My friend is going on a river cruise in October. She has already started her packing list because this trip is very special and she doesn’t want to be caught unprepared.
I wish those approaching age 65 had the same attitude about Medicare. Knowing what you should do in the years leading up to Medicare can clarify and even simplify, the whole process. Unfortunately, some would rather make a dentist appointment than figure out what they need to do. But, when dealing with Medicare, failure to prepare can not only cost dollars but could also jeopardize your health. Once again, a recent conversation with a client illustrates this.
The client, I will call her Sheila, really needed Medicare. For years, she had been on her domestic partner’s employer group health plan but they recently separated. She had just turned 65 and her Initial Enrollment Period, or IEP, would end the next month. Her first step was to enroll online in Part A and Part B. Right out of the gate, she hit a roadblock. A Social Security agent told her she only had 38 credits and wasn’t eligible to enroll in Medicare. She could go back to work and enroll once she had earned two more credits. (The amount of income that earns a credit in 2024 is $1,730. A person can earn up to four credits a year. Learn more about credits on the Social Security website.)
Medicare Eligibility
If Sheila had discovered she was short on credits a few years ago, she likely would have had time to remedy the situation. And as sometimes happens, the Social Security agent incorrectly told her she could not enroll now. That’s because there are two pieces to eligibility.
- Eligible to enroll in Medicare: Anyone who is at least 65 years old and a U.S. citizen or a legal permanent resident who has lived in the U.S. continuously for at least five years is eligible. Sheila was born in the U.S. and has lived here her entire life. Younger people with disabilities, end-stage renal disease, or amyotrophic lateral sclerosis (Lou Gehrig’s disease) can also qualify when meeting the requirements.
- Eligible for premium-free Part A, hospital insurance: This is where the 40 credits come into play. Those who have the credits can sign up with no premium. Those who have not earned 40 credits can enroll but will pay a monthly premium. Sheila had at least 30 credits so she could buy into Part A at a reduced rate, $278 a month. Those with fewer than 30 quarters of coverage pay the full premium, $505.
Those who need to purchase Part A must enroll during a valid enrollment period. Because Sheila does not have an employer group health plan based on her employment, she needs to enroll during her IEP and must also sign up for Part B. If she misses that chance, she can’t enroll until the General Enrollment Period, January 1-March 31. When enrolling in premium Part A, Sheila also must sign up for Part B.
Sheila proceeded to enroll in Medicare, will pay the premiums, and go back to work. Once she has earned two more credits, she will no longer have to pay monthly premiums for Part A.
Qualifying on a Spouse’s Work Record
It is possible to qualify for premium-free Part A on the work history of a spouse. There are three allowed situations:
- Married for at least one year
- Divorced after a marriage that lasted at least 10 years and now single, and
- Married for at least nine months when the spouse dies and now single.
In all three situations, the spouse must be eligible for Social Security benefits. That means he or she is already collecting benefits, and, if not, is eligible to receive them (earned 40 credits and is age 62 or older).
A spouse’s work history wouldn’t work for Sheila because she was never legally married. She may have had coverage through her domestic partner but, in Medicare’s eyes, that doesn’t count.
Medicare is a very important life event. Start planning for it early. Check out your earnings history through your my Social Security account to determine whether you are eligible for premium-free Part A. Then you will either have time to address an issue or just cross one Medicare to-do off your list.