Social Security, SSI, and Medicare Facts for 2001

Social Security, SSI, and Medicare Facts for 2001

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The Braille Monitor – December, 2000 Edition

Social Security, SSI, and Medicare Facts for 2001

by James Gashel

James

Gashel

From

the Editor: Jim Gashel is Director of Governmental Affairs for the National

Federation of the Blind. Here is his annual Social Security summary:
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 2001:

*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 persons 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 2000 the ceiling on taxable earnings
for contributions to the OASDI trust fund was $76,200. This ceiling is raised
to $80,400 for 2001. 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 2000 a Social Security quarter
of coverage was credited for earnings of $780 in any calendar quarter. Anyone
who earned $3,120 for the year (regardless of when the earnings occurred during
the year) was given four quarters of coverage. In 2001 a Social Security quarter
of coverage will be credited for earnings of $830 during a calendar quarter.
Four quarters can be earned with annual earnings of $3,320.

Exempt Earnings: The monthly earnings exemption for blind people who receive
disability insurance benefits was $1,170 of gross earned income during 2000.
In 2001 earnings of $1,240 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 3.5% beginning with the checks received in January, 2001. The exact dollar
increase for any individual will depend upon the amount being paid.

Standard SSI Benefit Increase: Beginning January, 2001, the federal payment
amounts for SSI individuals and couples are as follows: individuals, $530 per
month; couples, $796 per month. These amounts are increased from individuals,
$512 per month; couples, $769 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 sixty days was $776 during 2000 and is increased to
$792 during 2001. From the sixty-first day through the ninetieth day there is
a daily co-insurance amount of $198 per day, up from $194 in 2000. 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 $396, up from $388 in 2000.

Part A of Medicare pays all covered charges for services in a skilled nursing
facility for the first twenty 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 $99 per day, up
from $97 per day in 2000.

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 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 2001 is $300 per month. This is reduced to $165 for individuals who have
earned at least thirty quarters of coverage under Social Security covered employment.

The Medicare Part B (medical insurance) deductible remains at $100 in 2001.
This is an annual deductible amount. The Medicare Part B basic monthly premium
rate charged to each beneficiary for the year 2001 is $50. (The 2000 premium
rate was $45.50.) 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 ($50 in 2001). 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
2000. New guidelines will be issued in the spring of 2001. 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
$716 per month for an individual and $958 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 less than $890 per
month for an individual and $1,192 per month for couples. In Hawaii income must
be less than $820 per month for an individual and $1,098 per month for couples.

For the SLMB program the income of an individual cannot exceed $855 per month
or $1,145 for a couple in forty-eight of the fifty states and the District of
Columbia. In Alaska the income amount is $1,063 for an individual and $1,426
for couples. An individual in Hawaii can qualify if his or her income is less
than $979 per month; for couples the amount is $1,313.

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 $792 per benefit period
in 2001;

*The daily co-insurance charges for extended hospital and skilled nursing
facility stays;

*The Medicare Medical Insurance (Part B) premium, which is $50 per month in
2001;

*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 $50 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 HCFA's toll-free telephone number, (800) 638-6833.

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