My wife and I arrived as legal immigrants from Canada four years ago at the age of 63 to be closer to our three children. Having lived in Canada most of our lives, we never contributed to Medicare. Right now I am self-employed and have a small-business health plan through Kaiser. The premiums have escalated from $450 per month to $1,228 per month, with a very high deductible. I am afraid we may have to return to Canada, where we enjoyed free healthcare. I am sure that many parents who join their children in the U.S. are in the same situation and would like to know what other options are available.
For starters, you should look for another small-business health insurance plan with a lower monthly premium. “It wouldn’t hurt to shop around a little bit,” says Sabrina Corlette, a project director with the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute. It’s a good idea to work with a licensed insurance agent to explore your options. You can find one on the National Assn. of Health Underwriters’ website. Go to https://www.nahu.org, select “Consumer Information” and choose “Find an Agent.”
You may also be able to save by taking advantage of the small-business tax credits available as a result of the Patient Protection and Affordable Care Act, according to Christine Barber, senior policy analyst for Community Catalyst, a nonprofit healthcare advocacy organization based in Boston. Under the law, small businesses that pay for at least 50% of their employees’ healthcare coverage may be eligible for a 35% tax credit on the cost of insurance. To qualify, you must employ fewer than 25 people who work full time and earn less than $50,000 a year. So if your wife works with you as an employee, you may qualify for a tax credit for the amount the business spends on your wife’s coverage. In addition, the credit jumps from 35% to 50% in 2014.
But by then, you’ll be eligible for Medicare, the government health insurance program for seniors. According to Corlette, legal immigrants who can demonstrate permanent, continual residency in the country for five years — just one year from now for you and your wife — are entitled to Medicare coverage.
However, just because you can join the program doesn’t mean you’ll pay the same price as Americans who have contributed to the system for much of their working lives. For example, people who have paid FICA payroll taxes for 10 consecutive years can get Medicare Part A (hospital coverage) with no monthly premium. But someone in your position would have to pay $451 per person for 2012.
To cover the cost of doctor visits and other types of outpatient care, you’ll also need to buy into Medicare Part B, which comes with a standard rate of $99.90 per month for everyone.
And for help paying for prescription drugs, you’ll need to buy a Medicare Part D plan. Part D premiums vary significantly, but the 2012 national average is about $30 a month.
Of course, Medicare won’t cover all of your medical costs. For that reason, people also buy a Medigap plan to pay for out-of-pocket costs such as co-pays and co-insurance. Alternatively, as long as you have Medicare parts A and B, you can sign onto a Medicare Advantage plan, which is administered by a private carrier and typically provides all of your benefits under one roof.
This is all to say that having access to Medicare won’t necessarily lower your monthly insurance costs. But, according to Ross Blair, chief executive of PlanPrescriber.com in Maynard, Mass., Medicare is a safer bet than continuing to buy a small-group insurance plan on the private market.
“Medicare is without a doubt a more robust benefit package,” he says. “It’s a good value as compared to private insurance, which will increase [in cost] dramatically as they age.”
And here’s a bit of good news: Assuming you’ve been paying taxes on your small-business income, continuing to work for a few more years will reduce your Medicare Part A premium quite substantially, says Lee Goldberg, vice president for health policy at the National Academy of Social Insurance inWashington, D.C.Once you’ve paid taxes for 7.5 years, your Medicare Part A costs will drop from $451 to $248 per month (based on 2012 numbers). And as mentioned earlier, if you work long enough and pay FICA taxes for 10 years, that premium goes away completely. That would shave more than $900 off the monthly insurance bill for you and your wife, and hopefully allow you to stay in the country and be close to your kids.
Goldberg suggests checking with your local Social Security office to learn more about your tax status. You can find one in your area by visiting https://www.ssa.gov, then navigating to “Locate a Social Security Office” in the “Top Services” box on the home page. You can also call the National Social Security Hotline at (800) 772-1213.
For free personalized Medicare counseling, get in touch with your local State Health Insurance Assistance Program (SHIP). To find the SHIP office near you, click the “Help and Support” tab on the Medicare.gov homepage, select “Useful Phone Numbers and Websites,” click the button to search for a specific organization, then select “SHIP — State Health Insurance Assistance Program” from the pull-down menu. You can also call (800) MEDICARE, or (800) 633-4227.
Zamosky has been writing about how to access and pay for healthcare for more than 10 years.
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