My team and I often discuss the issues that we hear first-hand from Medicare beneficiaries. We are fortunate to have a wide-reaching community of Medicare-aged beneficiaries that trust us with their Medicare journey (and the bumps in the road that come with it).
Recently, a member of our team came to me with a question that doesn’t get much air time in the world of Medicare discussions: what options are available to people who do not qualify for free Medicare Part A?
If you are reading this, you are likely looking for some answers yourself. Here’s what you can do if you don’t qualify for premium-free Part A.
Defining premium-free Medicare Part A
I wish we could use a term other than “free” anytime we are discussing Medicare. The reality is, no part of Medicare is free. Though, the reason we talk about premium-free Part A is because most Americans pay Medicare taxes in their working years, providing them the opportunity to enjoy no additional Part A premiums after enrolling in Medicare.
You qualify for premium-free Part A if:
- You are 65 or older (a few exceptions apply)
- AND you or your spouse paid Medicare taxes for at least 10 years
- OR you are eligible for Railroad Retirement benefits
Medicare through your spouse
So, just because you didn’t personally qualify doesn’t mean you’re out of luck. Your spouse’s work history may suffice for you both to have premium-free Medicare Part A.
Here’s a few things to note if you think you will qualify through your spouse:
- Your spouse that paid Medicare taxes must be at least 62 years old for you to be eligible.
- Your marital status matters:
- Married – you must be married for at least 1 year prior to receiving benefits.
- Divorced – if you were married for at least 10 years and you are now single, you are eligible through your former spouse.
- Widowed – if you were married for at least 9 months and you are now single, you will be eligible for premium-free Part A.
Though we haven’t discussed Part B, it is important to know that these eligibility requirements only pertain to Medicare Part A. Medicare Part B and D will almost always require a premium to be paid regardless of your work history.
Paying for Part A out-of-pocket
If you are not eligible for premium-free Medicare Part A through your spouse, it does not mean you cannot get coverage. Though, if none of the previously discussed options pertain to you, be prepared to pay for your Part A coverage out-of-pocket.
In the scenario that you are 65 or older and meet Social Security’s citizenship and residency requirements, you can purchase Part A. The cost of your monthly premium will depend on your work history.
Partial work credits
If you worked in the United States and paid Medicare taxes for at least 30 quarters (one quarter is equal to three working months) you will pay a discounted Part A premium. In 2019, if you have at least 30 quarters, your monthly Part A premium will be $240.
You can also continue working full-time or part-time to try to get to 40 quarters, at which point the Part A would then revert to being premium-free.
No work credits
Now, if you have fewer than 30 quarters you will pay the full Part A premium. In 2019, the premium is $437 a month.
Don’t forget that you will also want to calculate the other parts of Medicare into your monthly premiums as a whole. For example, you cannot have Part A without also having Part B coverage. The current Part B premium for most people is $135.50 a month.
What if I don’t sign up for Part A?
Feeling a little sticker shock? Those numbers are surprising especially when you aren’t prepared to shell out that much each month. Naturally, some wonder what would happen if they just forgo Medicare Part A (and by default Part B) all together.
I can tell you, choosing that route would cost much more in the long run. First, if you decide not to sign up for Medicare in your Initial Enrollment Period, you will be subject to late enrollment penalties. These penalties grow each year that you don’t sign up for Medicare and they stick around for life.
And second, if you don’t enroll in Part A, you don’t have any hospital coverage at all.
So, if the out-of-pocket premiums seem big now – they will only grow bigger if you choose not to enroll at the appropriate time. Contact our office to discuss your options