The cost of Medicare after DOMA for same-sex couples

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In late August, Danielle Moon, director of the Medicare Drug & Health Plan Contract Administration Group, announced equal nursing-home care for same-sex couples. Medicare Advantage plans guarantee individuals care in certain nursing homes where their spouse resides—a right earlier denied for same-sex couples.

Moon made clear that this will apply to couples with valid marriage certificates regardless of their state of residency. “It also applies to individuals of the same sex who were legally married in a state or other jurisdiction without regard to whether they are domiciled in a state or territory that recognizes their relationship as a marriage.”

Increased premiums 

Unfortunately, certain couples will end up paying more for Medicare than they had previously. In the same way that some couples face a “marriage penalty” on their taxes, with a joint return, marital status can raise or lower your Medicare premiums. 

Medicare Parts B and D analyze a couple’s joint income when determining premiums. Most people pay the standard premium every month, but you may pay more if your income exceeds a certain amount. Individuals will pay more for Medicare if their modified adjusted gross income is more than $85,000. Couples will be bumped into the higher-premium tier if their combined income is more than $170,000. Premiums continue to increase as income rises.

Most couples will benefit from the change. A couple in which one partner makes $90,000 annually and the other makes only $30,000 will qualify for the lower premium (whereas before the $90,000 partner had to pay into the next, more expensive tier). On the other hand, a couple in which one partner makes $100,000 and the other makes $80,000 will have a combined income of $180,000, and they will both have to pay the higher premium.

Of course, this difficulty with healthcare is minimal compared to the benefits for the LGBT community as a whole. 

Status of other Medicare benefits is unclear

The status of other benefits, beyond the nursing home, is murkier: states that do not recognize same-sex marriage will likely block access to Medicare benefits. This is because Medicare spousal benefits use a “place of domicile” rule to determine eligibility; it assesses your marital status based on state law.

There are, however, exceptions, with a “place of celebration rule”. If you applied for Medicare benefits while living in a state that did recognize your marriage, you should continue to receive your benefits.

Mike Anderson is an analyst for NerdWallet, a financial-literacy company dedicated to helping consumers make better decisions with their wallet.

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