Federal and State Benefits for Aging and Older Adults
Older adults have access to a variety of government benefits, including Social Security, Medicare and Medicaid. Read on to learn more about these programs.
Learning how to live on a fixed income is one of the most significant challenges of retirement. Whether you're still working or making withdrawals from a 401(k) or IRA, you'll need to plan ahead to ensure you have enough funds to cover your living expenses.
Fortunately, government benefits are available to help you pay for health care and other basic necessities. Keep reading to learn about the government benefits available to older adults, what they cover and how you can apply for each program.
In 1965, President Lyndon B. Johnson signed H.R. 6675, making Medicare and Medicaid available to citizens of the United States.
Before Johnson signed the bill into law, many older adults lacked access to health care because it was prohibitively expensive. Older people typically use more health care services than younger people, which made private insurance companies hesitant to provide health coverage for seniors.
In the 1960s, medical costs rose significantly due to innovation, leaving many adults unable to pay for preventive care and other medical services even if they received Social Security benefits. The new law gave the federal government an important role in delivering health care, changing the lives of many older adults for the better.
Medicare coverage is typically available to adults who are 65 and older, younger people who have certain types of disability and people with kidney disease so severe that they need kidney dialysis or a kidney transplant.
Medicare Part A (hospital insurance) is available with no monthly premiums to adults who are at least 65 years old and have paid Medicare taxes for at least 10 years. You may also be eligible for premium-free Part A if you were a homemaker and your spouse worked and paid Medicare taxes for at least 10 years.
To receive Medicare Part A without paying a premium, you must meet one of the following criteria:
- You're receiving retirement benefits from Social Security.
- You're receiving retirement benefits from the Railroad Retirement Board.
- You qualify for retirement benefits offered by Social Security or the Railroad Retirement Board, but you haven't applied for them yet.
- You were a Medicare-covered government employee, or your spouse was a Medicare-covered government employee.
- You or your spouse worked and paid Medicare taxes for 40 quarters (10 years).
If you don't meet any of these requirements, you may be able to purchase Part A coverage from the federal government.
What Government Benefits Are Available Under Medicare Part A?
Medicare Part A is the part of Medicare that covers inpatient services, including hospitalization, hospice and care at a skilled-nursing facility.1 Medicare Part A may also cover home health care or care in a nursing home.2
Your Medicare Part A plan may cover inpatient hospitalization if you meet all of the following criteria:3
- You're admitted to a hospital on the order of a physician who believes you need inpatient care to treat your injury or illness properly.
- You're admitted to a hospital that accepts Medicare.
- If required, the hospital's utilization review board has approved your stay.
Medicare Part A typically provides coverage for skilled nursing under the following conditions, but you should always verify your benefits with Medicare before receiving any services.4
- You had a qualifying hospital stay.
- You have some days remaining in your benefit period for Part A.
- Your doctor has determined that you need skilled-nursing care to treat or manage your condition.
- The care you receive is provided by therapy staff or skilled-nursing staff.
- The skilled-nursing facility is certified by Medicare.
- You receive services for a condition that is considered "hospital-related" and was treated during your qualifying hospital stay, or you receive services for a condition that developed while you were in a skilled-nursing facility receiving care for a hospital-related condition.
Medicare Part A may cover the cost of a semi-private room, in-hospital meals, medications given to you while you're hospitalized, hospital supplies and general nursing care5.
It doesn't cover private-duty nursing, hygiene or personal-care items, telephone or television services if they're not included in the room fee. It also doesn't cover the costs of a private room unless your doctor has determined that a private room is medically necessary.6
In addition to meals and a semi-private room, Medicare Part A may cover the following if you have to stay in a skilled-nursing facility:7
- Physical or occupational therapy if it's necessary to meet your health goal
- Social services
- Medication administered in the facility
- Speech-language pathology services
- Medical equipment and supplies used during your stay
- Nutrition counseling
- Ambulance transportation if you can't get to the facility safely via another form of transport
What Isn't Covered Under Medicare Part A?
Although the government benefits offered under Medicare Part A are extensive, Medicare doesn't cover everything. The following services are excluded from Part A coverage:8
- Cosmetic surgery
- Long-term/custodial care
- Most routine dental services
- Hearing aids
- Exams to fit you for a hearing aid
- Routine foot care
- Eye exams that are performed for the purpose of prescribing eyeglasses
As noted above, you may not have to pay a premium for Medicare Part A coverage.
In 2020, you may have to pay a premium of up to $458 per month if you paid Medicare taxes for fewer than 30 quarters; if you paid Medicare taxes for 30-39 quarters, the premium is reduced to $252 per month.9
As of April 2020, the standard deductible for Medicare Part A was $1,408 per benefit period.10
A Medicare benefit period is not based on the fiscal year or calendar year. Instead, it's calculated based on your Part A usage. In this case, a benefit period starts on the day you're admitted to a hospital or skilled-nursing facility and ends when you haven't received any inpatient care for 60 consecutive days.11
For example, if you're admitted to the hospital on June 8, discharged on June 12, readmitted on September 4 and discharged again on September 6, your benefit period won't end until you've gone 60 days without receiving any inpatient care; in this example, your benefit would end in early November provided you weren't admitted again after September 6.
You have to pay a new deductible every time you start a new benefit period.12
Depending on how much time you spend as an inpatient, you may also have to pay coinsurance for the services you receive under Medicare Part A. As of April 2020, the requirements were as follows:
- No coinsurance for days one to 60 of each benefit period.13
- Coinsurance of $352 per day for days 61-90 of each benefit period.14
- Coinsurance of $704 per day for days 91 and beyond, which are considered "lifetime reserve days"15
- 100% coinsurance if you use up your lifetime reserve days; each Medicare beneficiary receives 60 lifetime reserve days to be used in their lifetime.16
What Benefits Are Available?
Medicare Part B is the medical insurance part of Medicare. It covers two service categories: preventive care and medically necessary services, which are defined as services or supplies that are medically necessary to treat a medical condition or make a diagnosis.17
Part B may cover durable medical equipment (DME) or services such as outpatient mental-health treatment, ambulance services and clinical research.18
The following preventive services may also be covered, although this list is by no means exhaustive:
- Screening for heart disease, cervical cancer, colorectal cancer, diabetes and depression
- Tests used to diagnose glaucoma
- Obesity counseling
- Annual wellness visits19
Everyone who has Part B coverage typically pays a premium. As of April 2020, the standard premium was $144.60 per month.20
The monthly premium is higher for Medicare beneficiaries with modified adjusted gross incomes (MAGI) above a certain threshold from two years prior. The maximum monthly premium is $491.60 per month for beneficiaries with MAGIs exceeding $500,000 for a single person or $750,000 for a couple.21
If you receive Social Security benefits, payments from the Office of Personnel Management or benefits from the Railroad Retirement Board, your Medicare Part B premium will be deducted from your monthly payment. If you don't receive any of these benefits, you'll receive a bill for your Part B premium.22
As of April 2020, the deductible for Medicare Part B was $198 for the year.23.
Once you meet your deductible, you'll usually have to pay 20% coinsurance on any doctor services, including services provided by doctors who care for you while you're hospitalized.24
Late Enrollment Penalties
The Medicare enrollment period begins three months before your 65th birthday and ends three months after you turn 65.25 If you don't enroll during this period, you'll pay a late enrollment penalty when you do sign up for Part B coverage. The penalty is an increase of 10% of the premium for each 12-month period you go without coverage.26 This means that the longer you go without Part B coverage, the more the penalty will be. For example, if you go 36 months without coverage (three 12-month periods), you'll pay a penalty of 30% of the premium each month when you sign up. The penalty lasts as long as you have Part B coverage, so it's important to enroll when you become eligible27. Enrolling late could cost you thousands of dollars in your lifetime.
Most Medicare beneficiaries have the option of enrolling in Part C, also known as a Medicare Advantage plan. These plans are offered by Medicare-approved private insurance companies.
If you choose to enroll in a Medicare Advantage plan, the plan will cover the preventive services, doctor services and inpatient services that would normally be covered by Original Medicare (Part A and Part B).28 Some plans also cover vision care, dental care and other services not covered by the Original Medicare plan.29
Types of Plans
Your Medicare Advantage plan may be classified as an HMO, PPO, special-needs plan or private fee-for-service plan.30 There are other types of Medicare Advantage plans, but these types are the most common.
HMO stands for health-maintenance organization. With this type of plan, you're usually required to receive services from an in-network provider.31 Exceptions include emergency care, urgent care when you're out of your home area and dialysis received outside your home area.32 If you select an HMO plan, you'll most likely have to choose a primary care provider to coordinate your medical care, and you'll probably need a referral to see a specialist.33
Preferred-provider organizations are a little more flexible than HMOs. You'll pay less to see in-network service providers, but you're allowed to choose out-of-network providers if you're willing to pay more.34 One of the key differences between an HMO and a PPO is that you don't have to choose a primary care doctor if you have a PPO plan.35 You may also be able to see a specialist without getting a referral from a primary care provider. 36
Special-needs plans are designed for enrollees who have specific diseases or medical characteristics. Another type of SNP, called a D-SNP, is available for beneficiaries who are eligible for both Medicare and Medicaid.
Benefits and covered providers are selected based on the unique needs of group members.37
You may be eligible for an SNP if you meet the following requirements:
- You're covered by Medicare Part A and Medicare Part B.
- You meet specific eligibility requirements for the plan; for example, if you want to be covered by a plan for people with autoimmune disorders, you must have an autoimmune disorder.38
- You live in the service area covered by the plan.
If you belong to an SNP, you're usually required to receive services from providers in the Medicare SNP network, with the exception of urgent care, emergency care or kidney dialysis received away from your home area.39
Private Fee-for-Service Plans
When you have a PFSS plan, the plan determines how much to pay health care providers.40 Your costs are also determined by the plan. Although not all providers are willing to accept patients with PFSS plans, many will. You can go to any provider who accepts the plan and has been approved by Medicare. You don't need to choose a primary care provider or get a referral to see a specialist with a PFSS plan.41
Medicare Advantage costs vary based on the provider and the coverage provided. Visit Medicare.gov to compare plans.42
Medicare Part D may cover the cost of some of your prescription medications. Each plan has a formulary, or a list of covered drugs, that you can consult to determine if your specific medication and dosage are covered.43 In some cases, a medication you take may not be on the formulary. If this happens, talk to your doctor about whether one of the covered medications would work just as well; if so, you may be able to switch medications and have some of your costs covered by your Medicare Part D plan.44
The cost of a Medicare prescription drug plan varies based on the plan you select. Visit Medicare.gov to compare coverage details and monthly costs for several plans.45
The Medicare "Donut Hole"
With Medicare Part D, you may experience a temporary coverage gap once your prescription costs exceed an initial coverage limit. This coverage gap is known as the "donut hole." For 2020, the federal government set the initial coverage limit at $4,020.46 This means that once you reach $4,020 in covered drug expenses for the year, you'll have to pay more for your medications until the donut hole closes.47
If you enter the donut hole, you'll pay up to 25% of the cost of your brand-name prescriptions; however, Medicare will apply most of the full price of the drug toward your out-of-pocket costs, which will help you get out of the coverage gap faster.48
You'll also pay 25% of the cost of generic drugs, but Medicare will only apply what you pay toward your out-of-pocket costs.49 Your annual deductible, copayments and coinsurance also count toward the out-of-pocket costs used to determine when the coverage gap will close; however, your premiums, pharmacy dispensing fees and whatever you pay for drugs that aren't covered by your Medicare Part D plan aren't included.50
Medigap, also known as Medicare Supplement Insurance, helps with some medical expenses not covered by Original Medicare. To qualify for a supplement, you must have Medicare Part A and Part B; if you're enrolled in a Medicare Advantage plan, you can't purchase a supplemental plan.51
This type of insurance may cover Part A deductibles, coinsurance and co-payments, but it doesn't cover private nursing, long-term care, dental care, eyeglasses, vision care, dental care or hearing aids.52 2 Medigap plans (Medigap Plan F and Plan C) cover the Part B deductible, but as of January 1, 2020, these plans won't be available to new Medicare beneficiaries.53
The cost of a Medigap plan depends on several factors, including the provider and the level of coverage you receive. Medicare.gov offers an online tool for finding a plan that meets your needs.
If you need help appealing a denied Medicare claim, contact the Medicare Rights Center, a nonprofit organization that helps older adults access health care services, at (800) 333-4114.54 Someone from the MRC may be able to explain the appeals process over the phone or even represent you during the appeals process.
Your State Health Insurance Assistance Program is also a valuable resource. SHIPs receive federal funding to help people with Medicare understand the coverage options available to them.55
Social Security helps older adults by providing a source of income during retirement. Your monthly payment is calculated based on your pre-retirement earnings, with older adults receiving larger payments if they delay their retirement until they've reached full retirement age.56
As of 2020, people born after 1960 reach full retirement age when they turn 67.57
Your eligibility for Social Security retirement payments is usually based on the number of work credits you earn in your lifetime. Work credits are assigned based on how much you earn each year, whether you earn wages from an employer or self-employment income from working as an independent contractor or operating your own business.58
For most Americans, a minimum of 40 work credits is required to be eligible for Social Security retirement benefits.59 If you didn't work, you may be able to qualify for Social Security based on your spouse's work history.60
Your monthly payment amount is based on how much you earned when you were working. If you didn't work, your payment amount is determined based on your spouse's work history. The Social Security Administration offers an online calculator to help you estimate how much you can expect to receive in retirement benefits.61
How to Collect Social Security
You can apply for Social Security government benefits using one of the following methods:
- Use the online Retirement/Medicare Benefit Application.62
- Apply via telephone at (800) 772-1213 or (800) 325-0778 (TTY).
- Visit a U.S. Social Security office.63
- If you're living overseas, contact the Federal Benefits Unit in your current location.64
Supplemental Security Income
Supplemental Security Income (SSI) is available to older adults and people with blindness or other disabilities. The SSI program is designed to provide supplemental income to help pay for food, shelter and other basic necessities.65
You may be eligible for SSI or Social Security disability (SSDI) if you're at least 65 years old, disabled or blind and you meet the following criteria:66
- You have limited income/resources.
- You reside in one of the 48 continental states, Alaska, Hawaii, District of Columbia or the Northern Mariana Islands.
- You're a U.S. citizen, U.S. national or qualified non-citizen.
- You're not in prison or another institution at the government's expense.
- You're not absent from the United States for 30 consecutive days or more (or one full calendar month).
The Social Security Administration offers an eligibility screening tool to help determine if you qualify for SSI benefits.67
Unlike Social Security retirement benefits, SSI benefits aren't based on work credits. The federal government sets a monthly payment amount each year based on the cost of living.
For 2020, the maximum monthly payment amount for an individual was set at $783; the maximum amount for eligible couples is $1,175 per month.68
If you receive SSI, your monthly payment amount may be reduced by any countable income you earn. Income refers to cash, donations of food and shelter or services that can be used to obtain food and shelter.69
How to Collect SSI
You can apply for SSI using one of the following methods:
- Apply online at the Social Security Disability Benefits website.70
- Apply via telephone at (800) 772-1213 or (800) 325-0778 (TTY).
- Visit your local Social Security office.
Medicaid provides health coverage to older adults who meet the income guidelines.71 Although it's jointly funded by state governments and the federal government, the Medicaid program is administered by state governments.72
Your eligibility for Medicaid may be determined in one of two ways:73
- If you're under the age of 65, your eligibility is determined based on your modified gross adjusted income.
- If you're 65 or older, your eligibility is determined using an income methodology developed by the Social Security Administration.
Because states administer their own Medicaid programs, the benefits offered via this program may vary from one state to the next; however, the federal government requires all Medicaid programs to cover the following:74
- Physician services
- Inpatient hospital services
- Outpatient hospital services
- Home health services
- Laboratory tests
It's up to your state to determine if optional benefits — such as physical therapy or prescription medications — are covered.
Applying for Medicaid Government Benefits
To apply for Medicaid, you must go through the agency responsible for administering your state's program. Medicaid.gov provides a list of state contacts.75
VA Government Benefits and Support
If you served in the military, you may qualify for a variety of VA government benefits, including health care, life insurance and home loans with favorable terms. Eligibility is typically determined based on your service record.
Veterans who complete at least 24 months of continuous service may be eligible for health care provided by the Department of Veterans Affairs.76 You may also qualify if you served on active duty and completed the entire duty assignment, or if you were discharged early due to a service-connected disability.77
VA government benefits may cover the following medical services:78
- Inpatient hospital care
- Preventive care
- Treatment for mental-health conditions
- Management of chronic health issues
- Prosthetic fittings
- Physical therapy
How quickly you receive care from the VA depends on your priority group. The VA uses priority groups to prioritize the delivery of care, which ensures that veterans with the most serious illnesses and injuries are treated first.
Priority group assignments are made based on factors such as your disability rating and service history. For example, if you received a Purple Heart or the Medal of Honor, you'll be assigned to one of the first three priority groups.79
As a veteran, you may qualify for the Servicemembers' Group Life Insurance plan, which provides financial benefits to your family upon your death.80
The VA also has a mortgage protection program, which will pay off your home loan if you pass away before the mortgage has been satisfied. To qualify for the mortgage protection program, you must be a disabled veteran who qualified for a VA grant for adapted housing.81
Home Loans and Grants
The VA home loan program is available to veterans who were honorably discharged from the military. Under the terms of this program, you may qualify for a loan with no down payment or no additional mortgage insurance payments.82
If you apply for a mortgage with a private lender, the VA may be able to guarantee a portion of the loan. Loan guarantees may also be available to veterans who need to repair or modify their homes.83
If you have a severe disability, you may qualify for a grant to adapt your current home or obtain accessible housing.84
The Program for All-Inclusive Care of the Elderly (PACE) supports older adults enrolled in Medicare and Medicaid. Under this program, health care professionals coordinate your care, ensuring you receive services that are appropriate for someone with your health profile.85
Receiving PACE services may also help you stay in your home or community instead of having to enter a nursing home.
You may qualify for PACE if you meet the following requirements:86
- You're at least 55 years old.
- You're eligible for care provided by a nursing home.
- You can live safely in the community if you have the right support.
- You live in an area serviced by a PACE organization.
If you qualify for PACE, you may receive care from PACE doctors; however, care is sometimes provided by medical professionals who have been contracted by PACE to care for older adults enrolled in the program.87
PACE may cover the following services:88
- Emergency care
- Dental care
- Adult day care
- Laboratory tests
- Physical or occupational therapy
- Preventive care
- Prescription drugs
Medicare.gov has an online tool to help you find a PACE plan in your area.89
Temporary Assistance for Needy Families
The TANF program offers government benefits to individuals who need temporary assistance and meet specific eligibility requirements. To qualify, you must be responsible for the care of a child who is under the age of 19.90
If you care for a grandchild or recently adopted a child, you may meet this criteria. You must also meet the following requirements:91
- U.S. citizen, permanent resident or eligible non-citizen
- Low or very low income
- Unemployed, under-employed or soon-to-be unemployed
TANF programs are administered by individual states and funded by the federal government in the form of block grants. Therefore, the assistance you receive depends on where you live. Visit the U.S. Department of Health and Human Services website to search for the TANF program in your state.92
If you're unemployed, check with your state unemployment agency to determine if you qualify for benefits. Unemployment benefits can help bridge the gap between when your TANF assistance ends and you start receiving Social Security or another form of income.
Supplemental Nutrition Assistance Program
The SNAP program, sometimes referred to as "food stamps" or "welfare," provides government benefits to help people pay for food. You must meet certain eligibility requirements regarding your income and financial resources to qualify for the SNAP program.
If you're 60 or older, the monthly net income maximum for 2020 is $1,041; if you live alone and there's another person in your household, it's $1,410.93 The monthly maximum increases based on household size, ranging from $1,778 per month for a household with three individuals to $3,620 per month for a household with eight people.94
Visit the USDA Food and Nutrition Service website to find the SNAP program for your state.95
Area Agencies on Aging
Area Agencies on Aging are nonprofit agencies that help older adults remain in their homes for as long as possible.96 Each agency services a specific region that may include a large city, one county or several counties.
Many seniors find these agencies helpful because they help coordinate services at the local level, ensuring that older adults have healthy meals, access to medical care and other necessities.
Services vary by agency, but you may be able to get assistance with the following:
- Referrals to insurance professionals
- Legal services at reduced rates
- Information on local transportation options
- Referrals to companies that offer personal care