Understanding the Overlap: Social Security and Medicare Explained

If you’re nearing retirement age, you’re probably feeling excited about the transition, but might also feel apprehensive.

While these years afford more freedom to enjoy your interests, they also come with a potentially confusing shift to Medicare insurance from individual health insurance. You’ll also start to collect Social Security. So what, exactly, is the difference between the two programs?

What Social Security Covers

Social Security is not medical insurance. This is a government program you pay into throughout your working life so that you have access to a monthly retirement stipend and a few other benefits. Social Security may also provide disability benefits to you or family members in certain circumstances.

Unlike Medicare, you cannot choose from different types of Social Security plans; the benefits are standard for all retirees unless there are special circumstances (e.g., a disability). This makes Social Security a little more cut and dry, which is why it’s generally easier to navigate than Medicare.

What Medicare Covers

Conversely, Medicare takes the place of private insurance or Medicaid after you hit retirement age (between ages 65 to 67, depending on when you were born)—and it’s a bit more complicated. The Centers for Medicare and Medicaid Services provides funds for health services such as hospitalizations and doctors’ visits, as well as prescription drugs and long-term care.

However, there are four Medicare plans you can select, and each provides a different level of coverage.

Part A

Part A picks up the tab for inpatient medical services and long-term care, as well as hospice and home health care. This plan primarily covers hospitalizations of any duration. 

Part B

Part B is similar to your typical private insurance in that it covers mostly preventative care. If you need to pay a visit to the doctor or another outpatient provider, it’s likely Part B Medicare that will provide the coverage to do so.

Part C

Part C is also known as Medicare Advantage. It’s basic Medicare (Parts A and B), plus a complement of extra coverage that’s outsourced to a private insurance company. Under a Medicare Advantage Plan, you’ll have a few extra options when it comes to your supplemental coverage. Some will give you broader access to a variety of different providers, while others will offer extra perks like wellness programs.

Part D

This Medicare plan covers prescription drugs, an important component for anyone living with a chronic disease.

Can You Have Both?

Yes—and most people do. Since Social Security and Medicare provide different benefits, anyone of retirement age is eligible to tap into both of these programs. Some may be able to secure Medicare coverage before retirement if they’ve been using Social Security disability benefits for more than two years.

What About Private Insurance?

Some may opt to continue paying for private insurance even after retirement, since this may come with fewer restrictions in terms of where you access your medical care. However, keep in mind that even Medicare coverage can include some convenient components from private insurance if you opt for a Medicare Advantage plan.

How to Find the Ideal Coverage

Now that you know the basics of Social Security versus Medicare, you might be wondering which Medicare plan would be best for you. Sackett & Associates can help with that. Our insurance advocates are available to help you sift through the sometimes confusing world of Medicare and determine which level of coverage makes the most sense for you, and then help you to enroll.

If you want to learn more, send a message to Sackett & Associates or give them a call to determine the best next steps.