How to determine if you are eligible for Medicare based on your work history and Social Security benefits

Medicare and Social Security eligibility

Social Security is a broad social insurance program that provides retirement, disability, and survivor benefits. On average, it replaces around 42% of an average wage earner’s benefit. As individuals approach the age of 65, they may have questions about beginning their Social Security benefits and how their Social Security benefits may help with Medicare coverage.

How Do I Qualify For Social Security Benefits?

To qualify for Social Security, you need to be at least 62 years old, have worked for at least 10 years with Social Security taxes, and have earned 40 credits. You can also qualify based on your spouse or ex-spouse’s work record.

You have several options when choosing when to file for benefits, including continuing to work and receiving reduced benefits if you earn more than the yearly earnings limit, or stopping work and receiving benefits based on your highest 35 years of earnings. You can also continue working and not receive benefits, which will increase your benefits each month until you turn 70, or stop working and not receive benefits, which may make sense if you have other sources of income.

If you start your benefits before the full retirement age, they will be reduced for each month before the full retirement age. If you delay your benefits until full retirement age, you will be eligible for delayed retirement credits.

How Social Security Benefits Can Help With Medicare?

Enrolling in Medicare Parts A and B is handled by Social Security. If you are receiving those benefits you will be enrolled in Part A and Part B automatically. However, if you haven’t applied for Social Security benefits, you must apply for Medicare on your own. It’s essential to apply for Original Medicare (Parts A and B) three months before turning 65, or you may incur a late enrollment penalty if you don’t sign up for Medicare Part B when you’re first eligible.

In case you or your spouse are employed and covered by an employer-provided health plan, you may be eligible for a Special Enrollment Period (SEP) once the covered employment ends.

If you are already receiving Social Security benefits, your Medicare Part B premiums will be automatically deducted from your monthly payments. But if you’re not getting benefits, you’ll receive bills from the Centers for Medicare and Medicaid Services (CMS).

However, most Medicare beneficiaries do not pay any premium for Part A as they worked and paid Medicare taxes.

How to Qualify for Part A Free Premium?

To be eligible for premium-free Part A Medicare coverage, you must have at least 40 quarters of work in a job that paid Social Security taxes or have a spouse who qualifies for premium-free Part A, or be eligible for Railroad Retirement benefits. If you do not meet these requirements, you will likely pay a monthly premium for Part A, which will depend on how many years you or your spouse worked at a job where you paid Social Security taxes in the U.S.

In 2023, the monthly Part A premium will be $0 for those who worked for 40 quarters or more or were federal employees on January 1, 1983, or state or local employees after March 31, 1986. Those who worked between 30 and 39 quarters will pay $278 per month, while those who worked less than 30 quarters will pay $506 per month.

How to Qualify Based on Your Spouse’s Social Security Benefits

If you have not worked for at least 40 calendar quarters while paying Social Security taxes in the U.S., but your spouse has, you may still qualify for premium-free Medicare Part A based on your spouse’s work history once you reach 65 years old. However, it’s important to note that if you become disabled before turning 65 and don’t have a sufficient work history, you cannot qualify for Social Security Disability (SSDI) based on your spouse’s work history.

To be eligible for premium-free Part A based on your spouse’s work history at 65, you must meet the following criteria:

  • You are currently married, your spouse is eligible for Social Security benefits (retirement or disability), and you have been married for at least one year before applying.
  • You are divorced, your former spouse is eligible for Social Security benefits (retirement or disability), you were married for at least ten years, and you are now single.
  • You are widowed, and you were married for at least nine months before your spouse passed away, and you are now single.

Can I Get Free Part B If I’m Receiving Social Security Benefits?

Most people don’t pay a monthly premium for Medicare Part A. However, if they have Medicare Part B and are receiving Social Security or Railroad Retirement Board benefits, their Medicare Part B premium is typically deducted from their monthly benefit payment. Those with Medicare Part B who aren’t yet receiving Social Security or Railroad Retirement Board benefits will receive a bill each month called “Notice of Medicare Premium Payment Due” (CMS-500) and need to make arrangements to pay it.

Currently, the monthly premium is 164.90$ for most Medicare beneficiaries. Some beneficiaries may pay extra because of IRMAA. If you have a higher income, you will pay more out-of-pocket based on your tax returns from two years prior.

What Are the Types of Social Security Benefits?

The Social Security program was created by the Social Security Act signed into law by President Franklin D. Roosevelt in 1935. Initially, it paid benefits only to workers aged 65 and older, but in the 1970s, the government allowed workers to claim benefits as early as 62 and instituted annual cost-of-living adjustments (COLAs) to keep pace with inflation. However, the program’s trust funds are expected to be depleted by 2034, after which it would be able to pay only 77% of benefits to retirees. The government has proposed solutions to ensure the program’s long-term sustainability, but no plans have been implemented yet. Today’s workers need to prioritize their personal retirement savings to cover most of their expenses independently in the future.

Social Security benefits come in three main types: retirement, disability, and survivor benefits. Retirement benefits are available to workers who are at least 62 years old and have earned at least 40 credits. The size of benefit checks is determined by average indexed monthly earnings (AIME) over the 35 highest-earning years and the age at which benefits are claimed.

Disability benefits are available to adults 18 years or older who are unable to work due to a physical or mental disability expected to last at least 12 months or result in death. 

Survivor benefits are available to surviving spouses or children of a deceased worker who meet certain age and dependency requirements. Eligibility for each benefit type is determined by different factors, such as earnings history, medical condition, and relationship to the deceased worker.

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