AARP raises red flag on Social Security, Medicare | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Americans approaching retirement face mounting uncertainty, with two pillars of support — Medicare and Social Security — at the center of concern.

Rising healthcare costs leave many wondering how they will afford essential care. What one pays for Medicare varies based on what coverage and services one gets and what providers one visits, the Centers for Medicare and Medicaid (CMS) explains.

At the same time, Social Security, once considered a reliable safety net, confronts funding shortfalls that threaten future benefits. The Old-Age and Survivors Insurance (OASI) trust fund is scheduled to provide benefits only until 2033.

“At that time, the fund’s reserves will become depleted and continuing program income will be sufficient to pay 77 percent of total scheduled benefits,” the Social Security Adminstration (SSA) reported.

For millions of older workers, these issues are not abstract policy debates but pressing realities shaping financial security and quality of life.

AARP weighs in with some important thoughts about how people can tackle these concerns — in particular, for those who are planning to retire early.

AARP says few early Social Security recipients qualify for Medicare

For Americans considering retiring at age 62, Medicare is rarely an option, as 65 is the age when Medicare enrollment is offered.

AARP acknowledges that these considerations are not always top of mind.

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“If you’re planning to retire at 62, you’re probably thinking more about bucket-list vacations or a loved one’s caregiving needs than your own health care,” Kimberly Lankford writes for AARP.

“When you retire, you not only say goodbye to a regular paycheck; many people also lose medical insurance that their employer helped pay for,” Lankford continues. “And if you file for Social Security, your benefits will be stuck at 70 percent of your full entitlement for the rest of your life.”

AARP explains Medicare eligibility for early retirees

Medicare covers roughly 70 million Americans but generally begins at age 65, unless someone qualifies earlier due to a disability, AARP explains.
Eligibility is individual; a younger spouse who depends on your insurance cannot enroll in Medicare until they meet the age or disability requirement themselves.
Retiring before 65 often creates a health insurance gap, since employer-sponsored coverage usually ends when you leave your job.
COBRA can help bridge this gap by allowing you to continue your workplace health plan temporarily, according to the U.S. Department of Labor.
Under federal law, employers with 20 or more workers must offer COBRA coverage to departing employees.
Some states extend similar protections to employees of smaller companies, ensuring continued access to health insurance for a limited period.

“Expect to pay the total premium for coverage, what you were paying and what your employer was paying, plus a 2% administrative fee,” AARP emphasizes. “Some companies pay as much as 80% of their workers’ insurance tab.”

AARP highlights how Medicare premiums are paid

Once one is eligible for Medicare, premiums become a factor, AARP notes.
When someone is already collecting Social Security, the cost of Medicare Part B is automatically taken out of their monthly benefit payment.
Those not yet receiving Social Security benefits are billed directly by the Centers for Medicare & Medicaid Services (CMS) for their Part B coverage.
Most people do not pay a monthly premium for Medicare Part A, since eligibility is earned by working and contributing the 1.45 percent Medicare payroll tax for at least ten years.
The standard monthly premium for Medicare Part B in 2026 is set at $202.90.
Premiums for Part B increase with income, beginning in 2025, for individuals earning more than $109,000 and married couples filing jointly with combined incomes above $218,000.

Medicare parts explained

Medicare is divided into four main parts, each covering different aspects of health care, according to medicare.gov.

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Part A (Hospital insurance)

Covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health services.
Usually premium-free if you or your spouse paid Medicare taxes for at least 10 years.

Part B (Medical Insurance)

Helps pay for doctor visits, outpatient care, preventive services, durable medical equipment, and some home health care.
Requires a monthly premium, which varies based on income.

Part C (Medicare Advantage)

Offered by private insurance companies approved by Medicare.
Combines Part A and Part B coverage, often includes prescription drug coverage, and may offer extra benefits like vision or dental.
Costs and coverage vary by plan

Part D (Prescription Drug Coverage)

Provides coverage for prescription medications, including many recommended vaccines.
Available through private plans that work with Medicare.
Requires a separate premium in most cases

Medigap (Supplemental Insurance)

Not an official “part” of Medicare, but private policies designed to cover out-of-pocket costs such as deductibles and coinsurance under Original Medicare (Parts A and B).
Standardized plans are labeled with letters (A through N)