Social Security, SSI & Medicare

Social Security, SSI & Medicare

James Gashel

Social Security, SSI, and

Medicare Facts for 1999

by James Gashel

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The beginning of each year brings with it 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 1999:

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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.

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Ceiling on Earnings Subject to Tax: During 1998, the ceiling

on taxable earnings for contributions to the OASDI trust fund was

$68,400. This ceiling is raised to $72,600 for 1999. All earnings

are taxed for the HI trust fund.

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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 1998 a Social Security quarter of

coverage was credited for earnings of $700 in any calendar

quarter. Anyone who earned $2,800 for the year (regardless of

when the earnings occurred during the year) was given four

quarters of coverage. In 1999 a Social Security quarter of

coverage will be credited for earnings of $740 during a calendar

quarter. Four quarters can be earned with annual earnings of

$2,960.

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Exempt Earnings: The monthly earnings exemption for blind

people who receive disability insurance benefits was $1,050 of

gross earned income during 1998. In 1999 earnings of $1,110 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.

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Social Security Benefit Amounts for 1999: All Social

Security benefits are increased by 1.3 percent beginning with the

checks received in January, 1999. The exact dollar increase for

any individual will depend upon the amount being paid.

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Standard SSI Benefit Increase: Beginning January, 1999, the

federal payment amounts for SSI individuals and couples are as

follows: individuals, $500 per month; couples, $751 per month.

These amounts are increased from individuals, $494 per month;

couples, $741 per month.

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Medicare Deductibles and Co-insurance: Medicare Part A

coverage provides hospital insurance to most Social Security

beneficiaries. The co-insurance 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

co-insurance amount.

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The Part A co-insurance amount charged for hospital services

within a benefit period of not longer than sixty days was $764

during 1998 and is increased to $768 during 1999. Beginning with

the sixty-first day through the ninetieth day there is a daily

co-insurance amount of $192 per day, up from $191 in 1998. Each

Medicare beneficiary has sixty "reserve days" for hospital

services provided within a benefit period longer than ninety

days. The co-insurance amount to be paid during each reserve day

is $384, up from $382 in 1998.

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Part A of Medicare pays all covered charges for services in

a skilled nursing facility for the first twenty days within a

benefit period. Beginning with the twenty-first day through the

one-hundredth day within a benefit period, the Part A co-

insurance amount for services received in a skilled nursing

facility is $96 per day, up from $95.50 per day in 1998.

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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 thirty-nine

months following the end of a trial work period. After that time

the individual may purchase Part A coverage. The premium rate for

this coverage during 1999 is $309 per month. This is reduced to

$170 for individuals who have earned at least thirty quarters of

coverage under Social Security-covered employment.

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The Medicare Part B (medical insurance) deductible remains

at $100 in 1999. This is an annual deductible amount. The

Medicare Part B basic monthly premium rate will increase from

$43.80 charged to each beneficiary in 1998 to $45.50 for 1999.

This premium payment is deducted from Social Security benefits

checks. Individuals who remain eligible for Medicare but are not

receiving Social Security benefits because of working pay this

premium directly.

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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 ($45.50 in 1999). Eligibility for

the SLMB program may be retroactive for up to three calendar

months.

Both programs are administered by the Health Care Financing

Administration (HCFA) 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 the spring of 1998.

New guidelines will be issued in the spring of 1999. The rules

vary from state to state, but in general:

A person may qualify for the QMB program if his or

her income is approximately $691 per month for an

individual and $925 per 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

approximately $860 per month for an individual and

$1,151 per month for couples. In Hawaii income must be

less than approximately $792 per month for an

individual and $1,060 per month for couples.

For the SLMB program the income of an individual

cannot exceed $825 per month or $1,105 for a couple in

forty-eight of the fifty states and the District of

Columbia. In Alaska the income amount is $1,027 for an

individual and $1,377 for couples. An individual in

Hawaii can qualify if his or her income is

approximately $946 per month; for couples the amount is

$1,268.

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.)

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If you qualify for assistance under the QMB program, you will not

have to pay:

* Medicare's hospital co-insurance amount, which is $768 per

benefit period in 1999;

* The daily co-insurance charges for extended hospital and

skilled nursing facility stays;

* The Medicare Medical Insurance (Part B) premium, which is

$45.50 per month in 1999;

* 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.

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If you qualify for assistance under the SLMB program, you will

not have to pay:

*The $45.50 monthly Part B premium.

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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're eligible for

help from the QMB or SLMB program. So, if you're 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 HCFA's toll-free telephone number, (800) 638-6833.

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