Your 401(k) is a valuable asset – an employer-provided retirement savings account designed to help you prepare for the time when you no longer work. Keeping that 401(k) and continuing to add to it is probably one of your financial priorities, so you might fear that you'll lose it by starting Medicare coverage. Fortunately, that’s not a problem. You can have both a 401(k) and Medicare.
Medicare Eligibility Standards
Medicare should not be confused with Medicaid. Medicare is federally supported health insurance, and recipients pay part of the cost through premiums. Medicaid is a social welfare program for those who cannot provide for their own health care and includes a means test to determine eligibility based on income and assets. Each state sets its own rules, but, in general, owning such assets as a 401(k) will disqualify you from getting Medicaid benefits. There is no means test for Medicare, and owning a 401(k) has no effect on your eligibility for this program. To be eligible for Medicare, you usually must be age 65. Younger people may qualify if they become disabled or require ongoing kidney dialysis treatments.
- Wall Street Journal: What Is a 401(k)?
- Medicare.gov: What Is Medicare?
- Medical News Today: What Is Medicare/Medicaid?
- IRS. "Topic No. 751 Social Security and Medicare Withholding Rates." Accessed July 17, 2020.
- Medicare.gov. "Medicare Costs at a Glance." Accessed July 17, 2020.
- Medicare.gov. "Get Started With Medicare." Accessed July 17, 2020.
- Medicare.gov. "Medicare Advantage Plans." Accessed July 17, 2020.
- Medicare.gov. "Drug Coverage (Part D)." Accessed July 17, 2020.
- AARP. "Medicare Eligibility: Do You Qualify?" Accessed July 17, 2020.
- Medicare.gov. "What's Medicare Supplement Insurance (Medigap)?" Accessed July 17, 2020.
- U.S. Department of Health and Human Services. "What Is the Difference Between Medicare and Medicaid?" Accessed July 17, 2020.
- Medicare.gov. "Medicare and Medicaid," Pages 3–4. Accessed July 17, 2020.
Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.