The Social Security Administration is an American institution that helps older Americans, workers who have become disabled, and families in which a parent passes away early. This institution also maintains the Medicare program, which provides affordable health care coverage to senior citizens and people with qualifying disabilities.
If you are going to enroll in a Medicare plan or change your Medicare coverage soon, you may be interested in learning more about Social Security and Medicare. Here are the details.
What Is Social Security
The Social Security Administration issues retirement benefits and administers a number of public assistance programs. The most well-known Social Security program is the retirement benefits package that is given to workers who have paid into the program adequately. This Social Security program is effectively an insurance program that pays out to people who reach retirement age.
How Does Social Security Work
As of 2021, every $1,470 you earn counts for one credit, up to four credits. That amount goes into the Social Security trust funds. The money in those funds is used to pay Social Security benefits to people who are currently eligible for them. Any money paid into Social Security that is not spent remains within the fund.
The Social Security Administration also oversees the Medicare program, which provides senior citizens and disabled people with affordable health care coverage. To qualify for Medicare, you must submit an application through the Social Security Administration. There are different ways to qualify, but the most common eligibility requirement is that you must be 65 years old or older to apply.
You can also be eligible due to your disability, but in most cases you must collect Social Security disability benefits for at least 24 months before you can enroll in Medicare. If you are diagnosed with End-Stage Renal Disease or Amyotrophic Lateral Sclerosis, the wait time is much shorter. In fact, people with either disease are often eligible to enroll only a few months after their initial diagnosis.
Medicare is divided into four key parts. Each one represents a different component of the program. There is Part A hospital insurance, Part B medical insurance, Part C Medicare Advantage plans, and Part D prescription drug coverage. While Parts A and B are overseen directly by the Social Security Administration, Parts C and D involve private insurance companies.
If you have a Part C plan, you will effectively receive your Part A, Part B, and potentially Part D benefits through a single Medicare Advantage plan. These plans are not standardized, so it may be worthwhile to shop around to see what your options are. Many Medicare Advantage plans have desirable benefits that are not available with Original Medicare, so be sure to ask a local insurance agent to help you shop around.