Medicare generally is not considered a “public benefits” program. Rather, it is a government-run and sponsored health care insurance program. We discuss it briefly here, however, because sometimes having both Medicaid and Medicare (MassHealth)—the latter of which is a public benefits program—offers some unique benefits that may be worth pursuing. Please note that we do not discuss in any detail the Medicare prescription drug benefit (Part D), the complexity of which goes beyond the scope of this website. You may find information about Part D at the Social Security Administration’s webpage for Part D. The Medicare programs that we focus upon here are Part A (hospital coverage) and Part B (outpatient services).
When Medicaid and Medicare Work Together
Medicare benefits are coupled with Medicaid (MassHealth) benefits in at least three specific health care programs in Massachusetts. One of these is the Program for All-inclusive Care for the Elderly, or “PACE,” which is discussed on our Home Care Benefits page. A person who seeks PACE benefits will need to meet the income and assets tests for MassHealth, even though Medicare is paying part of the cost.
Another overlapping benefit category is the “Qualified Medicare Benefit” program that MassHealth offers to low-income, disabled individuals. Under this program, MassHealth will pay the cost of Medicare premiums, if the individual meets the income standards for MassHealth. If the person is age 65 or older, he or she also will need to meet the MassHealth asset standards in order to receive the Qualified Medicare Benefit.
The third program combining MassHealth and Medicare financing is the Senior Care Options (SCO) program, which also is discussed on our Home Care Benefits page. As with the above programs, an individual seeking to enroll in a SCO plan will need to meet the asset standards for MassHealth in order to enroll. A Disability Trust will allow the person to qualify for MassHealth without first having to spend all savings and other assets in excess of $2,000.
Qualifying for Medicare
Qualifying for Medicare Part A is not means-tested at all, and Part B is only means-tested on the basis of annual income. Since assets are never considered under either of these programs, a person does not need a Disability Trust in order to receive Medicare Parts A or B. This is a very big difference between Medicare and Medicaid or SSI. Unlike the latter two programs, assets are irrelevant to Medicare coverage.
If you have enough work history to qualify for Medicare Part A—that is, employment that paid Medicare taxes on your behalf, and your earnings were enough to earn at least 40 “credits” (as of 2020, you get one credit for each $1,410 earned, up to a maximum of four credits per year) over the previous ten years—you normally will become eligible for Medicare at age 65, and you won’t pay any premium for it. You do, however, have to notify the Social Security Administration, which manages Medicare, that you want coverage to start. If you wait past age 65 to give notice, you may have to wait for an open-enrollment period in order to start coverage.
If you don’t have enough work history, but you have lived in the U.S. as a citizen or permanent resident for at least five years, you can buy Medicare Part A by paying a premium. If you buy Part A, however, you also must buy Part B, which costs an additional premium.
Unlike Social Security retirement income, there is no generally-available early-application option for Medicare. But there are some exceptions, such as qualifying for Social Security Disability Income (SSDI). Two years after qualifying for SSDI, Medicare Part A coverage begins automatically, and you become eligible to buy Part B.
Medicare Part B is optional coverage, available for a premium to those who qualify automatically (i.e., on the basis of work history) for Part A. Persons without enough work history also can buy Part B by paying the premium. You are not required to buy Part A if you buy Part B (but please note that the converse is not true—if you buy into Part A, you must buy Part B.)
Premiums
The Medicare Part A premium, for those without enough work history to qualify automatically, depends upon whether the person has some work history or not. Work history is measured in terms of “credits,” with one credit being granted for each $1,410 of earnings, up to a maximum of four credits per year of work during the ten years prior to the application date. Based on this system, premiums for 2020 were—
A person can choose to continue working after qualifying for Part A with a premium, and they will continue to earn credits for that work. When they reach 40 credits, the premium for Part A no longer will be charged. These rules can be quite detailed. The AARP website has good information that you can check out if you have more questions about qualifying to receive or purchase Medicare Part A coverage.
The amount of the premium for Part B is not affected by past work history, but it is affected by income. As of 2020, the monthly premiums for an individual were—
| WORK CREDITS | PREMIUM |
|---|---|
| Less | $458/month |
| 30 to 39 | $252/month |
| INCOME | PREMIUM |
|---|---|
| $87,000 or less | $144.60 |
| $87-$109,000 | $202.40 |
| $109-136,000 | $289.20 |
| $136-163,000 | $376.00 |
| $163-500,000 | $462.70 |
| Above $500,000 | $491.60 |
