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Social Security & Medicare

Is something not adding up with your Social Security & Medicare taxes and finances? Our advisors take these complex calculations off your plate.  


Medicare and Social Security are both safety net programs created by the federal government. These programs provide for people who are no longer able to work due to retirement, disability, and other life circumstances. U.S taxpayers foster these programs through payroll taxes. Although the two programs are distinctly separate, they’re connected in various ways.


Social Security provides monthly payments to eligible parties, while Medicare offers health insurance. The qualifications for eligibility are the same for both programs. In fact, if an individual is qualified to get Social Security, they can automatically enroll in Medicare once eligible.

Social Security vs. Medicare

Even though the two programs are connected, they’re different from each other. Here’s a detailed guide on how different the two programs are from each other.


The Kelley Financial Group has years of experience in guiding businesses and individuals through complex financial matters.

What Is Medicare?

This health insurance program is provided by the federal government and is managed by the Centers for Medicare and Medicaid Services. The coverage is available for individuals that have reached 65 years or have a chronic disability. This is not an ordinary health insurance program; it comes in various parts.


  • Medicare Part A: It's hospital insurance and covers hospital stays, hospice care, and long-term hospital stays.

  • Medicare Part B: Refers to medical coverage that covers doctor's visits, medical supplies, and preventive care.


The two parts are usually known as original Medicare. However, an individual can get additional care with the following coverage:


  • Medicare Part C: Popularly known as Medicare Advantage, it covers all original Medicare coverage, with additional covers like optical and dental services.

  • Medicare Part D: This type covers prescription drugs.

Eligibility for Medicare

An individual is qualified to get Medicare benefits when they reach the age of 65 and over. Younger individuals may be eligible for these benefits if they have chronic conditions or are disabled. The coverage partially depends on how long a particular individual worked and paid taxes.


Essentially, if they’ve paid taxes for 10 years, they’ll not pay premiums for Medicare Part A. However, if they’ve been working and paying taxes for less than 10 years, they'll pay $499 monthly for Medicare Part A in 2022. Individuals with disabilities or chronic conditions are only eligible after being deemed fit to get disability benefits for 24 months.


Patients with kidney diseases can get disability benefits in the first month of treatment. However, it depends on the month the patient starts participating in the home dialysis training program.

What Is Social Security?

Social Security is also a type of benefit program from the federal government for the retired and individuals with disabilities and is managed by the Social Security Administration. Americans usually pay into Social Security while they’re working. Money is deducted from an individual’s income during every pay period.


Once the individual stops working due to disability, or they’ve reached retirement age, they’ll start receiving payment through monthly checks or bank deposits. The amount an individual will get depends on how much they’ve earned while working.

Eligibility of Social Security

Individuals are eligible for Social Security benefits if they’re 62 years and older and may have a chronic disability. The individual must have enough work credit, which they earn as they work and earn income. An eligible party may need a minimum of six work credits. Usually, a worker earns four work credits per year.


Additionally, for an individual to attain maximum benefits, the program requires an individual to have an average of one work credit annually from age 21 until they become 62 years old. Moreover, they can receive maximum benefits if they’re blind or have a chronic disability with a maximum work credit of 40. This applies to U.S citizens who are residing in the country.


The rules for eligibility for Social Security for people with disabilities will depend on how old they were when they became disabled. If the individual is younger, they’ll need fewer work credits to qualify for this program.

How Social Security and Medicare Work Together

Many Individuals can find themselves eligible for both programs at the same time. This group includes:


  • Individuals who have attained the age of 65 years and over and get social security retirement benefits.

  • People who have received SSDI for 24 months.

  • Individuals at the age of 65 and over who get supplemental Social Security Income benefits.

Can an Individual Automatically Get Medicare with Social Security?

An individual eligible for Medicare can also get Social Security and vice versa. A person aged 65 receiving Social Security is automatically enrolled in Medicare Part A and Part B. The benefits will start rolling on the first day of the 65th birthday. 


Moreover, if they’re not receiving Social Security benefits, the said individual will need to sign up for Medicare during their initial enrollment period.

Are Medicare Premiums Deducted from Social Security Payments?

If an individual is enrolled in Original Medicare and is getting Social Security, their premiums for Medicare Part B are automatically deducted from their Social Security payments. When one enrolls in Medicare before they start getting Social Security, they’ll have to pay premiums directly to Medicare.


They’ll start receiving Medicare bills monthly or after every three months. It will, however, depend on the plan a person is enrolled in. Individuals can pay their Medicare premiums online through their Medicare account, or instantly through Medicare easy pay, and through their bank account bill pay services.

How Does the Government Manage Medicare and Social Security Programs?

The Social Security Administration manages both aspects of these programs. It will handle an individual's eligibility for both Social Security benefits and original Medicare. The administration will also calculate penalties imposed for late enrollment for original Medicare.


On the other hand, the Centers for Medicare and Medicaid Services manages the enrollment of prescription drug plans and Medicare advantage. Moreover, the body can collect premiums for Medicare if they’re not deducted from Social Security payments.

The Kelley Financial Group Facilitates Medicare Plan Selections

The Kelley Financial Group team can guide and refer seniors to licensed Medicare professionals who search available plans for clients ensuring they pick a suitable one.


Moreover, these advisors can provide their clients' Medicare professionals with high-quality data and technology, which allows them to match the right plan with a particular senior. Therefore, seniors can reach out to the advisors of The Kelley Financial Group to support them when evaluating Medicare plans. 


This material is prepared for The Kelley Financial Group’s use. 


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. 


The Kelley Financial Group and LPL Financial do not offer tax or legal advice or services. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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