High Incomers Pay More for Medicare

Did you know that seniors with higher incomes need to pay more for Medicare?

It’s true, especially when it comes to Parts B and D. If you are above a certain threshold then you need to dig a little deeper in your pockets. These thresholds are announced every year, and the ones for 2021 aren’t out at the time of publishing this article.

What we do know, however, are the thresholds for 2020 which should give seniors an idea of what to expect for next year as well. If your adjusted gross income plus tax-exempt interest is more than $174,000 if married filing jointly or $87,000 if you are single, then you can expect premiums to come with a surcharge.

This surcharge is based on adjusted gross income from two years earlier. In 2020, for example, higher earners paid between $202.40 to $491.60 per month for Part B, based on their income in 2018. In terms of Part D they paid $12.20 to $76.40 on top of their regular premiums.

When to Sign Up for Medicare

Is there such a thing as the best time to sign up for Medicare? Well, yes it is, but it all depends on your own situation, so don’t go off on what everyone else is saying even if it looks like your retirements will match.

Seniors who are already claiming Social Security benefits will be enrolled in Parts A and B automatically, but you can choose to turn down Part B if you want to avoid the monthly costs. If not, the costs will be deducted from your benefits.

You have to sign up for Parts A and B three months before and after you turn 65 if you haven’t started Social Security. This is especially important for seniors who need health care coverage but would like to postpone claiming their benefits until later on during their retirement. Seniors who want their coverage to kick in by the time they turn 65 need to sign up in the first three months, not later.

Then there are those who still have health insurance through a working spouse’s employer coverage or through their own employer. You will be able to delay your sign up but you do to you have to follow very strict rules in order to avoid penalties.