Social Security and Medicare form a financial basis on which millions of retirees depend on each month. But while they are related, the two programs are fundamentally different in nature. Social Security benefits are cash retirement and disability benefits that are paid each month to eligible retirees and disabled persons. The amount of the payments depend on several factors, such as how long the recipient worked, how much they earned and when they start collecting benefits. Disability benefits depend on the level of disability of the applicant and other medical factors. Social Security does not offer any type of insurance benefits except for Medicare. Medicare is a nationwide medical insurance program that covers various types of medical expenses and services. Part A covers hospital care up to certain limits while Part B covers doctor's visits and other similar services. Part D covers prescription drug coverage and other parts of Medicare cover other types of expenses. Medicare does not pay for all expenses, so many people opt to purchase Medicare supplemental insurance to help "fill in the gaps". But Medicare never pays out any type of cash benefit to anyone under any circumstances. Medicare Part B charges a monthly premium for most retirees. Many of them opt to have their Medicare premiums deducted from their Social Security benefits each month instead of paying for them out of pocket. Social Security can also be a taxable benefit, whereas all benefits that are paid out through Medicare are never taxed. Social Security vs Medicare
Social Security Benefits
Medicare
What Is the Difference Between Social Security and Medicare? FAQs
Social Security is a governmental program that provides retirement benefits, disability income, survivor’s benefits and supplemental security income for those who are eligible.
As a worker to be eligible for benefits you must be at least age 62 (or be disabled or blind), and you must have enough work credits to qualify for benefits.
Taxes on your social security benefits will be based upon your combined income for the year. Combined income is defined as: Adjusted gross income + non-taxable interest income + ½ of your Social Security benefits. Based on your combined income for the year, 50% or 85% of your Social Security benefit could be subject to taxation for the year.
Medicare is a publicly-available health insurance program, whereas Social Security is a governmental program that provides retirement benefits, disability income, survivor’s benefits and supplemental security income for those who are eligible.
Yes, you may be eligible to receive both Social Security and Medicare benefits if you are age 65 or over, or if you are under 65 but receiving disability benefits. However, some people may be eligible for Social Security retirement benefits before they qualify for Medicare.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.
