Washington, DC - Social Security Matters by AMAC’s Certified Social Security Advisor C.J. Miles Association of Mature American Citizens:

QUESTION: I’ll be 65 in a few months and I want my Medicare to start.  However, I’m currently working part-time and living off of savings and I would like to delay filing for Social Security benefits.  Do I have to file for Social Security just to get my Medicare to kick in?

ANSWER: You do NOT have to start your Social Security benefits in order to start Medicare.  In fact, it is important that you start Medicare at the age of 65 regardless of what you are doing with your Social Security so as to avoid late enrollment penalties (unless you have other coverage).

You will have a 7-month initial enrollment period that begins 3 months before your birthday.  In other words, if your 65th birthday is on May 10, 2015, your initial enrollment period will be between February 1, 2015 and August 31, 2015.  However, the longer you wait after May 1st, the later your actual benefits will start, which could cause a late enrollment penalty and/or a gap in coverage.  So even though Medicare gives you 7 months to enroll, you really should enroll during the first 3 months (from February 1st through April 30th).

Just in case you change your mind about Social Security benefits: If you are getting Social Security benefits before your 65th birthday, you will be automatically enrolled in both Medicare Part A and Part B.  In this case, Medicare will send you your insurance card before your birthday.  As long as these are the benefits you want, you do not have to do anything.  Just remember that your Part B premium will be deducted from your Social Security payment unless you specifically request another method of payment.

QUESTION: I'm signed up for Medicare for 2015 for the first time and I was told I'll be paying a premium of $104.90 per month.  I'm really confused. I knew I had to pay for prescription drug coverage, but I have to pay a premium for doctor visits?  Why was I paying Medicare taxes all those years?

ANSWER: Unfortunately, the 2015 premium is $104.90 even after paying taxes.  It can be frustrating, so here is how your taxes have been broken down.  First of all, FICA tax as we call it, which is named for the "Federal Insurance Contributions Act," is 7.65% and is paid for by both you and your employer (or twice as much is paid by someone who is self-employed).  Most of this (6.2%) is for Social Security and the rest (1.45%) is to pay Medicare.  So with this in mind, only 38% of Medicare costs are financed by payroll taxes.  Monthly premiums pay for 13% and general revenues pay for 40%.  The remaining amount is paid for through additional taxes and premiums from higher-income beneficiaries, interest, and other miscellaneous revenues.

Medicare Part A is the only aspect of Medicare that is financed (in part) by payroll taxes.  As you probably figured out when you applied, Part A is free (because of your payroll taxes), but it only covers major medical (which is why it is called "hospital insurance").  The government uses the Hospital Insurance (HI) Trust Fund to pay for Part A coverage.  This is why you have to pay for any additional coverage, such as Part B.  This is also why Part B and drug coverage are voluntary.  You may also want to know that the Part B premium is determined every year so that it covers 25% of Part B costs.  The premiums are deposited into the Supplemental Medical Insurance (SMI) Trust Fund and the remaining costs (75%) are paid for by general revenues.

So even though it seems like your Medicare taxes did not pay for anything, they do cover your hospital insurance (Part A).  Most of what you paid in FICA taxes is actually for your Social Security.

To ask a question about Social Security contact AMAC’s C.J. Miles at This email address is being protected from spambots. You need JavaScript enabled to view it..