Medicare Credits

• In general, if you or your spouse worked for 10 years in Medicare-covered employment, this makes you eligible to receive Medicare Part A benefits paying a premium. Medicare-covered employment is any job you or your spouse held in which you paid Medicare or FICA taxes. For every $1,120 of taxable income, you earn one credit, up to a maximum of four credits per year. It generally takes at least 10 years to earn the 40 credits necessary to enroll in Medicare, but you do not have to earn those credits in consecutive years. Your Medicare eligibility credits do not expire.
  
  

Paying for Medicare

• If you do not have enough working credits to earn free Medicare Part A, you will have to pay a monthly premium of up to $461, depending on how many credits you have earned. If you have earned between 30 and 39 working credits your Part A premium, as of 2011, is set at $254 per month. This amount is in addition to the monthly Part B premium that all Medicare beneficiaries pay. For beneficiaries who were enrolled in Medicare prior to 2010, the monthly Part B is $96.40; anyone enrolling in 2010 or later pays $110.50 per month for Medicare Part B.
  
  

Self-Employment

• You can still earn credits toward Medicare if you are self-employed. When you file your federal income tax return, and have earnings of more than $400 in a year, you pay 2.9 percent of your earnings toward Medicare taxes. In some cases, if you are self-employed you can earn credit if your net earnings are less than $400 in a year. A qualified tax accountant can help you determine if you qualify to earn credits through the optional method.
  
  

Working After Age 65

• When you turn 65, you are automatically enrolled in Medicare if you are eligible. However, if you are still working and have health insurance through your employer, you can decline Medicare Part B coverage until you stop working and no longer have health insurance. You then have eight months to enroll in Medicare Part B; if you wait longer, you will have to pay a penalty for every year that you went without Part B. However, if you turn 65 and do not have enough working credits to enroll in premium-free Medicare Part A, you can keep working until you earn enough credits, and enroll in Medicare at that time without penalty.