Medicare & Social Security: How They Work Together

Medicare and Social Security are federal insurance programs that serve older Americans and those with disabilities. Because they both play a role in retirement once people hit their 60s, it’s easy to confuse them. Some people ask: Is Medicare part of Social Security? If not, then what is the difference between Medicare and Social Security? For these reasons and more, it’s essential to understand how they’re similar and how they differ.

Medicare and Social Security are social safety programs offered by the federal government to Americans who contribute throughout their working lives through FICA (Federal Insurance Contributions Act) payroll taxes. Most, but not all, of those who have Social Security also have coverage through one of Medicare’s insurance plans: 70 million are on Social Security, and 64 million are on Medicare. Both programs are available regardless of income.

One similarity provides much of the confusion: you enroll in both programs through the Social Security Administration (SSA).

After enrollment, your Social Security financial support services continue to be administered by the SSA. In contrast, your Medicare health insurance services are all handled through a different agency: the Centers for Medicare & Medicaid Services (CMS).

The services differ significantly:

• Social Security: U.S. citizens or permanent residents aged 62 and over — plus some younger ones with disabilities — receive a monthly check from Social Security which provides a guaranteed lifetime income to help cover living expenses.
• Medicare: U.S. citizens or legal residents over 65 — again with younger exceptions for disabilities — are assisted by Medicare with hospital and outpatient costs, preventive services, doctor visits, and medical supplies.

Also, you don’t have to pay any premiums to receive your Social Security retirement benefits. However, you may have to pay a monthly premium for Medicare Part A (Hospital Insurance) if you haven’t worked for a total of 10 years, and almost everyone must pay the Part B (Medical Insurance) premium.

SSA determines eligibility for Medicare and undertakes many of its administrative functions, including the enrollment process and calculating your Medicare premiums.

Social Security retirement benefits become available to you starting at age 62, but you only receive your full benefits at age 66 to 67, depending on your birth year. Your benefits increase even further if you wait to claim them at age 70. As a result, when some Americans reach the typical Medicare age of 65, they will already receive Social Security benefits.

As you approach age 65, the SSA will determine if you’re eligible for Medicare. Suppose you have already been receiving Social Security benefits (or Railroad Retirement Board benefits) for at least four months. In that case, the SSA will send you a Medicare enrollment package for Medicare Part A and Part B at the start of your Initial Enrollment Period (IEP). This period begins three months before your 65th birthday, and ends three months after the month you turn 65.

For example, if your birthday is September 10, you’ll be contacted in June, and your IEP will run through December. You will be enrolled automatically in Medicare Part A and Part B, and coverage will start on the first day of the month you turn 65. You can opt out of the enrollment if you already have medical coverage through your or your spouse’s employment. However, if you don’t sign up during your IEP and do not have coverage elsewhere, you could face higher premiums for life when you eventually sign up.

One exception is if you live in Puerto Rico. If you’ve claimed your Social Security benefits, you’ll be enrolled automatically in Medicare Part A at 65, but you’ll have to apply for Medicare Part B.

Another situation that triggers automatic enrollment in Medicare Part A and Part B is if you've received Social Security Disability Insurance (SSDI) for 24 months. If you haven’t yet claimed your Social Security benefits, you’ll have to contact the SSA and initiate your enrollment during your IEP to avoid late-enrollment penalties.

The first difference between Social Security and Medicare benefits is the timing of eligibility, with availability starting at age 62 for Social Security and age 65 for Medicare. There are other differences, outlined below.

You may be eligible for Social Security based on the following:

• Your age
• Your inability to work because of a disability
• Loss of a spouse, or of a parent if a young child
• Difficulty paying for essentials such as food, clothing, and shelter

The last three situations trigger disability, survivor, spousal, and Supplemental Security Income (SSI) benefits, each with its own qualification criteria.

Below we are examining age-related eligibility or retirement benefits. To be eligible for Social Security based on age, you must:

• Reach age 62
• Be a U.S. citizen or permanent resident
• Have a minimum of 40 credits earned by you or your spouse as four credits per year, each reflecting at least $1,640 of “covered” employment or $6,560 per year on which Social Security taxes were paid

To be eligible for Medicare, you must:

• Reach age 65 — or younger if you have a disability such as end-stage renal disease or amyotrophic lateral sclerosis (ALS)
• Be a U.S. citizen or legal resident for at least five continuous years before the month you apply for Medicare
• Have worked — or your current or former spouse has worked — and paid Medicare taxes for at least 10 years to get full coverage, although you may still purchase Medicare Part A coverage if your work record falls short
• Be entitled to receive Social Security or Railroad Retirement Board benefits

People often wonder whether you can be eligible for one program and not the other. We’re here to help set the record straight.

Yes. While you need 10 years of payroll tax contributions to be eligible for Social Security retirement benefits, you can fall short of the earnings requirement and still purchase some Medicare coverage.

Yes, for three years. You will be eligible for Social Security at age 62, but not eligible for Medicare until you reach age 65. Also, while you must be eligible for Social Security or Railroad Retirement Board benefits to receive Medicare, the opposite is not the case.

Social Security and Medicare are two entitlement programs that can significantly impact how well you spend your retirement years. If you have any questions, contact OpenMedicare at (844) 910-2061 to speak to a licensed insurance agent who would be happy to assist you.

Please note that we do not always offer every available plan in your area. As a result, any information we provide is limited to the plans we do offer. Please contact Medicare.gov or 1–800–MEDICARE to get information on all of your options.