Medicare Part B and Same-Sex Married Couples

Professor Pat Cain at the Same Sex Tax Law Blog brings something up that I hadn’t considered before: the Medicare headaches same-sex married couples face.

When a person turns 65, they’re supposed to sign up for Medicare Part B. Medicare has an enrollment period each year from January through March. If you miss the enrollment period in one year, you can sign up the next year but you have to pay a 10% “premium penalty.”

This doesn’t apply to employees or their spouses who are covered under an employer insurance policy. In that case, the employee and the spouse don’t have to sign up for Medicare until the employee retires or coverage under the policy ends.

The issue for same-sex couples is: a person covered under a spouse’s employer-provided insurance policy is not considered to be married (because of the “Defense of Marriage Act”) and thus the regular “age 65 signup” rules apply. As Professor Cain explains:

That means there are TWO problems that same-sex spouses and partners covered by their partner’s health plan face. One, if your partner retires or benefits from the plan cease at any time other than January through March of a given year, you will be without coverage and unable to sign up for Medicare until the following January. And, for each year that you wait to sign up past age 65 you pay a 10% penalty.

And so, even if you are currently covered by a good health plan past age 65, you might consider signing up for Medicare just to be sure coverage continues. And by the way, if you do sign up and then someone from the local Social Security office calls to say you don’t need to because you’re covered by an employer plan, get that in writing. True story: This happened to a 65 year old partner in Palo Alto, California. Stanford Benefits said she did not need to sign up, but she thought otherwise and so did. The Social Security folks unenrolled her, claiming she didn’t need to sign up because she was covered by the Stanford plan. WRONG! And so they re-enrolled her retroactively to make it effective.

So, this is another ridiculous hoop same-sex married couples have to jump through because of the Defense of Marriage Act.

Find Professor Cain’s full blog post here.