social security and medicare Archives

Why the Push?

Republicans believe changes need to be made to Social Security and Medicare because of projected funding shortfalls. The Social Security trust fund is projected to be depleted by 2035. When that happens, benefits paid would be cut to around 75% to 80% of their full amount.

Medicare is also facing funding shortfalls. According to the June 2022 Medicare trustees report, the Medicare Hospital Insurance trust fund will run out of money in 2028. If things continue at their current pace. If this trust fund is depleted, and Medicare does go “belly up”, the program will not have enough revenue to cover all of its operating costs.

In order to combat funding issues for both of these programs, Republicans want to cut spending. Their plan for doing this is to reduce the number of years seniors can claim these benefits. Which is why they are looking to raise the age of eligibility for both.

President Biden is pushing against the proposals. But Democrats are facing headwinds as voters weigh the highest inflation in 40 years and other economic issues.

Fewer Years of Benefits

If Republicans win this fight and the age of eligibility is raised to 70. Seniors who claim Social Security at ages 66 and 67 will miss 3-4 years of benefits. Compared with current retirees or those who opt to claim benefits earlier. And if seniors choose to claim benefits earlier than 70, they will face a permanent reduction in benefits. Retiring three years earlier than the full retirement age would equate to a 20% decline in monthly benefits. According to the Social Security Administration.

“That means that for even those people who work to age 70, you never catch up with the cut in benefits,” said Nancy Altman, the president of Social Security Works, an advocacy group for the benefits program. She added, “It particularly hurts those in low-income, physically demanding jobs” who are more likely to stop working earlier due to health issues.

Work Longer to Keep Insurance

Increasing the age would also mean that Americans between the ages of 65 and 70 would have to work longer in order to keep their health insurance coverage, or purchase their own private health insurance, which can be very expensive.

Postponing eligibility for Medicare “would leave most older Americans age 65 -70 significantly underinsured and threatens their finances and their health,” said Mary Johnson, Social Security, and Medicare policy analyst at The Senior Citizens League, an advocacy group for older Americans.

Increasing the age that older Americans can receive Social Security and Medicare might seem like a good idea to save some money for the programs. But it could mean putting millions of seniors at risk of not having insurance, or falling into poverty. As of now, Republicans are putting the idea out there. But since Democrats have won the majority in the Senate, it seems that older Americans are safe from a rise in the age of benefits eligibility. At least for the time being.

If you’re about to turn 65, then you have a lot to look forward to, including finally being able to take advantage of the Medicare benefits that you’ve worked so long for. You probably already know that once you turn 65, you can enroll in Medicare Parts A and B. But if the ins and outs of Medicare are new to you, take a look at our list of the 7 rules of Medicare that you need to know. These rules will help you avoid penalties, prepare you for the costs of Medicare, and allow you to maximize your benefits.

1. The More You Make, The More You Pay

hand holding a blue bank card — *The IRMAA determines how much you will pay for Medicare premiums.*

Medicare Part B premiums are generally pretty affordable for most: this year premiums are $144.60 a month. However, if your income goes above a certain amount, then you will have to pay more in premiums. The income-related monthly adjustment amounts (IRMAAs) determines the amount you will have to pay. Currently, you will face IRMAA surcharges if you earn over $87,000 individually, or $174,000 jointly.

2. Medicare & HSAs Don’t Go Together

Do you have a health savings account (HSA), alongside either employer-based or private insurance? These accounts are great for putting aside pre-tax money for medical expenses. But, once you enroll in Medicare, they can also cause a tax headache for you if you’re not careful. Don’t worry, you can still use the money that is already in your account., but you can no longer contribute to your HSA. If you do, you will face tax penalties on any money you do contribute.

3. You Can Have Medicare & Private Insurance

If you are one of the many people 65 and older who decide to keep working and put off retirement, then you may be wondering whether you’ll have to give up your employer-based insurance to enroll in Medicare, or vice versa. No need to worry: if you choose, you can have both private or employer-based health insurance and Medicare at the same time. One will be the primary payer and the other the secondary payer, under a process called coordination of benefits. The rule of thumb when you have both employer-based insurance and Medicare is: if the employer has 20 or more employees, then the group health insurance plan will be the primary payer. If the employer has less than 20 employees, then Medicare will pay first.

4. You Don’t Need to Be Collecting Social Security to Enroll in Medicare

Waiting to start collecting Social Security could be a smart option for some people: the longer you wait to start collecting, the higher your monthly payments. And, if you’ve decided to wait as long as possible to start collecting SS benefits, you can still enroll in Medicare without any problems. However, don’t wait to sign up for Medicare! The longer you wait past your initial enrollment period, the more you’ll have to pay for your Part B premiums.

5. You Can Change Your Coverage

calendar with the date October 15 on it — *You can change coverage during the annual enrollment period from October 15 to December 7*

Not happy with the coverage you have? You can change it, but only during the annual enrollment period from October 15 to December 7. During this time, you can change from Original Medicare to a Medicare Advantage Plan, or switch your Advantage plan. Just know that if you have Original Medicare and a Medicare Supplement Plan, switching to an Advantage Plan will mean you will lose your Medicare Supplement Plan. Review your plan every year to make sure that it has not changed and still offers the coverage you need.

6. You Can Dispute a Denied Claim

Mistakes happen. Sometimes Medicare will deny a claim that they should’ve paid. Medicare processes millions of claims a day, and sometimes there is a billing error or a problem with your coordination of benefits. When this happens, you can absolutely dispute the claim. When you get denied for a claim, you will receive a Medicare Summary Notice (MSN) listing the denied claim/s. You need to file your appeal within 120 days of receiving the MSN.

Do not simply accept that a claim was denied. Ask questions and make sure that your denial was not caused by a clerical error.

7. Medicare Supplements Will Help You Save More

Medicare only pays 80% of Medicare Part B costs; you are responsible for the other 20% out-of-pocket costs. These costs can become a burden for some people – and this is where a Medicare Supplement Plan can come in handy. Medicare Supplement Plans are offered by private insurance companies; you pay a monthly premium, and the plan pays most of your expenses not covered by Medicare Part B. For example, if you have a $4,000 ambulance bill and have already met the yearly Medicare Part B deductible, Medicare Part B will pay 80% of the bill. This leaves you to pay the 20% that is left, $800, out of pocket. But if you have a Medicare Supplement Plan that covers Part B copayments and coinsurance costs, then it will pay the remaining $800.

Are you interested in a Medicare Supplement Plan? There are around 10 different types of Medicare Supplement Plans to choose from, and each offers different coverage at different prices. If you want to pay less in out-of-pocket costs, then a Medicare Supplement Plan is perfect for you. EZ gets how time consuming and frustrating it can be to search for the right plan, so we will offer you an agent that can compare all the available Medicare Supplement Plans in your area, and help you choose the best one for your needs and budget. To get your free quotes, simply enter your zip code in the bar above, or to speak with an agent, call 888-753-7207.