Braille Monitor December 2007
(back) (contents) (next)
by James McCarthy
From the Editor: Jim McCarthy is a Government Programs Specialist for the National Federation of the Blind. Here is his annual Social Security summary:
Once again it is that out with the old, in with the new time of year. Along with the inevitable best-of lists and retrospectives, this regular passing of time brings with it annual adjustments to Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and Medicare programs. The changes include new tax rates, higher exempt earnings amounts, SSDI and SSI cost of living increases, as well as alterations to deductible and coinsurance requirements under Medicare. In 2007 upper-income Americans began facing larger Medicare Part B premiums than the majority of us. Below are the updated facts for 2008.
FICA and Self-Employment Tax Rates: The FICA tax rate for employees and their employers remains at 7.65 percent. This rate includes payments to the Old Age, Survivors, and Disability Insurance (OASDI) Trust Fund of 6.2 percent and an additional 1.45 percent payment to the Hospital Insurance (HI) Trust Fund, from which payments under Medicare are made. Self-employed persons continue to pay a Social Security tax of 15.3 percent, which includes 12.4 percent paid to the OASDI Trust Fund and 2.9 percent paid to the HI Trust Fund.
Ceiling on Earnings
Subject to Tax: During 2007 the ceiling on taxable earnings for contributions
to the OASDI Trust Fund was $97,500. For 2008 the maximum amount of taxable
earnings rises to $102,000. All earnings are taxed for the HI Trust Fund.
Social Security Disability Insurance
Quarters of Coverage: Eligibility for retirement, survivors, and disability insurance benefits is based in large part on the number of quarters of coverage earned by any individual during periods of work. Anyone may earn up to four quarters of coverage in a single year. During 2007 a Social Security quarter of coverage was credited for earnings of $1,000 in any calendar quarter. Anyone who earned $4,000 for 2007 (regardless of when the earnings occurred during the year) received four quarters of coverage. In 2008 a Social Security quarter of coverage will be credited for earnings of $1,050 during a calendar quarter. Four quarters can be earned with annual earnings of $4,200.
Trial Work Period Limit: The amount of earnings required to use a trial work month is subject to annual increases. In 2007 the amount was $640, and in 2008 it rises to $670. In cases of self-employment, a trial work month can also be used if a person works more than eighty hours; this hour limit remains the same each year unless expressly adjusted.
Exempt Earnings: The monthly earnings exemption referred to as Substantial Gainful Activity for blind people who receive disability insurance benefits was $1,500 of gross earned income during 2007. In 2008 earnings of $1,570 or more a month, before taxes, for a blind SSDI beneficiary, will indicate substantial gainful activity once any unearned (or subsidy) income is subtracted and all deductions for impairment-related work expenses are applied.
Benefit Amounts: All Social Security benefits are increased by a
cost of living adjustment (COLA) of 2.3 percent beginning with checks received
in January 2008. The precise increase will vary based upon the amount each
individual now receives.
Supplemental Security Income
Standard SSI Benefit Increase: Beginning January 2008, the federal payment amounts for SSI individuals and couples are as follows: individuals, $637 a month; couples, $956 a month. These amounts are increases over the 2007 level of $623 a month for individuals and $934 a month for couples.
Income Exclusion: The Student Earned Income Exclusion is adjusted
each year. In 2007 the monthly amount was $1,510, and the maximum yearly amount
was $6,100. For 2008 these amounts increase to $1,550 a month, and $6,240
a year. The SSI program applies strict asset (resource) limits, which Congress
alone can change, of $2,000 for individuals and $3,000 for couples.
Medicare Deductibles and Coinsurance: Medicare Part A coverage provides hospital insurance to most Social Security beneficiaries. The coinsurance payment is the charge that the hospital makes to a Medicare beneficiary for any hospital stay. Medicare then pays the hospital charges above the beneficiary's coinsurance amount.
The Part A coinsurance amount charged for hospital services within a benefit period of not longer than sixty days was $992 during 2007, with an increase to $1,024 in 2008. From the sixty-first day through the ninetieth day there is a daily coinsurance amount of $256 per day, up from $248 in 2007. Each Medicare beneficiary has sixty lifetime reserve days, which may be used after a ninety-day benefit period has ended. Once used after any benefit period, these reserve days are no longer available. The coinsurance amount to be paid during each reserve day used in 2008 is $512, up from $496 in 2007.
Part A of Medicare pays all covered charges for services in a skilled nursing facility for the first twenty days within a benefit period that follows a three-day in-hospital stay. From the twenty-first day through the one-hundredth day in a benefit period the Part A coinsurance amount for services received in a skilled nursing facility will be $128 a day, up from $124 a day in 2007.
Most beneficiaries have no monthly premium charge for Medicare Part A coverage. Those who become ineligible for Social Security Disability Insurance cash benefits can continue to receive Medicare Part A coverage without paying premiums for at least ninety-three months after the end of a trial work period. After that time the individual may purchase Part A coverage. The premium rate for this coverage during 2008 is $423 a month. This is reduced to $233 for individuals who have earned from thirty to thirty-nine quarters of Social-Security-covered employment.
In 2008 the Medicare Part B (medical insurance) deductible rises to $135. The amount for 2007 was $131. This is an annual deductible amount. The Medicare Part B monthly premium rate charged to each beneficiary for the year 2008 rises to $96.40 from the $93.50 amount for 2007. For those receiving Social Security Benefits, this premium payment is deducted from your monthly benefit checks, so while 2008 Social Security benefits are adjusted upward, a portion of the increase goes toward the higher Medicare Part B premiums, though the increase is more modest than those in many recent years. Individuals who remain eligible for Medicare, but are not receiving Social Security benefits because of working, must pay the Part B premium directly on a quarterly basis—one payment every three months. Like the Part A premiums mentioned above, Part B is also available for at least ninety-three months following the Trial Work Period assuming an individual wishes to have it and, when not receiving SSDI, continues to make quarterly premium payments.
Americans with higher incomes now pay higher Part B premium amounts based on their income. For singles the 2008 income threshold for higher premium amounts is income that exceeds $82,000, and for couples filing jointly the 2008 threshold is $164,000. It has been estimated that 4 percent of Americans are affected by these higher premium amounts mandated by the Medicare Modernization Act. If you believe you may be affected, you should contact the Centers for Medicare and Medicaid Services (CMS). (The contact information is given below.)
Programs That Help with Medicare Deductibles and Premiums: Low-income Medicare beneficiaries may qualify for help with payments. Assistance is available through two programs—QMB (Qualified Medicare Beneficiary program) and SLMB (Specified Low-Income Medicare Beneficiary program).
Under the QMB program states are required to pay the Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) premiums, deductibles, and coinsurance expenses for Medicare beneficiaries who meet the program's income and resource requirements. Under the SLMB program states pay only the full Medicare Part B monthly premium ($96.40 in 2008). Eligibility for the SLMB program may be retroactive for up to three calendar months.
Both programs are administered by the Centers for Medicare and Medicaid Services in conjunction with the states. In order to qualify, the income of an individual or couple must be less than the poverty guidelines currently in effect. The guidelines are revised annually and were last announced early in 2007. New guidelines will be issued next in February or March of 2008. The rules vary from state to state, but in general the following can be said:
A person may qualify for the QMB program if his or her income is less than $871 a month for an individual and $1,161 a month for a couple. These amounts apply for residents of forty-eight of the fifty states and the District of Columbia. In Alaska the income threshold used to define poverty is less than $1,085 a month for an individual and $1,447 a month for a couple. In Hawaii income must be less than $1,000 a month for an individual and $1,333 a month for a couple.
For the SLMB program, income cannot exceed $1,041 a month for an individual or $1,389 for a couple in forty-eight of the fifty states and the District of Columbia. In Alaska the income amount is $1,297 for an individual and $1,732 for couples. An individual in Hawaii qualifies if income is less than $1,195 a month; for couples the amount is $1,595.
Resources--such as bank accounts or stocks--may not exceed $4,000 for one person or $6,000 for a family of two. Resources generally are things you own. However, not everything is counted. The house you live in, for example, doesn't count, and generally one car also does not count.
If you qualify for assistance under the QMB program, you will not have to pay:
If you qualify for assistance under the SLMB program, you will be responsible for the payment of all of the items listed above except for the $96.40 monthly Part B premium.
If you think you qualify but you have not filed for Medicare Part A, contact Social Security to find out if you need to file an application. Further information about filing for Medicare is available from your local Social Security office or Social Security's toll?free number (800) 772-1213.
Remember, only your state can decide if you are eligible for help from the QMB or SLMB program. So, if you are elderly or disabled, have low income and very limited assets, and are a Medicare beneficiary, contact your state or local Medicaid office (referred to in some states as the Public Aid Office or the Public Assistance Office) to apply. For more information about either program, call the Centers for Medicare and Medicaid Services (CMS) on its toll-free telephone number (800) 633-4227 or go online to <http://www.cms.hhs.gov/ContactCMS>.