I just got my annual Medicare guidebook called “Medicare and You 2024” in the mail. I’m assuming this booklet is mailed to everyone in the country who is on Medicare. So, if you are on Medicare, I’m sure you got one too.
Regular readers of this column know that I’ve pointed out a thousand times that I am a Social Security expert but that I know very little about Medicare. Still, I get questions from readers all the time asking me about Medicare. My reply is almost always the same. I refer them to a Medicare expert. And that would be someone called a “SHIP” counselor. That stands for State Health Insurance Program counselor. To find the SHIP nearest you, go to www.shiphelp.org.
But I am going to spend the rest of this column relaying some interesting tidbits about Medicare. It won’t be anything even close to a “guide” to Medicare. If you’re looking for that, read the 2024 edition of “Medicare and You” I mentioned at the beginning of this column.
So here are my Medicare tidbits. They are just some interesting pieces of information about the Medicare program I’ve learned over the years.
The first tidbit is this: why don’t I know anything about Medicare? Many of you probably think I should because I worked for the Social Security Administration for 32 years, and in most people’s minds, Social Security and Medicare are inextricably linked. Part of the reason for that is because the Social Security payroll tax (6.2%) and the Medicare payroll tax (1.45%) used to be lumped together as a 7.65% FICA tax deduction. (FICA stands for Federal Insurance Contributions Act.) But FICA, which used to be shown on everyone’s pay stub, is kind of a dying term. For many years now, pay stubs have listed the Social Security tax and the Medicare tax separately. Still, people link the taxes and thus link the programs.
Another reason people lump Social Security and Medicare together is because you usually have to deal with the Social Security Administration to get enrolled in Medicare. Why is that? It makes for an interesting story.
When Medicare was first passed in the 1960s, Congress didn’t know what to do with the program from an administrative standpoint. So, they essentially dumped it on the SSA and said, “You guys figure out how to run Medicare.” The SSA created a whole separate division to do that, called the “Bureau of Health Insurance.” It was always kind of a stepchild within the agency because, after all, our primary job was to maintain earnings records for all working Americans, take claims for Social Security benefits and pay monthly benefits that would be based on those earnings. This Medicare stuff was as foreign to most SSA employees as it was to most Americans.
Top government administrators finally figured this out and decided that Medicare, with all its complexities, needed a dedicated agency to run it. So, in 1977, the Health Care Financing Administration was created. (In 2001, it changed its name to the Centers for Medicare and Medicaid Services.)
But still, a connection between Social Security and Medicare continues. Because HCFA, and then CMMS, don’t have field offices around the country, they farmed out the Medicare enrollment process to the SSA. So that’s why still today, you will usually work with the SSA to sign up for Medicare. Also, the Medicare Part B premium comes out of your Social Security check. (More about that in a minute.) But other than that, the SSA has nothing to do with the Medicare program.
Let me share an interesting personal tidbit about Medicare and my early days with the SSA. I was hired by the SSA in 1973 and my first job was one that helped Social Security beneficiaries with any issues they had after they went on the program, like changes of address or maybe some kind of problem with their Social Security checks. But it also included Medicare post-entitlement issues. And here is what that meant in real life. Nice little old ladies would show up at my desk with a shoebox full of medical bills and say, “Would you turn these in to Medicare for me?” Gosh, those were the old (and not necessarily good) days!
There is one more piece to this story. I was hired in March 1973 to work in the Litchfield, Illinois Social Security office. But the office was a few weeks away from opening and I was waiting in the nearby Springfield, Illinois office to be sent to a training class. While I was waiting, Litchfield had a little “grand opening” celebration, and I was invited. I don’t know why, but the Litchfield office manager introduced me by saying, “Tom will be our Medicare expert.” OMG! After the ceremony, I think every old person in Litchfield came up to me with Medicare questions. I can’t remember now how I ducked those questions. And here I am today, 50 years later, still ducking questions about Medicare. But I hope, dear readers, at least you now understand why I don’t know much about the program.
And here are a couple more little Medicare tidbits I do know that I hope you find interesting. For example, did you know that the Medicare payroll tax, currently 1.45%, only pays for the hospital insurance part of the program, more commonly known as Part A?
The other main part of the program, “doctor’s insurance,” or Part B, is paid for by a monthly premium usually deducted from someone’s Social Security check. And even though people always complain about the amount of that premium, currently $164.90, it actually only pays for 25% of the cost of running the program. The taxpayers pick up the other 75%. For years, many have argued that senior citizens should pay a bigger share of the Part B costs. That’s why in the early 2000s, Congress decided that wealthy Americans should pay more. And they do. Trouble is, sometimes people are temporarily “wealthy” because they sell some property or cash in some investments. So, for a couple years, they pay the wealthy person’s premium before going back to the regular premium. And this leads to all kinds of problems and questions. If you have such questions, contact the SHIP I mentioned earlier.
One last little tidbit. I’ve been talking about the Part B premium, which comes out of your Social Security check. You probably know that those checks are paid one month behind. So, the Social Security check you get in October is your September Social Security payment. But did you know that the Medicare premium that comes out of that check you get in October is for the month of October? In other words, the check is for the prior month, but the Medicare deduction is for the current month. Weird, huh?
If you have a Social Security question, Tom Margenau has two books with all the answers. One is called “Social Security — Simple and Smart: 10 Easy-to-Understand Fact Sheets That Will Answer All Your Questions About Social Security.” The other is “Social Security: 100 Myths and 100 Facts.” You can find the books at Amazon.com or other book outlets. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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