Enrolling for Medicare: A Primer

SJ Gorowitz Morgan Stanley Medicare Primer

The complexity of Medicare and the myriad options enrollees face can be daunting. Here are some pointers on how to go about enrolling for Medicare, and suggestions on different alternatives such as working with a Medicare advisor. As any American over 65 knows, signing up for Medicare is not simple. There are four different parts, each with different options that can have widely divergent effects on costs and coverage. Enrollees may also wish to supplement their Medicare with private coverage. If you are approaching that landmark birthday, consider the following pointers to guide you through the enrollment process. Start by determining whether you’ll continue to have group coverage through an employer or association. This is an especially important first step for anyone who continues to work past age 65 or who can be covered by a spouse who continues to work. While not all private group plans allow people to keep their coverage after age 65, those that do could help give you … [Read more...]

Affordable Care Act – Beware of the Medicare Surtax for High Income Individuals

Patient Protection and Affordable Care Act

By Stacey Gorowitz, CPA, MBA  Although the Patient Protection and Affordable Care Act was signed into law in 2010, many continued hoping the health care law would go away. We must now accept the tax implications it poses and plan accordingly.  In general, individuals with Adjusted Gross Income (AGI) greater than $200,000 should pay close attention. The two surtaxes, which will be imposed on higher-income taxpayers, effective for tax years beginning after December 31, 2012 include: 1) Medicare Surtax on Earned Income – In addition to the current 1.45% Medicare portion of payroll tax there will be a new 0.9% surtax applied to taxpayers who receive wages or self-employment income in excess of $200,000 for single and $250,000 for joint returns.  This surtax is not imposed until after a taxpayer crosses the earnings “threshold”. 2) Unearned Income Medicare Contribution – 3.8% Medicare tax is imposed on the lesser of net investment income or Modified AGI (specifically defined by … [Read more...]