Frequently asked Questions concerning Medicare and the Affordable Health Care Act
NOTE: The Medicare website (www.medicare.gov) is a rich source of information and personalized advice. If you already live abroad, you should consult with the Federal Benefits Unit of the American embassy in the country where you reside for personalized advice. They have direct access to the Social Security files, and have experience with problems specific to people residing outside the US. Website links to American embassies worldwide can be found at http://www.usembassy.gov/.
Q: I am 71 years old. I enrolled with Medicare Part B when I was 65years old. Then we moved abroad, dropped Part B and have used the local health system in our country of residence for 4 years. Now we are returning to the US and need to re-enroll with Part B. What are the penalties after a hiatus?
A: Your best bet is to consult with the Federal Benefits Unit serving your country of residence. The general rule is that your premium is permanently increased by 10% for each full 12-month period in which you were eligible for Medicare Part B but were not enrolled. It is wise to plan your return ahead of time because, unless you qualify to be able to sign up during a Special Enrollment Period, you would have to sign up during the annual General Enrollment Period, from January 1 through March 31 of each year. Coverage would be effective as of July 1. For fuller details see the publication Understanding Medicare Enrollment Periods, available at: www.medicare.gov/Publications/Pubs/pdf/11219.pdf .
Q: What are the implications of the Affordable Care Act for Americans abroad? Will I be penalized for not having American health insurance coverage?
A: Under the Affordable Health Care Act (Public Law 111-148, popularly known as "Obamacare") there is a specific provision that individuals residing outside the United States or residents of territories "shall be treated as having minimum essential coverage" for any month they are qualified under the tax code as "residing abroad."
Q: What effect will the Affordable Health Care Act ("Obamacare") have on Medicare?
A: Your Medicare coverage will remain the same. An excellent article in the AARP Magazine discusses common confusions on the topic: http://www.aarp.org/health/health-insurance/info-09-2012/medicare-and-health-care-reform-myths.html?intcmp=HPBB1C
Q: Will I be subjected to the 3.8% NIIT tax as a result of the Affordable Care Act?
Americans overseas who meet the threshold reporting requirements for Net Investment Income, will be subjected to the NIIT tax. ACA recommends that individuals who meet the threshold levels, contact a qualified tax professional who can best advise as to how the NIIT may affect their tax filing.
For resources on tax preparation please see: http://www.acareturnpreparerdirectory.com/