In certain situations, both Medicare and Social Security provide funds to the estate of a deceased. Since Medicare provides health and hospitalization insurance to individuals over age 65, any funds paid out after an enrolled person's death cover a portion of final medical expenses. By contrast, Social Security issues a fixed cash payment to a qualified spouse or dependent child.
Medical Bill Payments
If your loved one passes away with unpaid medical expenses, Medicare steps in to help pay the health care costs under the terms of the insurance plan. Medicare pays 80 percent of the costs for approved care while the recipient's estate picks up the 20 percent patient co-payment. For example, Medicare would pay $8,000 of final medical bills for a recipient with $10,000 in total approved costs. The estate must pay the remaining $2,000.
Reimbursement for Cash Payments for Medical Services
Medicare offers reimbursement, up to the 80 percent limit, for covered health services received by a person enrolled in Medicare and paid for in cash. If the individual dies with non-reimbursed expenses, the estate may file a claim to receive the funds. Likewise, a child or spouse who paid for expenses out-of-pocket can file a claim separate from the estate's claim.
Lump-sum Cash Payment
Excluding the disabled, Medicare enrollees qualify for Social Security’s lump-sum death benefit based on the accumulated working record – ten years of covered employment -- that determines eligibility for both Social Security and Medicare. The one-time death benefit provides $255 to an eligible family member, such as a surviving spouse or dependent child, as of May 2013. If your deceased spouse or parent was too young for Medicare enrollment, the Social Security death benefit may still be claimed as long as a satisfactory working record was accumulated.
Claiming death benefits from Social Security and reimbursements from Medicare require identifying information for both the claimant and the original beneficiary of the services. This information includes your name and social security number and the name, social security number, date of birth, date of death, place of death and gender of the deceased. You must also answer select questions about the deceased's Social Security benefits and marriage history, when applicable. Be prepared to present a death certificate, tax filing records for the most recent year and any military discharge papers belonging to the deceased.
- AAFP: Medicare Participation Options for Physicians
- Medicare.gov: Which Insurance Pays First
- IMortuary: What To Do When Someone Dies: Social Security and Other Government Organizations
- Social Security Administration: Survivors Planner: How You Apply For Survivors Benefits
- Social Security Administration: Lump-sum Death Payment
- 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.
Ashley Mott has 12 years of small business management experience and a BSBA in accounting from Columbia. She is a full-time government and public safety reporter for Gannett.