Question about Obamacare/medicare changes

[csgraff]

With medicare, you've always had to have so many quarters that you paid in to be eligible to draw it when you hit 65. Will it still be the same way under Obamacare, or will all that change?

As unbelievable as it sounds, my former employer did not withdraw medicare from my check because we were covered by a pension system. It was only for persons hired in a certain few years they did this, but I got caught in it. I even requested to have them start and one point, and they said it was not possible. I had some quarters already from HS and college jobs; I am currently "self employed" at ranching. I know there is a way I can pay in or buy quarters toward Medicare; or just get another job until I achieve the amount needed.

Just wondering which way to plan.

 

[imoldernu]

See if this helps.
How Do I Find Out How Many Quarters I Have Earned For Medicare?
I wonder how your employer avoided the FICA requirements.

 

[rbmrtn]

That does sound unbelievable ( and illegal ). All wages are subject to FICA, with some exception. It has nothing to do with being covered by a pension. If you are self employed you have to pay FICA. Something doesn't sound right.

Social Security Wages - Wages Subject to FICA Tax

 

[Mulligan]

I imagine poster worked for a public entity. I know in my state any public school personnel who had been hired prior to 1989, I believe, did not pay into Medicare or Social Security (SSN is still not deducted). If they changed jobs outside of that entity (a school in my place) after 1989, they were integrated into the system. My first few years I did not pay either.

 

[RonBoyd]

I doubt that anything would have changed -- in this area -- with the Affordable Healthcare Act but that is only a guess. Good question, however, and worthy of further investigation.

 

[imoldernu]

found this:

The major exceptions are most civilian federal government employees hired before 1984 (they are covered by and pay the 1.45% tax for Medicare but not for Social Security retirement benefits) and about 25% of state and local government employees with a pension plan. There are also other limited exceptions that apply (e.g., some on-campus college student employment).

Who is exempt from paying the FICA tax in the United States? - eXtension

 

[csgraff]

I imagine poster worked for a public entity. I know in my state any public school personnel who had been hired prior to 1989, I believe, did not pay into Medicare or Social Security (SSN is still not deducted). If they changed jobs outside of that entity (a school in my place) after 1989, they were integrated into the system. My first few years I did not pay either.

You are right. I worked for the Tulsa Police Dept for 25 years. Funny that I could go thru that, and not be eligible for Medicare. I believe this situation only applied to employees hired from about 1979-1985. I am also not eligible for SS. (before you ask, no we get no medical at all. We also pay into our pensions at 7.5%, and draw only 50% after 20 years.)
I've received my SS statements, that tell me I need something like 16 more quarters to be eligible for Medicare. Just wonder if all that is over with now, or what?

I can't imagine how they expect the elderly or poor educated to be able to navigate this system.

 

[Mulligan]

You are right. I worked for the Tulsa Police Dept for 25 years. Funny that I could go thru that, and not be eligible for Medicare. I believe this situation only applied to employees hired from about 1979-1985. I am also not eligible for SS. (before you ask, no we get no medical at all. We also pay into our pensions at 7.5%, and draw only 50% after 20 years.)
I've received my SS statements, that tell me I need something like 16 more quarters to be eligible for Medicare. Just wonder if all that is over with now, or what?

I can't imagine how they expect the elderly or poor educated to be able to navigate this system.

I am in your same situation in regards to SS. When I retired, there were still a few working who were caught in the trap you were if they didn't get enough summer jobs to get the credits. However, they have the option to continue staying on the group plan in retirement. If I read you correctly, you do not have that option. That certainly puts you in a bad spot. I never understood how a government could implement SS and Medicare laws, and then allow public entities to opt out.

 

[csgraff]

I am in your same situation in regards to SS. When I retired, there were still a few working who were caught in the trap you were if they didn't get enough summer jobs to get the credits. However, they have the option to continue staying on the group plan in retirement. If I read you correctly, you do not have that option. That certainly puts you in a bad spot. I never understood how a government could implement SS and Medicare laws, and then allow public entities to opt out.

I can stay with the insurance, as long as I want to pay for it. Its not a great deal, or anything. By the time I'm 65, it would be unaffordable, I think. Already very expensive, and has a $1,000 deductible.
So, I'm paying for something I receive nothing back from, unless something bad happens.

 

[haha]

Already very expensive, and has a $1,000 deductible.
So, I'm paying for something I receive nothing back from, unless something bad happens.

Not to worry, an infected hangnail should blow right by that deductible.

Ha

 

[Animorph]

Can you file taxes as self employed and pay SS and Medicare taxes? Not sure how that works with ranching, but you might be able to supplement with something else if that doesn't qualify. Seems like all you need is qualifying quarters, not big earnings.

 

[rbmrtn]

So, I'm paying for something I receive nothing back from, unless something bad happens.

That's basically the definition of insurance. Screwed if you have it, screwed if need it and don't have. What other industry makes money by denying people service they have paid for.

I just assumed when you said employer it was a private entity. That's tough situation, if you can stay and qualify for medicare that sounds like the way to go. Can't imagine what the premium would be for a 65 yr old.

 

[haha]

Can you file taxes as self employed and pay SS and Medicare taxes? Not sure how that works with ranching, but you might be able to supplement with something else if that doesn't qualify. Seems like all you need is qualifying quarters, not big earnings.

It may be different now, but when I paid attention to this, it took $400 of earnings per quarter to get credit for that quarter. I believe there is also an annual hurdle, so that if you mainly have earnings in one quarter you still can be OK. It also used to be true and may still be true, that you are allowed to ignore your expenses and just report you gross receipts, up to this minimum amount. This is/was true whether you are filing a schedule C or a schedule F.

The code seemed to be bending over backwards to allow people an easy route to qualifying.

Well worth your while to read up on this.

Ha

 

[marko]

IIRC Medicare is available to everyone over 65 regarless of if you paid into it. Or am I wrong (again)?

 

[obgyn65]

You need 40 quarters of contributions from employment, correct ?

IIRC Medicare is available to everyone over 65 regarless of if you paid into it. Or am I wrong (again)?

 

[MichaelB]

US citizens are automatically eligible for Medicare when they reach age 65 if they have lived in the US for the previous 5 years. If they did not pay the payroll tax or do not meet Social Security eligibility, they need to pay Medicare Part A premiums. This is not affected by Obamacare - PPACA.

 

[RonBoyd]

Most people age 65 or older who are citizens or permanent residents of the United States are eligible for free Medicare hospital insurance (Part A). You are eligible at age 65 if:

Big "If" in the case of the current conversation.

 

[csgraff]

US citizens are automatically eligible for Medicare when they reach age 65 if they have lived in the US for the previous 5 years. If they did not pay the payroll tax or do not meet Social Security eligibility, they need to pay Medicare Part A premiums. This is not affected by Obamacare - PPACA.

This is kinda what I was looking for, and expected. I was leery of the overload of data if I searched much on this, but did find this fairly easy. Not the best situation, but its something:


Most Medicare enrollees do not pay a monthly Part A premium, because they (or a spouse) have had 40 or more quarters (10 years) in which they paid Federal Insurance Contributions Act (FICA) taxes. Medicare-eligible persons who do not have 40 or more quarters of Medicare-covered employment may purchase Part A for a monthly premium ranging from $248 to $450. All Part B enrollees must pay a monthly premium ranging from $96 to $238, based on income.

end.

 

[Texas Proud]

I am in your same situation in regards to SS. When I retired, there were still a few working who were caught in the trap you were if they didn't get enough summer jobs to get the credits. However, they have the option to continue staying on the group plan in retirement. If I read you correctly, you do not have that option. That certainly puts you in a bad spot. I never understood how a government could implement SS and Medicare laws, and then allow public entities to opt out.

From what I was taught.... there is that pesky 10th amendment.... the fed gvmt can not tell the states what to do with their employees...

 

[Sue J]

When you file your Federal tax return for your ranching income, don't you pay "self-employment" tax? That's Line 56 on the 1040 and comes from Schedule SE. Your self employment tax is for Social Security and Medicare, both the employer and employee portions. That's how you get credit for self employment.

Or is this all different for ranching income? How long have you been doing the ranching?

Also, if you are married and your spouse has enough credits for Medicare, I think that covers you, too.

DH worked in public employment. He paid into a pension instead of Social Security but Medicare was always withheld so he'll be covered. I checked his SS statement and he's eligible for Medicare.

 

[csgraff]

You know, it just dawned on me a few minutes ago, that I think all this worry is for naught. As my wife has worked, and paid into both for 25-30 years, I can qualify thru her, right? Obviously many homemakers have qualified this way over the years, it just never occurred to me, from my male-type viewpoint.

From what I saw at the SSA website, that should cover me. I feel pretty dense about the whole thing now.

I'd copy-paste, but those posts get held up for moderator approval, I think.

 

[Mulligan]

From what I was taught.... there is that pesky 10th amendment.... the fed gvmt can not tell the states what to do with their employees...

You got me curious. It seems based on what I read that in 1955 Social Security started allowing public workers with pension systems to join if they wanted. So I assume up to that point they were not allowed to even if they wanted to join. In my case, our system voted back in the 1950's not to join the system, and it has been that way ever since. It was of course, an all in, or all out based on majority and it was overwhelmingly voted down.

 

[steelyman]

Here's a summary of eligibility for Medicare that was sent to Illinois university employees in 2006, but really meant for those who had been hired at a time when paying into Medicare was not required (they were presented with a choice as to whether they wanted to start doing so, which was the point of the notice and referendum).

It's a little dated, and much of the full notice is specific to the audience, but may be of interest:

The most typical ways that persons qualify for premium-free Medicare Part A are the following:
• you have 40 Medicare credits
• your living spouse is at least age 62 and has 40 Medicare credits
• you were married to your former spouse for at least 10 years, you are currently unmarried and your former spouse has 40 Medicare credits
• you were married for the nine months before your spouse died, your spouse had 40 Medicare credits and you are currently unmarried (or remarried after age 60)
• Others – contact Social Security Administration at (800) 772-1213

Edit: I think it's important that they qualified it as "Medicare Part A", as many people - say, those in their 40s or 50s - think that once they hit 40 quarters they are home free on their health care costs and refer only to "Medicare" (as I just did). There are multiple "Parts" to Medicare.

The original notice is a PDF that can be found here:

https://nessie.uihr.uillinois.edu/pdf/benefits/Medicare_Referendum.pdf

As the notice says, policies were (and are) subject to future changes, so needless to say I am also very interested in what happens with the PPACA.

 

[Texas Proud]

You got me curious. It seems based on what I read that in 1955 Social Security started allowing public workers with pension systems to join if they wanted. So I assume up to that point they were not allowed to even if they wanted to join. In my case, our system voted back in the 1950's not to join the system, and it has been that way ever since. It was of course, an all in, or all out based on majority and it was overwhelmingly voted down.

I actually looked to see if I could find some proof prior to posting.... with no luck... but, I did not spend much time...

I think in todays political world, they would try and get all employees included, even state and local.... it was a different world back in the 30s...


Edit to add:

http://www.ssa.gov/slge/faqs.htm#a0=-1


It seems that if the state does not cover them, then they are automatically covered...

"Since July 2, 1991, most State and local government employees, who are not covered under a qualifying public retirement system or a Section 218 Agreement, must be covered under Social Security."

 

[Mulligan]

I actually looked to see if I could find some proof prior to posting.... with no luck... but, I did not spend much time...

I think in todays political world, they would try and get all employees included, even state and local.... it was a different world back in the 30s...

Edit to add:

http://www.ssa.gov/slge/faqs.htm#a0=-1

It seems that if the state does not cover them, then they are automatically covered...

"Since July 2, 1991, most State and local government employees, who are not covered under a qualifying public retirement system or a Section 218 Agreement, must be covered under Social Security."

I think you are correct about that. About 5 years ago, the Feds came snooping into our pension system and forced people who were not in a specific defined teaching capacity, like school social workers for example, to start paying into the SS system. This has set back their retirements now because they are not credited with full years now and that some of their money is directed to SS credits instead of full year pension credits. So I definitely think they want more people paying into it.