to file.
The Special Enrollment Period (SEP) is for individuals and their spouses who have an employer group health plan coverage based on current employment. The SEP is the period for enrollment in Medicare Medical Insurance or Premium Hospital Insurance is provided for individuals who are eligible for Medicare Medical Insurance or Premium Health Insurance on the basis of age or as disabled beneficiaries, and have been (or are currently) covered by a group health plan (GHP) or a large group health plan (LGHP) based on current employment status. This is a 7 month enrollment period that begins the first month entitlement to medical insurance based on employment ends. If you are covered by a group health plan, not enrolled in a Health Savings Account (HSA) and do not need the Medicare Medical Insurance, it is strongly suggested to apply for the premium free Hospital Insurance at age 65.
There is a 4th enrollment opportunity but it is for those who are Medicare beneficiaries. The Transfer Enrollment Period is a special enrollment opportunity for Medicare beneficiaries who are also Health Maintenance Organization (HMO) or Competitive Medical Plan (CMP) enrollees and whose HMO or CMP enrollment is terminated either on a voluntary basis or because of termination of the HMO or CMP contract.
If you begin to receive Social Security benefits before the age of 65 you will automatically receive a Medicare card in the mail about 3 months before you attain age 65. If you have not filed an application for benefits you will need to file an application for Medicare at age 65 with the Social Security Administration.
The different parts of Medicare include:
Part A – Hospital Insurance
Part B – Medical Insurance
Part C – Medicare Advantage
Part D – Prescription Drug Coverage
Parts A and B are referred to as original Medicare.
Part A covers expenses when you have to stay as in inpatient in the hospital and skilled nursing care if it follows a stay as an inpatient in the hospital. This coverage is free if you or your spouse worked and earned at least 40 quarters of coverage based on Social Security covered earnings. If you are not entitled to premium free Part A you may be able to purchase Premium Part A Health Insurance.
Part B covers doctor visits, outpatient hospital visits, lab tests and some skilled nursing care at home. You do not need to enroll in Medicare Part B if you are covered by an employer’s group health plan based on you or your spouse’s employment until that coverage ends. See the information on the Special Enrollment Period above. The base premium for Medicare Medical Insurance for 2019 is 135.50 per month. This can be higher based on your income.
Part C or Medicare Advantage is run by private insurance companies. They combine Parts A and B under this plan. Some plans also cover Part D. Some plans have deductibles and others do not. Some plans will only cost the base premium of $135.50 per month the Social Security Administration deducts from your monthly benefit check. Other plans cost more but cover more. You can change plans in the fall of each year.
Part D covers prescription drugs. The plan you pick will be based on where you live, what drugs you take including the strength and frequency of your drugs. You will pay a premium and have out of pocket expenses as each insurance company covers drugs differently. You can change plans as your needs change in the fall of each year.
Medicare Means Testing
A change in the Medicare law affects how monthly Medicare Medical Insurance (Part B) and Medicare prescription drug (Part D) premiums are charged if you have a higher income. Depending on your (and your spouses) income you may have to pay higher monthly premiums for these services.
I am sure your first question is does this affect me? The change will only affect a small percentage of Medicare eligible individuals. The Social Security Administration will determine if you will have to pay higher premiums. Social Security will use your most recent federal tax return information to make this decision. If you must pay higher premiums, a sliding scale is used to make the adjustments. This will be based on your modified adjusted gross income. This is the total of your adjusted gross income and tax-exempt interest income.
If you have a higher income, you will pay an additional premium amount for Medicare Part B and Part D coverage. Here is how it works:
• Part B helps pay for doctors’ services and outpatient care. It also covers other medical services, such as physical and occupational therapy, and some home health care. For most Medicare recipients the government pays a substantial portion—about 75 percent—of the Part B premium and you pay the remaining 25 percent.
Since 2007, higher-income beneficiaries pay a larger percentage of the total cost of Part B based on income they report to the IRS. Higher-income Medicare recipients pay a monthly Part B premium equal to 35, 50, 65 or 80 percent of the total cost, depending on what they report to the IRS.
• Medicare prescription drug coverage (Part D) helps pay for your prescription drugs. The government pays a major portion of the total costs for this coverage and the Medicare recipient pays the rest. Plan costs vary depending on the plan, and whether you get extra help with your portion of the Medicare prescription drug costs.
As they have in prior years, beginning January 1, 2012, higher-income Medicare recipients with Medicare prescription drug coverage will pay monthly premiums plus an additional amount equal to 35, 50, 65 or 80 percent of the total cost depending on what they report to the IRS. The additional amount you pay will be tied to the base premium, not your own premium amount. Because individual plan premiums vary, the law specifies that the amount is determined using one base premium.
In 2019, if you file your taxes as “married, filing jointly” and your modified adjusted gross income is greater than $170,000, you will pay higher premiums for your Medicare Part B and Part D coverage. If you filed your taxes using a different status and your modified adjusted gross income is greater than $85,000, you also will pay higher premiums.
If your income information received from the IRS by the Social Security Administration shows you need to pay higher Medicare premiums, Social Security will send you a letter explaining the reasons for the increase and what your premiums will be. If you have both Medicare Part B and Part D, you will pay higher premiums for both. If you have only one, Medicare Part B or Medicare Part D, you will pay an income-related monthly adjustment amount only on the benefit you have. If you decide to enroll in the other program later that year and you already are paying an income-related monthly adjustment amount, the adjustment will be applied automatically when you enroll.
To determine your monthly adjustment amount, Social Security will use your most recent federal tax return information. Generally, this information is from a tax return filed two years prior (i.e. for 2019, tax year 2017 filed in 2018). If you amended your tax return and it changes the income counted to determine the income-related monthly adjustment amount, let Social Security know. They will need to see a copy of the amended tax return you filed and your acknowledgment receipt from IRS. They will update their records with the information you provide, and correct your income-related monthly adjustment amount, as appropriate.
If your income has gone down due to any of the following situations and the change will make a difference in the income level considered, contact Social Security to explain this and request they make a new decision about your income-related monthly adjustment amount:
• You married, divorced, or became widowed;
• You or your spouse stopped working or reduced your work hours;
• You or your spouse lost income-producing property due to a disaster or other event beyond your control;
• You or your spouse experienced a scheduled cessation, termination, or reorganization of an employer’s pension plan; or
• You or your spouse received a settlement from an employer or former employer because of the employer’s closure, bankruptcy, or reorganization.
If any of the above applies to you, Social Security will need to see documentation verifying the event and how it has reduced your income. The documentation you provide should be related to the event and may include a death certificate, a letter from your employer about your retirement, or something similar. If you filed a federal income tax return for the year in question, you will need to show them your signed copy of the return.
The standard Part B premium for 2019 is $135.50.
If you are single and filed an individual tax return, or married and filed a joint tax return, the following chart will apply:
If you are married and lived with your spouse at some time during the taxable year, but filed a separate tax return, the following chart will apply:
If you disagree with the decision regarding your new premium amount, you have the right to appeal. You may request an appeal in writing by completing a Request for Reconsideration (Form SSA-561-U2) or you may contact your local Social Security office to file your appeal.
You can find the appeal form online at the Social Security website; request a copy through Social Security’s toll-free number at 1-800-772-1213. You do not need to file an appeal if you are requesting a new decision because you experienced one of the events listed above and it made your income go down or if you have shown the information used was wrong.
Conditions for Providing Equitable Relief
Equitable relief is the way of undoing harm caused an individual by the Government’s actions, failure to act, or misinformation. Equitable relief may be granted no matter how few months of coverage or premiums are involved.
The Social Security Administration and Center for Medicare Services may take action to prevent or correct inequity to the individual when his/her Medicare Medical Insurance Premium Hospital Insurance enrollment, termination, or coverage rights are prejudiced because of the error, misrepresentation, or inaction of an employee or agent of the Government.
NOTE: An “agent” of the Federal Government is one who is authorized to act on behalf of the Federal Government in matters pertaining to Medicare, such as a social security employee or an employee of a Medicare carrier. If the evidence shows that an individual received misinformation from someone (e.g., employer, insurance company) which received the misinformation from an employee or agent of the Federal Government, this would also qualify for equitable relief.
• The actions include (but are not limited to) the designation of enrollment and coverage periods, and appropriate adjustment of premium liability.
• The actions may be part of the initial claims process, post- adjudicative processing, or as a result of information or decisions that arise from the appeals processes.
• There is no time limit on granting equitable relief for these errors.
• Where the Government clearly erred, equitable relief can be considered by the Social Security Administration on its own motion without the beneficiary having to ask for it.
Equitable relief applies to Medicare Medical Insurance and Premium Hospital Insurance for those who are age 65 or older, on Social Security disability or have End Stage Renal Disease. This relief, however, does not apply to premium free Hospital Insurance.
An equitable relief decision is not subject to appeal; however, an appeal can be made concerning the correctness of, for example, the entitlement date or the termination date. Additional evidence relating to erroneous information can be presented during the appeals process.
Requirements for Equitable Relief
The elements that the SSA requires for equitable relief to be granted are:
• Government error, misrepresentation, or inaction;
• Prejudice to the individual’s SMI or Premium-HI rights; and
• Evidence of the error.
If you caused or contributed materially to the Government error by fraud or similar fault, equitable relief will not be granted even if the main elements are present in the case.
Prejudice to Medicare Medical Insurance Rights
Prejudice to your rights may consist of:
• carrying private insurance you did not need;
• electing surgery in advance of entitlement because you were misinformed about the entitlement date;
• missing an enrollment period;
• inability to pay a large premium arrearage which accrued due to Government delay; or
• any other hardship with health insurance or health care needs that is traced to Government error, misrepresentation, or inaction on enrollment, premium collection, or termination of entitlement.
What the Evidence Must Show
In most cases, the Social Security file must show that an error occurred, e.g., delay in awarding entitlement, erroneous termination, failure to bill for or deduct premiums, disallowance reversed on appeal. In other cases, an allegation by the beneficiary may be the first indication that an error occurred.
There must be evidence which shows that:
• You took such appropriate and timely measures to assert your rights as could reasonably be expected under the circumstances; and
• Because of administrative fault, delay, or erroneous action or inaction by an employee or agent of the Social Security Administration or the Center for Medicare Services or another Federal Government instrumentality, the enrollment or premium rights will be impaired unless relief is given.
SUBSTANTIATION OF ALLEGED ERRORS
You may allege that your rights were prejudiced due to misinformation received. Such allegations must be substantiated.
The Government employee or agent identified as having given the misinformation (if known) will be asked to report his/her recollection of the event. If the employee cannot recall the interview or discussion, he/she should nevertheless report on the probability that he/she gave the misinformation or misadvise that you claim receiving.
If the Government employee or agent cannot be identified for any reason, a statement will be made by the supervisor or other person in authority as to the likelihood of such an error. This statement may be based on the supervisor’s observations of the type of errors known to have been committed in the local field office, the fact that there was a preponderance of trainees who could have interviewed the beneficiary when the alleged error occurred, etc.
In cases involving alleged misinformation from a teleservice center, the Social Security field office management should assess the likelihood that misinformation was given.
REQUIRED DOCUMENTATION
Equitable relief may not be granted unless the file contains documentary evidence. The evidence can be in the form of statements from employees, agents, or persons in authority that the alleged misinformation, misadvise, misrepresentation, inaction, or erroneous action actually occurred.
In the absence of such personal knowledge, the evidence can consist of a statement that there is a strong likelihood based on personal knowledge or prior experience that an error occurred.
What Does Not Justify Equitable Relief
Relief cannot be provided merely because of hardship or because of “good cause” for failure to enroll. There must be some erroneous action or inaction by the Government which is prejudicial to the rights of the individual.