Social Security, SSI and Medicare

Social Security, SSI and Medicare

SOCIAL SECURITY,
SSI, AND MEDICARE FACTS FOR 1997

by James
Gashel

This article appeared in the December
1996 edition of the BRAILLE MONITOR, published by the National Federation of
the Blind, for whom James Gashel serves as Director of Governmental Affairs.

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 1997.
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.
This 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 1996 the ceiling on taxable earnings for contributions to the OASDI trust
fund was $62,700. The taxable income ceiling for contributions to the OASDI
trust fund during 1997 will be $65,400. All earnings are subject to the HI trust
fund tax contribution of 1.45 percent for employees or 2.9 percent for self-employed
persons.
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 1996 a Social Security quarter of coverage was credited for earnings
of $640 in any calendar quarter. Anyone who earned $2,560 for the year (regardless
of when the earnings occurred during the year) was given four quarters of coverage.
In 1997 a Social Security quarter of coverage will be credited for earnings
of $670 during a calendar quarter. Four quarters can be earned with annual earnings
of $2,680.
Exempt Earnings: The monthly earnings
exemption for blind people who receive disability insurance benefits was $960
of gross earned income during 1996. During 1997 the monthly exempt amount is
$1,000. Technically, this exemption is referred to as an amount of monthly gross
earnings which does not show "substantial gainful activity." Earnings
of $1,000 or more per month before taxes for a blind SSDI beneficiary in 1997
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 for
1997: All Social Security benefits, including retirement, survivors, disability,
and dependents' benefits are increased by 2.9 percent beginning with the checks
received in January, 1997. The exact dollar increase for any individual will
depend upon the amount being paid.
Standard SSI Benefit Increase: Beginning
January, 1997, the federal payment amounts for SSI individuals and couples are
as follows: individuals, $484 per month; couples, $726 per month. These amounts
are increased from individuals, $470 per month; couples, $705 per month.
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.
The Part A co-insurance amount charged
for hospital services within a benefit period of not longer than 60 days was
$736 during 1996 and is increased to $760 during 1997. From the sixty-first
day through the ninetieth day there is a daily co-insurance amount of $190 per
day, up from $184 in 1996. Each Medicare beneficiary has 60 "reserve days"
for hospital services provided within a benefit period longer than 90 days.
The co-insurance amount to be paid during each reserve day is $380, up from
$368 in 1996.
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 within
a benefit period, the Part A co-insurance amount for services received in a
skilled nursing facility is $95 per day, up from $92 per day in 1996.
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 39 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 1997 is $311 per month. During 1997 this premium
rate is $187 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 1997. This is an annual deductible amount. The
Medicare Part B basic monthly premium rate will increase from $42.50 charged
to each beneficiary and withheld from Social Security checks during 1996 to
$43.80 per month during 1997. Medicare Part B coverage may be continued for
people who complete a trial work period and become ineligible to receive Social
Security Disability Insurance cash benefits. This monthly premium rate is $43.80,
the same amount paid by Social Security beneficiaries through withholding from
their monthly Social Security checks.
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 ($43.80 in 1997). 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 in any state, the income of an individual or couple must
be less than the threshold amount which is announced for each year. The threshold
amount is revised annually to reflect changes in national poverty level guidelines.
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 $665 per month for an individual and $884
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 approximately $825 per month for an individual and $1,099 per month
for couples. In Hawaii income must be less than approximately $763 per month
for an individual and $1,014 per month for couples.
For the SLMB program the income of an
individual or a couple cannot exceed the poverty level by more than 20 percent.
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, which
is $760 per benefit period in 1997;
+ The daily co-insurance charges for
extended hospital and skilled nursing facility stays;
+ The Medicare Medical Insurance (Part
B) premium, which is $43.80 per month in 1997;
+ 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 $43.80 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'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.