Q: Do I need to be on Social Security to get Medicare coverage?
A: Millions of seniors rely on Medicare for health benefits in retirement, and depend on Social Security as a key income source. But while the two programs are interrelated, participation in one doesn’t necessarily hinge on being signed up for the other.
Social Security eligibility
Seniors who are eligible for Social Security’s retirement benefits can claim them as early as age 62. Doing so, however, is often not advisable, since it means lowering your monthly benefits – potentially for life.
To collect the full monthly benefit your earnings record entitles you to, you must wait until full retirement age to sign up for Social Security. Depending on your year of birth, that age will fall out somewhere between 66 and 67. For each month you file for Social Security ahead of full retirement age, you’ll face a reduction in your monthly benefits that will likely remain in effect indefinitely, unless you manage to go through the motions of withdrawing your application soon after filing it.
Medicare eligibility for seniors begins at age 65 (though there are certain exceptions to this rule based on medical need). Your initial enrollment period for Medicare begins three months before the month of your 65th birthday, and ends three months after the month you turn 65.
If you miss your initial Medicare enrollment window, you can sign up during the general enrollment period of January 1 through March 31 of each year. But holding off too long could cost you. If you wait too long to sign up for Medicare Part B, you’ll face a 10 percent increase in your Part B premiums for every year-long period you were eligible to enroll but didn’t. There are also financial implications associated with waiting too long to sign up for a Part D drug plan.
That said, if you’re still working and have coverage under a group health plan during the seven-month period surrounding your 65th birthday, you’ll get a special enrollment period that begins when you separate from your employer or your group coverage ends. As such, you won’t have to worry about the aforementioned penalties provided you sign up during your special enrollment period.
Coordinating Social Security and Medicare
Since it’s possible to start collecting Social Security as early as age 62, it’s feasible that you might be receiving benefits when your initial Medicare enrollment period kicks in. If that’s the case, then you’ll generally be enrolled in Medicare automatically. Furthermore, once your Medicare coverage begins, you can pay your premiums directly out of your Social Security benefits rather than go through the motions of making separate payments.
If you’re not already on Medicare as your 65th birthday approaches, you can sign up for Social Security and Medicare simultaneously if you so desire. But if you don’t want to slash your Social Security benefits by filing ahead of full retirement age, then you can absolutely sign up for Medicare alone, and file for Social Security later on.
Does it pay to delay?
It often pays to delay Social Security past full retirement age, because in doing so, you get to accrue credits that boost your benefits by 8 percent a year up until age 70. Therefore, if you don’t need the income from those benefits right away, you could conceivably sign up for Medicare at 65 and then wait another five years before filing for Social Security.
There are also scenarios where it might pay to get on Social Security before enrolling in Medicare. If, for example, you’re still working and have access to a heavily or fully subsidized health plan through your job, you may not have a need for Medicare. On the other hand, you might want your Social Security benefits to supplement your income, pay for travel, or help put your grandkids through college.
Remember, health coverage under Medicare doesn’t necessarily come cheap. Between premiums, deductibles, and coinsurance, you might find that your out-of-pocket costs are substantially lower under a group health plan, in which case it pays to stick with it as long as you can.
Make your decisions independently
Collecting Social Security is by no means a prerequisite to getting Medicare. In fact, it’s often advisable to sign up for Medicare as soon as you’re eligible (assuming you don’t have other health coverage) but wait on Social Security to avoid a reduction in benefits, or boost them as much as possible.
The only downside to signing up for Medicare alone is having to make your premium payments directly, as opposed to having them deducted from your Social Security benefits, but it’s a small price to pay for the upside of a higher lifetime income stream.
Maurie Backman has been writing professionally for well over a decade, and her coverage area runs the gamut from healthcare to personal finance to career advice. Much of her writing these days revolves around retirement and its various components and challenges, including healthcare, Medicare, Social Security, and money management.