by James McCarthy
This article appeared in the Braille Monitor, December 2003 Edition, published by the National Federation of the Blind.
From the Monitor editor: Jim McCarthy is assistant director of governmental affairs for the National Federation of the Blind. Here is his annual Social Security summary:
With another new year come annual adjustments in Social Security programs. The changes include new tax rates, higher exempt earnings amounts, Social Security and SSI cost-of-living increases, and changes in deductible and co-insurance requirements under Medicare. Here are the new facts for 2004:
FICA and Self-Employment Tax Rates: The FICA tax rate for employees and their employers remains at 7.65%. This rate includes payments to the Old Age, Survivors, and Disability Insurance (OASDI) Trust Fund of 6.2% and an additional 1.45% payment to the Hospital Insurance (HI) Trust Fund, from which payments under Medicare are made. Self-employed people continue to pay a Social Security tax of 15.3%, which includes 12.4% paid to the OASDI Trust Fund and 2.9% paid to the HI Trust Fund.
Ceiling on Earnings Subject to Tax: During 2003 the ceiling on taxable earnings for contributions to the OASDI Trust Fund was $87,000. This ceiling rises to $87,900 for 2004. All earnings are taxed for the HI Trust Fund.
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 during a single year. During 2003 a Social Security quarter of coverage was credited for earnings of $890 in any calendar quarter. Anyone who earned $3,560 for the year (regardless of when the earnings occurred during the year) was given four quarters of coverage. In 2004 a Social Security quarter of coverage will be credited for earnings of $900 during a calendar quarter. Four quarters can be earned with annual earnings of $3,600.
Trial Work Period Limit: Beginning in 2001, the SSA established a rule that changes the amount of earnings required to use a trial work month. This change is announced with the cost-of-living adjustments each year. In 2003 the amount was $570, and in 2004 it rises to $580. In cases of self-employment, a trial work month can also be used if a person works more than 80 hours, and this limit remains the same each year.
Exempt Earnings: The monthly earnings exemption for blind people who receive disability insurance benefits was $1,330 of gross earned income during 2003. In 2004 earnings of $1,350 or more per month, before taxes, for a blind SSDI beneficiary will show substantial gainful activity after subtracting any unearned (or subsidy) income and applying any deductions for impairment-related work expenses.
Social Security Benefit Amounts: All Social Security benefits are increased by 2.1% beginning with the checks received in January 2004. The exact dollar increase for any individual will depend upon the amount being paid.
Standard SSI Benefit Increase: Beginning January 2004, the federal payment amounts for SSI individuals and couples are as follows: individuals, $564 per month; couples, $846 per month. These amounts are increased from individuals, $552 per month, and couples, $829 per month.
Student Earned Income Exclusion: the Student Earned Income Exclusion is adjusted each year. Last year the monthly amount was $1,340, and the maximum yearly amount was $5,410. In 2004 these amounts increase to $1,370 per month and $5,520 per year.
Medicare Deductibles and Co-insurance: Medicare Part A coverage provides hospital insurance to most Social Security beneficiaries. The co-insurance payment is the charge the hospital makes to a Medicare beneficiary for any hospital stay. Medicare then pays the hospital charges above the beneficiary's co-insurance amount.
The Part A co-insurance amount charged for hospital services within a benefit period of not longer than 60 days was $840 during 2003 and is increased to $876 during 2004. From the sixty-first day through the ninetieth day there is a daily co-insurance amount of $219 per day, up from $210 in 2003. Each Medicare beneficiary has 60 lifetime reserve days, which may be used after a 90-day benefit period has ended. Once used, after any benefit period, these reserve days are no longer available. The co-insurance amount to be paid during each reserve day used in 2004 is $438, up from $420 in 2003.
Part A of Medicare pays all covered charges for services in a skilled nursing facility for the first 20 days within a benefit period. From the twenty-first day through the one-hundredth day in a benefit period, the Part A co-insurance amount for services received in a skilled nursing facility is $109.50 per day, up from $105 per day in 2003.
For most beneficiaries there is 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 premium-free for 93 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 2004 is $343 per month. This is reduced to $189 for individuals who have earned at least 30 quarters of coverage under Social Security covered employment.
The Medicare Part B (medical insurance) deductible remains at $100 in 2004. This is an annual deductible amount. The Medicare Part B basic monthly premium rate charged to each beneficiary for the year 2004 is $66.60. (The 2003 premium rate was $58.) This premium payment is deducted from Social Security benefit checks. Individuals who remain eligible for Medicare, but are not receiving Social Security benefits because of working, pay this premium directly.
Programs Which 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 ($66.60 in 2004). 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 (CMS) 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 in February of 2003. New guidelines will be issued in February or March of 2004. 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 $769 per month for an individual and $1,030 per month for a couple. These amounts apply for residents of 48 of the 50 states and the District of Columbia. In Alaska, the income threshold used to define poverty is less than $955 per month for an individual and $1,282 per month for couples. In Hawaii, income must be less than $881 per month for an individual and $1,182 per month for couples.
For the SLMB program the income of an individual cannot exceed $918 per month or $1,232 for a couple in 48 of the 50 states and the District of Columbia. In Alaska, the income amount is $1,141 for an individual and $1,534 for couples. An individual in Hawaii qualifies if his or her income is less than $1,053 per month; for couples the amount is $1,414.
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 in some circumstances your car may not count either.)
If you qualify for assistance under the QMB program, you will not have to pay:
* Medicare's hospital deductible amount, which is $876 per benefit period in 2004;
*The daily co-insurance charges for extended hospital and skilled nursing facility stays;
*The Medicare Medical Insurance (Part B) premium, which is $66.60 per month in 2004;
*The $100 annual Part B deductible;
*The 20 percent co-insurance for services covered by Medicare Part B, depending on which doctor you go to.
If you qualify for assistance under the SLMB program, you will not have to pay the $66.60 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 welfare or social service agency to apply. For more information about either program, call CMS’s toll-free telephone number, (800) 633-4227.