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Seniors receive two major perks in the United States: Social Security and Medicare. Is there a difference between Medicare and Social security? It’s easy to see how people may wonder if they are the same program because both Social Security and Medicare are social safety programs run by the federal government that Americans pay into during their working years through taxes. In addition, both programs were created to help keep older Americans out of poverty and to support disabled individuals and their families.
While it is clear that the programs have some similarities and are connected in some ways, there are several differences to understand. We hope you find this information helpful.
What’s the Difference Between Medicare and Social Security?
Let’s start by answering the most basic question: are Medicare and Social Security two different things? Yes! Social Security offers retirement, disability, and survivors’ benefits (direct financial support) while Medicare provides health insurance to help pay for doctor visits, hospital stays, and other medical care. Here are some other questions about the differences between Medicare and Social Security answered:
Who runs Medicare?
Medicare is run by the Centers for Medicare and Medicaid Services.
Who runs social security?
Social Security is run by the Social Security Administration. The Social Security Administration is in charge of deciding who qualifies for Social Security benefits AND Medicare benefits. In fact, the Social Security Administration handles a lot of the administrative tasks for Medicare.
How do I qualify for Medicare?
To be eligible for Medicare, individuals must either be age 65 or older or have one of a list of disabilities or permanent kidney failure that requires dialysis or a transplant. While almost all Americans qualify for Medicare when they turn 65*, only those who have paid Medicare taxes for 10 years (themselves or their spouse) will receive Part A (hospital insurance) without a monthly premium.
*Because of the way that people qualify for Medicare, most new immigrants or recent Green Card holders will not qualify for Medicare Insurance.
How do I qualify for Social Security?
To be eligible for Social Security benefits, workers must earn a minimum of 40 credits over the course of their careers. Workers can earn up to four credits per year and monthly benefits are calculated based on each worker’s 35 highest-earning years. Workers may begin collecting their Social Security benefits “early” at the age of 62 at a 30% decreased monthly rate or wait until they turn 67 for their full benefits. Workers must begin collecting benefits by the time they turn 70 but they will receive an increased benefit for waiting past their retirement age of 67.
How do I apply for Medicare?
Seniors who are already collecting Social Security benefits when they turn 65 will automatically be enrolled in Medicare Part A and Medicare B when they turn 65 (Original Medicare). Those who have not begun receiving their Social Security benefits by age 65 will need to contact the Social Security Administration to apply for Medicare benefits.
How do I apply for Social Security?
To apply for social security benefits, workers can fill out a form online, call the Social Security Administration, or visit their local Social Security office.
How Medicare premiums are tied to Social Security
The Social Security Administration uses income tax returns from two years ago to determine the monthly premium each individual will owe for Part B (medical insurance) and Part D (prescription drug coverage). Individuals with high incomes will pay a higher rate.
For most seniors, Medicare premiums (Part B) are automatically deducted directly from their Social Security payments. Seniors who wish to have their Part D or Part C (Medicare Advantage) premiums deducted from their social security checks may do so by contacting the company that sells their plan.
Seniors who are enrolled in Medicare but not yet receiving Social Security benefits will receive monthly or quarterly bills for their Medicare premiums.
Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. Because we represent all the major Medicare Advantage and supplement plans in Hawaii, we are able to offer unbiased advice; all at no cost to our clients.
At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.