|Social Security Medicare System facts and understanding plans help |
Do Medicare Advantage plans have deductibles?
Most Medicare Advantage plans have separate deductibles and hidden deductibles for medical care and prescription drugs. If your Medicare Advantage plan has a network, only in-network care may apply towards the deductible. There are Some Medicare Advantage plans have $0 medical deductibles, $0 prescription drug deductibles, and $0 premiums. Be very carefully if you are thinking of using a Medicare Advantage plan.
Government places you can plan.
Two main ways to get Medicare coverage:
A Medicare Advantage Plan
Original Medicare includes Part A (hospital insurance) and Part B (medical insurance). To help pay for things that aren’t covered by Medicare, you can opt to buy supplemental insurance known as Medigap (or Medicare Supplement Insurance).
These policies are offered by private insurers and cover things that Medicare doesn’t, such as copayments, deductibles, and healthcare when you travel abroad.
Medigap policies vary and the most comprehensive coverage offered was through Plan F, which covers all copays and deductibles. Unfortunately, as of January 1, 2020, Plan F and Plan C, the two plans that covered deductibles cannot be sold to new Medicare beneficiaries. However, if you were eligible for Medicare prior to that time but haven’t yet enrolled, you still may be able to get Plan F or Plan C.1
Be aware that with Original Medicare and Medigap plans, you will still need Part D prescription drug coverage. If you don’t buy it when you first become eligible for it—and are not covered by a drug plan through work or a spouse—you will be charged a lifetime penalty if you try to buy it later.
Medicare Advantage Plans A Medicare Advantage Plan is intended to be an all-in-one alternative to Original Medicare. These plans are offered by private insurance companies that contract with Medicare to provide Part A and Part B benefits, and sometimes Part D (prescriptions).
Most plans cover benefits that Original Medicare doesn’t offer, such as vision, hearing, and dental. You have to sign up for Medicare Part A and Part B before you can enroll in Medicare Advantage Plan.
The private insurers receive a fixed amount each month for Medicare Advantage plan care. In turn, these companies can charge out-of-pocket costs to policyholders and are able to establish their own rules for service such as the need for referrals or provider networks for both non-urgent care and emergency services.
$0 to $7,550.
You can use the above links to get real up to date Gov. information.
If you know about our security system the below will not help you.
But if you want to learn please read on.
Social Security is the term used for the Old Age, Survivors, and Disability Insurance (OASDI) program in the United States, run by the Social Security Administration (SSA), which is a federal agency. Though it is best known for retirement benefits, it also provides survivor benefits and income for workers who become disabled. The Social Security system in the U.S. came into existence on Aug. 14, 1935, when President Franklin D. Roosevelt signed the Social Security Act into law.
The first monthly benefits checks became payable on Jan. 1, 1940, and the first person to collect one was Ida M. Fuller, a retired legal secretary in Vermont. Her check was for $22.54.
The system and its rules have evolved in the decades since. Today, Social Security is one of the largest government programs in the world, paying out hundreds of billions of dollars each year. The Social Security Administration keeps track of your earnings throughout your working life. When you retire, the amount of your monthly Social Security benefit depends on your earnings and the age at which you retire. People who retire earlier typically receive lower benefit payments than they would if they postpone retirement.
How does Social Security work? Social Security is an insurance program. Workers pay into the program, typically through payroll withholding where they work. Self-employed workers pay Social Security taxes when they file their federal tax returns. How much Social Security income you’ll receive depends on: Your earnings over your lifetime The age at which you’ll begin receiving benefits Whether you’ll be eligible to receive a spouse’s benefit instead of your own Workers can earn up to four credits each year. In 2021, for every $1,470 earned, one credit is granted until $5,880, or four credits have been achieved. That money goes into two Social Security trust funds—the Old-Age and Survivors Insurance Trust Fund (OASI) for retirees and the Disability Insurance Trust Fund (DI) for disability beneficiaries—where it is used to pay benefits to people currently eligible for them. The money that is not spent remains in the trust funds. A board of trustees oversees the financial operation of the two Social Security trust funds. Four of the six members are the secretaries of the departments of Treasury, Labor, and Health and Human Services, and the Commissioner of Social Security, while the remaining two members are public representatives appointed by the president and confirmed by the Senate. Social Security benefits are calculated based on a person’s average indexed monthly earnings (AIME) during their 35 highest-earning years. Types of Social Security Benefits Social Security provides benefits to retirees, their survivors, and workers who become disabled. Retirement benefits: Social Security is part of the retirement plan for almost every American worker. It provides replacement income for qualified retirees and their families. The portion of your pre-retirement wages that Social Security replaces is based on your highest 35 years of earnings and varies depending on how much you earn and when you choose to start benefits.
When you work, you pay taxes to Social Security. We use the tax money to pay benefits to: People who have already retired. People who are disabled. Survivors of workers who have died. Dependents of beneficiaries. Workers who have paid into the Social Security system for at least 10 years become eligible for early retirement benefits at age 62. Waiting until your “full retirement age”—65 to 67 depending on when you were born results in higher monthly benefits. If you delay collecting retirement benefits to age 70, then you will receive even more, but benefits don’t increase if you wait longer. Spouses can also claim benefits based on either their own earnings record or their spouse’s. A divorced spouse who is not currently married can receive benefits based on an ex-spouse’s earnings record if the marriage lasted at least 10 years. Children of retirees can also receive benefits until they turn 18 (longer if the child is disabled or a student). The cutoff is 16 if you are caring for a child who is not your own. Here are three important things to know about age when thinking about when to start your benefits: Full Retirement Age The full retirement age is the age when you can start receiving your full retirement benefit amount. The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born in 1960 or later, full retirement benefits are payable at age 67. You can find your full retirement age by birth year in the full retirement age chart. Early Retirement Age You can get Social Security retirement benefits as early as age 62. However, we’ll reduce your benefit if you start receiving benefits before your full retirement age. Visit our website to learn how claiming retirement benefits early will affect your benefit amount. Delayed Retirement Age When you delay benefits beyond your full retirement age, the amount of your retirement benefit will continue to increase up until age 70. There is no incentive to delay claiming after age 70. Applying online for Retirement benefits is the easiest way to complete your application at a time that works for you, without a trip to the Social Security office. You can also apply by phone or at a Social Security office. This section will tell you about the different options.
The retirement benefits application process follows these general steps, whether you apply online, by phone, or in person: Gather the information and documents you need to apply. Complete and submit your application. We review your application and contact you if we need more information. We mail you a decision letter. You start receiving your retirement benefits. Social Security benefits are paid in the month following the month they are due. If you are due benefits for December, you will receive your first check in January or December. Ready To Start Medicare? If you’ll turn 65 within three months, you can use our online application to apply for Medicare and Social Security retirement benefits at the same time, or you can use it to apply for just Medicare. To learn more about your Medicare options, review our section on Medicare Benefits. Applying As a Spouse or Family Member You may be able to receive retirement benefits on your spouse’s or former spouse’s record. Likewise, your spouse or family member may be able to receive benefits on your record if they qualify. Learn more about Benefits for Your Family. Retirement Benefits for Survivors If you are the spouse, divorced spouse, family member, or parent of a worker who has died and you are planning to apply for retirement benefits, review our Survivors Benefits page to see how Social Security survivor benefits relate to your situation.
Disability benefits: People who can’t work due to a physical or mental disability that is expected to last for a year or more or result in death may be eligible for Social Security disability benefits. To qualify, you generally have to meet certain earnings tests. Family members of disabled workers can also be eligible. To be eligible for disability benefits, you must: Be unable to work because you have a medical condition that is expected to last at least one year or result in death. Not have a partial or short-term disability. Meet SSA’s definition of a disability. Be younger than your full retirement age. If you qualify for disability benefits, certain members of your family may be eligible to receive benefits based on your work record.
The SSDI program pays benefits to you and certain family members if you are “insured.” This means that you worked long enough – and recently enough – and paid Social Security taxes on your earnings.
The Supplemental Security Income (SSI) program pays benefits to adults and children with disabilities who have limited income and resources. While these two programs are different, the medical requirements are the same. If you meet the non-medical requirements, monthly benefits are paid if you have a medical condition expected to last at least one year or result in death. Survivors’ benefits: The spouse and children of a deceased worker may be eligible for survivor benefits based on the worker’s earnings record. That includes surviving spouses who are 60 or older, or 50 or older and disabled, provided they have not remarried. A surviving spouse who is caring for a child who is younger than 16 or is disabled may be eligible for these benefits too. For children to receive benefits, they must generally be younger than 18 or disabled.
Under certain circumstances, a stepchild, grandchild, step-grandchild, or adopted child may also qualify for benefits. Parents age 62 or older who were dependent upon a deceased worker for at least half of their income may also be able to collect benefits. In some circumstances, surviving spouses and minor children are also entitled to a one-time payment of $255 after an eligible worker’s death.
Medicare Benefits: Medicare is our country’s health insurance program for people aged 65 or older. Certain people younger than age 65 can qualify for Medicare too, including those with disabilities and those who have permanent kidney failure. The program helps with the cost of health care, but it does not cover all medical expenses or the cost of most long-term care. You have choices for how you get Medicare coverage. If you choose to have Original Medicare (Part A and Part B) coverage, you can buy a Medicare Supplement Insurance (Medigap) policy from a private insurance company. Social Security enrolls you in Original Medicare (Part A and Part B). Medicare Part A (hospital insurance) helps pay for inpatient care in a hospital or limited time at a skilled nursing facility (following a hospital stay). Part A also pays for some home health care and hospice care. Medicare Part B (medical insurance) helps pay for services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and some preventive services. Other parts of Medicare are run by private insurance companies that follow rules set by Medicare.
Supplemental (Medigap) policies help pay Medicare out-of-pocket copayments, coinsurance, and deductible expenses. Medicare Advantage Plan (previously known as Part C) includes all benefits and services covered under Part A and Part B — prescription drugs and additional benefits such as vision, hearing, and dental — bundled together in one plan.
Medicare Part D (Medicare prescription drug coverage) helps cover the cost of prescription drugs. Most people age 65 or older are eligible for free Medical hospital insurance (Part A) if they have worked and paid Medicare taxes long enough.
You can enroll in Medicare medical insurance (Part B) by paying a monthly premium. Some beneficiaries with higher incomes will pay a higher monthly Part B premium. If you are within three months of turning age 65 or older and not ready to start your monthly Social Security benefits yet, you can use an online retirement application to sign up just for Medicare and wait to apply for your retirement or spouse’s benefits later. It takes less than 10 minutes, and there are no forms to sign, and usually, no documentation is required.
Basic facts about Social Security: Social Security is more than just a retirement program. It also provides important life insurance and disability insurance protection. Over 65 million people, or more than 1 in every 6 U.S. residents, collected Social Security benefits in January 2022. While older adults make up about 4 in 5 beneficiaries, another one-fifth of beneficiaries received Social Security Disability Insurance (SSDI) or were young survivors of deceased workers. In addition to Social Security’s retirement benefits, workers earn life insurance and SSDI protection by making Social Security payroll tax contributions: About 96 percent of people aged 20-49 who worked in jobs covered by Social Security in 2020 have earned life insurance protection through Social Security.
For a young worker with average earnings, a spouse, and two children, that’s equivalent to a life insurance policy with a face value of nearly $800,000 in 2020, according to Social Security’s actuaries. About 89 percent of people aged 21-64 who worked in covered employment in 2020 are insured through Social Security in case of severe disability.
The risk of disability or premature death is greater than many people realize. Some 7 percent of recent entrants to the labor force will die before reaching the full retirement age, and many more will become disabled. Social Security provides a guaranteed, progressive benefit that keeps up with increases in the cost of living. Social Security benefits are based on the earnings on which people pay Social Security payroll taxes.
The higher their earnings (up to a maximum taxable amount, $147,000 in 2022), the higher their benefit. Social Security benefits are progressive: they represent a higher proportion of a worker’s previous earnings for workers at lower earnings levels. For example, benefits for a low earner (with 45 percent of the average wage) retiring at age 65 in 2021 replace about half of their prior earnings. But benefits for a high earner (with 160 percent of the average wage) replace about 30 percent of prior earnings, though they are larger in dollar terms than those for the low-wage worker.
Many employers have shifted from offering traditional defined-benefit pension plans, which guarantee a certain benefit level upon retirement, toward defined-contribution plans (such as 401(k)s), which pay a benefit based on a worker’s contributions and the rate of return they earn.
Social Security, therefore, will be most workers’ only source of guaranteed retirement income that is not subject to investment risk or financial market fluctuations. Once someone starts receiving Social Security, their benefits increase to keep pace with inflation, helping to ensure that people do not fall into poverty as they age. In contrast, most private pensions and annuities are not adjusted (or are only partly adjusted) for inflation.
Social Security provides a foundation of retirement protection for nearly all people in the U.S. Almost all workers participate in Social Security by making payroll tax contributions, and almost all older adults receive Social Security benefits. 97 percent of older adults (aged 60 to 89) either receive Social Security or will receive it, according to Social Security Administration estimates.
The near universality of Social Security brings many important advantages. It provides a foundation of retirement protection for people at all earning levels. It encourages private pensions and personal savings because it isn’t means-tested — it doesn’t reduce or deny benefits to people whose income or assets exceed a certain level.
Social Security provides a higher annual payout than private retirement annuities per dollar contributed because its risk pool is not limited to those who expect to live a long time, no funds leak out in lump-sum payments or bequests, and its administrative costs are much lower. Universal participation and the absence of means-testing make Social Security very efficient to administer.
Administrative costs amount to only 0.6 percent of annual benefits, far below the percentages for private retirement annuities. Means-testing Social Security would impose significant reporting and processing burdens on both recipients and administrators, undercutting many of those advantages while yielding little savings.
Finally, Social Security’s universal nature ensures its continued popular and political support. Large majorities of Americans say they don’t mind paying for Social Security because they value it for themselves, their families, and millions of others who rely on it. Social Security benefits are modest. Social Security benefits are much more modest than many people realize; the average Social Security retirement benefit in January 2022 was about $1,614 per month or about $19,370 per year. (The average disabled worker and aged widow received slightly less.) For someone who worked all of their adult life at average earnings and retires at age 65 in 2022, Social Security benefits replace about 37 percent of past earnings. Social Security’s “replacement rate” fell as the program’s full retirement age gradually rose from 65 in 2000 to 67 in 2022.
Most retirees enroll in Medicare’s Supplementary Medical Insurance (also known as Medicare Part B) and have Part B premiums deducted from their Social Security checks. As health care costs continue to outpace general inflation, those premiums will take a bigger bite out of their checks
Social Security benefits are also modest by international standards. The U.S. ranks just outside the bottom third of developed countries in the percentage of an average worker’s earnings replaced by the public pension system.
Children have an important stake in Social Security.
Social Security is important for children and their families as well as for older adults. Over 6.5 million children under age 18 lived in families who received income from Social Security in 2019. That number included nearly 2.8 million children who received their benefits as dependents of retired, disabled, or deceased workers, as well as others who lived with parents or relatives who received Social Security benefits.
Social Security lifted 1.1 million children above the poverty line in 2020, as the chart shows. (The figures in the chart use the comprehensive Supplemental Poverty Measure to show the full effect of non-cash benefits. These published figures do not correct for underreporting. By the more conventional, cash-only official poverty measure, Social Security lifted nearly 1 million children above the poverty line in 2020.)
Social Security lifts millions of older adults above the poverty line. Without Social Security benefits, about 4 in 10 adults aged 65 and older would have incomes below the poverty line, all else being equal, according to official estimates based on the 2021 Current Population Survey. Social Security benefits lift more than 16 million older adults above the poverty line, these estimates show.
An important study on retirement income from the U.S. Census Bureau that matches Census estimates to administrative data suggests that the official estimates overstate older people’s reliance on Social Security. The study finds that in 2012, 3 in 10 older adults would have been poor without Social Security and that the program lifted more than 10 million older adults above the poverty line. No matter how it is measured, it’s clear that Social Security lifts millions of older adults above the poverty line and dramatically reduces their poverty rate.
Older beneficiaries rely on Social Security for the majority of their income. Social Security provides the majority of income to most older adults. For about half of this group, it provides at least 50 percent of their income, and for about 1 in 4 older adults, it provides at least 90 percent of their income, according to multiple surveys and the Census Bureau study. Most retirees have modest incomes, save for some at the top of the income spectrum. Most low-income older Americans have very little pension income, if any, according to the U.S. Census Bureau study. Among retiree households in the bottom third of the income distribution, most received no pension income. About 1 in 4 of these households lived on less than $20,000 in 2015, and about half lived on $50,000 or less, according to a Social Security Administration study that also matches survey and administrative data.
Social Security is particularly important for people of color. Social Security is a particularly important source of income for groups with low earnings and less opportunity to save and earn pensions, including Black and Latino workers and their families, who face higher poverty rates during their working lives and in old age. The poverty rate among Black and Latino older adults is roughly 2.5 times as high as for white seniors. There is a significant racial retirement wealth gap, leading older adults of color to face more retirement insecurity than their white counterparts.
Black and Latino’s workers are less likely to be offered workplace retirement plans, and they are likelier to work in low-wage jobs with little margin for savings. Social Security helps reduce the economic disparities between older white adults and older adults of color.
Social Security’s importance to families of color goes beyond retirement. Black and Latino’s workers benefit substantially from Social Security because they have higher disability rates and lower lifetime earnings than white workers, on average, and Black workers have higher rates of premature death. Persistent racial disparities in health care access and quality — and in access to food, affordable housing, high-quality schools, and economic opportunity — mean Black workers are likelier to become disabled or die before retiring. Latino workers are also more likely to become disabled than white workers and have longer average life expectancies than white workers, which means they have more years to collect retirement benefits.
Social Security is especially beneficial for women. Social Security is especially important for women because they tend to earn less than men, take more time out of the paid workforce, live longer, accumulate fewer savings, and receive smaller pensions. Women represent more than half of Social Security beneficiaries in their 60s and 7 in 10 beneficiaries in their 90s. In addition, women make up 96 percent of Social Security survivor beneficiaries.
Relatively modest changes would place Social Security on sound financial footing. Since the mid-1980s, Social Security has collected more in taxes and other income each year than it pays out in benefits and has amassed combined trust funds of about $2.9 trillion, and the excess income is invested in interest-bearing Treasury securities.
But Social Security’s costs will grow in the coming years as baby boomers retire. The trustees estimate that, if policymakers took no further action, Social Security’s combined Old-Age and Survivors Insurance (OASI) and Disability Insurance trust funds would be exhausted in 2034.
After the trust fund reserves are depleted, even if policymakers took no further action, Social Security could still pay three-fourths of scheduled benefits, relying on Social Security taxes as they are collected. Alarmists who claim that Social Security won’t be around when today’s young workers retire either misunderstand or misrepresent the projections.
The long-term gap between Social Security’s projected income and promised benefits is estimated at 1.2 percent of gross domestic product over the next 75 years. Policymakers should address Social Security’s long-term shortfall primarily by increasing Social Security’s tax revenues. Social Security will require an increasing share of our nation’s resources in the coming decades as the population ages, and polls show a broad willingness to support it through higher tax contributions. Recent trends also justify boosting Social Security’s payroll tax revenue: Social Security’s tax base has eroded since policymakers last addressed solvency in 1983, largely due to increased inequality and the rising cost of non-taxed fringe benefits, such as health insurance.
The Future of Social Security
With the aging of the U.S. population, some observers have raised concerns about the viability of a system in which fewer active workers will be supporting greater numbers of retirees. In its 2021 report, the Social Security Board of Trustees forecasts that the retirement fund (OASI Trust Fund) reserves will become depleted in 2033 (versus 2034 per the 2020 report), due in part to the COVID-19 pandemic that led to reduced employment and earnings.
At that time, the continuing tax income will be enough to pay 76% of scheduled benefits going forward. The trustees forecast that the disability trust fund—the DI Trust Fund—will dry up in 2057 (versus the 2065 estimate in the 2020 report).
If that prediction holds, Congress will need to find ways to fill the gap, which might mean higher taxes on workers, lower benefits, higher age requirements for retirees, or some combination of these elements. It’s worth noting that the 2021 report assumes that the pandemic “will have no net effect on the individual long-range ultimate assumptions.” Trustees noted that they will monitor the situation and may update projections in future reports to account for material changes.