How Does Enrolling for Medicare Work with Social Security?

Social Security and Medicare are social safety programs that Americans pay into during their working years through taxes.

These two programs are interrelated and both will have a definite impact on your finances when you are retired, reports U.S. News & World Report in the article “How Social Security and Medicare Work Together.” Both were designed to help seniors and distribute wealth to the disabled and their families. Social Security was created to help with financial support, and Medicare helps with healthcare costs, like doctor visits, hospital stays and other treatment. They are separate but intertwined in some ways. Understanding how they work together can be helpful, when planning for retirement and while taking benefits.

Eligibility for Social Security and Medicare Both are federal programs managed by agencies within the government. The Social Security Administration determines who is eligible for Social Security benefits and who is eligible for Medicare. The SSA also carries out many administrative functions for Social Security, which can get people a little confused.

To be eligible for Social Security, you must earn enough credits during your working years. The minimum number is 40 credits. One credit is equivalent to $1,360 in earnings in 2019, and you can earn up to four credits per year.

To obtain Medicare benefits, you must be 65 or older, although it is sometimes available to younger people with disabilities and those with permanent kidney failure who require dialysis or a transplant. There are several different parts, including Part A for hospital or nursing home visits and some home health care, Part B for doctor services, outpatient care, and medical supplies, and Part D for prescription drugs. Medicare does not cover all needed health services, however, including long-term care, dental visits, eye exams and hearing aids.

If you are eligible for Social Security, you can start taking benefits at any time between age 62 and 70. However, the longer you wait, the higher your monthly benefit will be. If you start taking benefits before your full retirement age, you’ll get a reduction in your benefits. If you wait until full retirement age, you’ll get an increased benefit. If you wait until age 70, you’ll get the maximum benefit.

Medicare coverage for seniors begins when they celebrate their 65th birthday. If you’ve taken Social Security by the time you turn 65, then you’re automatically enrolled in Medicare Parts A and B, when you turn 65. If you haven’t taken Social Security yet at age 65, then you’ll need to contact the SSA to apply.

Medicare has to be paid for by the individual. The amount owed is different for everyone. It is based on the person’s retirement income and the health plan they select. Most people don’t pay a premium for Part A, and Part B premiums are income dependent. Part D is also based on income.

The SSA looks at income listed on tax returns from two years before the person is enrolled in Medicare. If they got a big bonus in 2017 and retired in 2019, their Medicare premium may be increased. People have to let SSA know they retired and what their earned income is.

If you are receiving Social Security benefits and enroll in Medicare, note that your premiums will be deducted automatically from your Social Security payments. It’s easy and convenient. However, if you aren’t yet taking Social Security, you’ll receive monthly or quarterly bills for premiums.

Reference: U.S. News & World Report (December 4, 2019) “How Social Security and Medicare Work Together”

About the author

Bob Brumfield

Attorney Bob Brumfield has been practicing law since 1984 and regularly receives the “Top Lawyers in California” award as well as the “Client Distinction” and “Client Champion” awards from Martindale-Hubbell.

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