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Unemployment & Medicare

The U.S. federal government---along with state governments---administer funding for Medicare, Social Security and unemployment compensation programs. Medicare health insurance provides health care coverage for people who've reached retirement age and for disabled individuals who receive Social Security disability benefits. As different eligibility criteria apply for both groups, the effects of unemployment benefits on a person's Medicare coverage can vary according to individual circumstances.

  1. Unemployment Benefits

    • The funding for Medicare, Social Security disability, Social Security retirement and unemployment benefits comes, in part, from employee payroll deduction or taxes drawn during a person's time in the workforce. In effect, any benefit entitlements a person receives come from contributions made in the workforce. State governments handle the administration of unemployment benefits, though the federal government does provide certain tax incentives when states follow federal guidelines. State regulations determine the types of circumstances that qualify a person for unemployment benefits. States also determine weekly benefit amounts and set the maximum number of weeks for benefit payouts. In the case of retirees, someone who already draws a monthly cash benefit through the retirement program may receive a reduced amount in unemployment benefits depending on state guidelines.

    Medicare Age Requirements

    • People who've reached 65 automatically qualify for Medicare. A person's work status has no bearing on eligibility for Medicare benefits, so someone who gets laid off from a job can draw unemployment benefits and still keep his Medicare coverage. As Medicare coverage requires a monthly premium payment for Part B benefits, Medicare recipients must continue to pay the monthly premium to maintain Part B coverage.

    Medicare Disability Requirements

    • Medicare disability requirements hinge on whether a person qualifies for Social Security disability benefits, or SSDI. Someone who qualifies for SSDI has proven that a disabling condition prevents her from maintaining gainful employment; so drawing unemployment benefits shouldn't be an issue in most cases. The Social Security Administration does permit SSDI recipients to work up to 20 hours a week and still maintain their eligibility status, according to Senior Corps, a retirement reference site. In effect, as long as a person maintains her SSDI eligibility, her Medicare coverage remains unaffected.

    Substantial Gainful Activity

    • Under Social Security guidelines, substantial gainful activity has to do with the amount of money a person can earn on a monthly basis. As of 2011, the Social Security Administration limits earnings for SSDI recipients to less than $1,000, so anyone earning below this amount remains eligible for SSDI benefits, according to Social Security Online. These guidelines apply for monthly gross income amounts. Someone who loses his job and qualifies for unemployment benefits can still remain eligible for SSDI benefits provided his income earnings meet these guideline requirements. As long as a person's SSDI eligibility remains intact, Medicare benefits will continue.

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