I was doing some research for a client on this topic a few days ago and thought it would be beneficial to post some basics of how the Social Security and Medicare programs interact with each other.
Social Security and Medicare are separate programs serving our country’s senior citizens as well as the disabled. But they do intersect in a big way: Social Security handles enrollment for Medicare Part A (hospital insurance) and Part B (medical insurance).
For most people, Medicare eligibility starts at age 65. If you are already receiving social security benefits at that time, you will be automatically enrolled in parts A and B. If you need a refresher on Medicare, here’s a nice overview of its different parts: https://www.ssa.gov/medicare/plan/medicare-parts.
If you have not yet filed for Social Security benefits, you will need to apply for Medicare yourself. You can do so any time during the initial enrollment period, which lasts seven months. This period starts three months before the month you turn 65 and ends three months after your birthday month. So, if your birthday is July 15th, the sign-up window runs from April 1 through Oct. 31. If you do not enroll during that period, you could end up paying penalty fees if you do so later.
Now let’s look at how you pay for Medicare. Most people don’t pay a monthly premium for Part A because they or a spouse paid Medicare taxes for at least 10 years while working.
For Part B, there is a monthly premium that you pay, currently $174.70 per person in 2024. This is automatically deducted out of your Social Security benefit payments, if you are receiving them. If you haven’t started receiving your Social Security benefit payments yet, you can pay by mail or via online bill payment.
If your annual income exceeds a certain amount, you will have to pay a higher premium for Part B and Medicare prescription drug coverage premiums (also known as Medicare Part D).
Here’s the 2024 table for monthly Medicare premiums:
So, if you are a married couple with a MAGI below $206,000, you’ll only be paying $174.70 each per month in 2024.
Both the Social Security and Medicare programs are so complex. Be sure to do your research or contact program experts to answer your questions.
If you want more details on all things Medicare and Social Security, the best source is here: https://www.ssa.gov/.
Please comment or send an email if you have any questions.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassemanagement.com
