Social Security, SSI and Medicare Facts

SOCIAL SECURITY, SSI, AND MEDICARE FACTS FOR 1999

by James Gashel

FROM THE EDITOR: This article appeared in the December 1998 issue of the BRAILLE MONITOR, published by the National Federation of the Blind (NFB). Mr. Gashel is Director of Governmental Affairs for the NFB, and is one of the world's leading experts in this field.

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:

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 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.

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.

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.

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.

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.

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 $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 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 $384, up from $382 in 1998.

Part A of Medicare pays all covered charges for services in a skilled nursing facility for the first 20 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.

For most beneficiaries there is no monthly premium charge for Medicare Part A coverage. Those who become ineligible for SSDI 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 1999 is $309 per month. This is reduced to $170 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 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.

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 48 of the 50 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 48 of the 50 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.)

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% 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 $45.50 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'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.