Personally opting out of Medicare

[stim4u]

I have been thinking about the possibility of opting out of personal medicare benefits. I was wondering if any other member of the board have contemplated this option. I believe there are new laws (Hill vs. Sabelius) that tie Medicare A with social security benefits. But overall, I believe we have the option to opt out. Take a look at this senario and please provided feedback.

Scenario 1

You average a 1,000,000 USD dollars a year in employment income for the said 47 years

Your Bill: $6,621 for FICA max and $14,500 medicare tax X 47 years or about 1,000,000 USD dollars . If you are self employed and have earned income double these amounts to include both halves of social security.

Alternative: If placed in an investment bearing 8% at $21121 a year for 47 years that would be $10,000,000 USD +.

Conclusion: If you wish to opt out and you have paid guaranteed insurance please go ahead. It is however more likely that the government will give you back closer to 1 million then 10 million. Also if you wish to retain Medicare and forego maximum social security benefits for the return of $311,000 without compounding I can see your point.


My belief is that the well-to-do on this forum will continue to pay over $20K a year for a Medicare program that will not begin until we are much older (>67yo), with massive deductibles or even more future taxes. Do we really need medicare for another 10-15 years when we can save and invest on our own????

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[mid|ine]

I don't think you can "opt out" of the Fica taxes or future eligability for Medicare. You don't have to sign up for medicare when eligable, but theres no point to that.

You CAN opt out of taking medicare patients. I wish I had the volume of private pay patients that I could do that, not that I would, but would be nice to have the option. Of course if they cut payments 30%, there would not be much point in seeing medicare patients.

 

[Aether2000]

I agree. The FICA and Medicare are mandatory taxes, they are not optional.

 

[hyperalgesia]

I would definitely opt out if it were possible. Which is why it's not possible.

 

[emd123]

You can personally opt out of Medicare by not enrolling yourself. You cannot opt out of the tax.

Nice try, though.

 

[stim4u]

I disagree..... you can personally opt out of medicare.

You have 5 options

1) Become Mennonite

2) Become Amish

3) Become Anabaptist

In order to qualify for the IRS's exemption, you must:
•Convince them you are part of a religion that is "conscientiously opposed to accepting benefits of any private or public insurance that makes payments in the event of death, disability, old age or retirement."
•Have a ranking official of this religion authorize that you are a true believer
•Prove that your religion has been established – and continually opposing insurance – since at least 1950

4) Become a Corporation then change to an "S" status take some payroll and receive the majority of income as a distribution of earnings.



Although the 4th option looks like a good option, and it is, there are a few catches, you will need to start a new entity and get new ID's from both federal and state and resubmit any paperwork to the companies who pay you.



5) "Elect" to have your LLC taxed as a Corporation then make the "S" Corp election but your receivables become income immediately. Not necessarily a bad decision if your receivables are low.

 

[Doctodd]

any chance Scientologists can opt out? I know they receive tax exemptions. If it's good enough for Tom Cruise and John Travolta, it's good enough for me.