AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner (CFP) and have performed fee only investment management and financial planning services for the past 11 years.
Question QUESTION: I am fortunate in that my husband's job will continue our health plan after we retire.
I just read a sentence in a news publication that said a person could not collect Social Security if they do not subscribe to Medicare.
Does this mean that to collect the Social Security that I have paid into all my working life, I must pay into the Medicare system even though I will not be using it?
I could not find an answer on the government sites and there is not a provision to email them.
Thank you for any information that you can share.
ANSWER: Hi. When you start collecting social security at the allowed retirement age, you also become eligible for medicare. At this point in time, if you carry private insurance, the private insurer will not cover medical costs that medicare also covers. However, the private insurance company will typcially cover costs that they normally would and that medicare does not. In other words, even though you do not need the coverage through medicare because of your husbands private insurance, medicare will still end up providing a benefit if costs are incurred. I hope this helps clarify.
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QUESTION: Thank you for your speedy response. If I may, perhaps, just clarify a bit - One of my husband's jobs is with a foreign government. We will be fully covered in retirement by that insurance. We will have no need for U.S. government assistance. Am I safe in assuming that we can both collect our Social Security without having to pay into Medicare? I think you said 'yes' but am sorry that I still am a bit confused.
Answer Hi. Sorry if my prior response was not clear. Since you and your husband have already paid into the medicare system via tax deductions on current and prior earnings, Medicare is an entitlement that is owed to you. Therefore, when each of you starts to collect social security, Medicare coverage is part of this benefit. The additional amount you pay when you start to collect social security is the difference between the govt subsidy portion and the actual cost.
Keep in mind that people who can afford to do so will typically take out supplemental Medicare policies through private insurers and pay for this on their own when they start to collect benefits. This assures they have adequate medical coverage. Since your husband is entitled to benefits from a foreign govt you should check to make sure this covers medical costs incurred while residing in the US. Is it safe to assume you and your husband are both US citizens and will continue to reside in the US during retirement? Assuming so, then I believe the foreign govt benefits will be reduced by any amount they know the US Medicare system will cover. In other words, the foreign govt will not see the need to pay for benefits that your US tax dollars have already provided for in the form of Medicare. If I am correct in understanding your situation, then it may work out that the foreign govt benefits will replace the need for Medicare supplemental coverage. I hope this helps clarify.
