[NFBNJ] Social Security SSI and Medicare Facts For 2017

[joe ruffalo]

Greetings to all!
Please read and share with others.
The information is printed in the December 2016 issue of the Braille 
Monitor, the monthly publication of the National Federation of the Blind.
In the next few days, Brian mackey will forward the entire issue.
Please take careful attention to my comments provided prior to the issue.

We care. We share. We grow. We make a difference
Joe Ruffalo, President
National Federation of the Blind of New Jersey
973 743 0075
nfbnj1 at verizon.net
www.nfbnj.org
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**

Social Security, SSI, and Medicare Facts for 2017

by Parnell Diggs

>From the Editor: Every December we publish the Social Security figures that
have been announced for the coming year. Our director of government affairs
is charged with writing this annual update, and hats off to Parnell Diggs
for never once complaining or needing to be reminded that the Braille
Monitor needs this annual contribution. What follows is not easy reading,
but it may be of significant importance for those who qualify for some
assistance from the Social Security Administration. Here is what Parnell
says:

      About this time each year, we provide you with details regarding
annual adjustments in the Social Security Disability Insurance (SSDI),
Supplemental Security Income (SSI), and Medicare programs. In 2017
approximately 65 million Americans will see just a slight cost-of-living
(COLA) increase (0.3 percent) in their benefit amounts. Thus, come January,
monthly checks will be a few dollars higher.
      The 2017 amounts appear below along with some concepts which are
always good to know about the Social Security and Medicare programs if you
want to understand your rights. The COLA adjustment (if any) is based upon
the consumer price index (CPI-W), which measures the inflationary rate
against the wages earned by the approximately 173 million workers across
the nation over the previous four quarters starting with the third quarter
of the previous year. Okay, here are the numbers.

Tax Rates

      FICA and Self-Employment Tax Rates: If you have a job, you know that
you do not bring home everything you earn. 7.65 percent of your pay, for
example, is deducted to cover your contribution to the Old Age, Survivors,
and Disability Insurance (OASDI) Trust Fund and the Medicare Hospital
Insurance (HI) Trust Fund. Specifically, 6.20 percent covers OASDI, and
1.45 percent is contributed to the HI Trust Fund. Additionally, your
employer is required to match this 7.65 percent for a total of 15.30
percent.
      For those who are self-employed, there is no "employer" to match the
7.65 percent. Thus, a self-employed individual pays the entire 15.30
percent of her income. These numbers will not change in 2017 whether an
individual is employed or self-employed. As of January 2013, individuals
with earned income of more than $200,000 ($250,000 for married couples
filing jointly) pay an additional 0.9 percent in Medicare taxes not
including the above amounts.

Maximum Taxable Earnings

      For the OASDI Trust Fund, there is a ceiling on taxable earnings,
which was $118,500 per year in 2016 and will jump to $127,200 in 2017.
Thus, for earnings above $127,200, there is no 6.20 percent deducted for
OASDI. As for Medicare, there is no limit on taxable earnings for the HI
Trust Fund.

Social Security Disability Insurance (SSDI)

Quarters of Coverage
      I always like to compare the OASDI Trust Fund to an insurance policy.
You have to pay a premium to participate. Therefore, to qualify for
Retirement, Survivors, or Disability Insurance benefits, an individual must
pay a minimum amount of FICA taxes into the OASDI Trust Fund by earning a
sufficient number of calendar quarters to become fully insured for Social
Security benefits.
      In 2016 credit for one quarter of coverage was awarded for any
individual who earned at least $1,260 during the year, which means that an
individual would have needed to earn at least $5,040 to be credited with
four quarters of coverage. In 2017 the amount increases to $1,300 for one
calendar quarter or $5,200 to earn four quarters of coverage for the year.
      A maximum of four quarters can be awarded for any calendar year, and
it makes no difference when the income is earned during that year.
Basically, the taxes you pay into the OASDI and HI Trust Funds are your
premiums to participate in the Social Security and Medicare programs.
      The total number of quarters required to be eligible for benefits
depends on the individual's age. The older the individual, the more
quarters are required. Furthermore, a higher average income during an
individual's lifetime means a higher Social Security or SSDI check when
benefits start. Remember the above quoted numbers for quarters of coverage
to become fully insured are only minimum amounts.

Trial Work Period (TWP)

      This concept is often misunderstood. The amount of earnings required
to use a trial work month is based not upon the earnings limit for blind
beneficiaries, but rather upon the national average wage index. In 2016 the
amount required to use a TWP month was only $810, and this amount will
increase to $840 in 2017.
      If you are self-employed, you can also use a trial work month if you
work more than eighty hours in your business, and this limitation will not
change unless expressly adjusted.

Substantial Gainful Activity (SGA)

      The earnings limit for a blind beneficiary in 2016 was $1,820 per
month and will rise to $1,950 in 2017. Remember this is not the TWP amount.
This is to say that the TWP can be exhausted even if your income is well
below $1,950 per month. See the above information about the TWP.
      In 2017 a blind SSDI beneficiary who earns $1,951 or more in a month
(before taxes but after subtracting unincurred business expenses for the
self-employed, subsidized income for the employed, and impairment-related
work expenses) will be deemed to have exceeded SGA and will likely no
longer be eligible for benefits.

Social Security Benefit Amounts

      In January of 2017, the average amount of SSDI benefits for a
disabled worker is estimated to rise by about $4 to $1,171. Pursuant to the
Social Security Act, a cost-of-living adjustment occurs automatically when
there is an increase in inflation as measured by the Consumer Price Index
for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W indicated an
inflationary rate of 0.3 percent between the third quarter of 2015 and the
third quarter of 2016. Thus, there is a corresponding COLA increase in 2017
and a minimal increase in monthly benefit amounts.

Supplemental Security Income (SSI)

      The federal payment amount for individuals receiving SSI in 2016 was
$733 per month and will increase to $735 in 2017, and the federal monthly
payment amount of SSI received by couples will rise from $1,100 to $1,103.

Student Earned Income Exclusion

      In 2016 the monthly amount was $1,780 and will increase to $1,790 in
2017. The annual amount was $7,180 and will be $7,200 in 2017. The asset
limits under the SSI program will remain unchanged at $2,000 per individual
and $3,000 per couple.

ABLE Act

      Signed on December 19, 2014, the ABLE Act will have a significant
impact on resource limits associated with the SSI and Medicaid programs for
those who were blind or disabled by the age of twenty-six. Traditionally,
SSI beneficiaries have been required to adhere to strict resource limits:
such as a maximum of $2,000 in the bank for an individual receiving SSI
benefits. Under the ABLE Act, however, the amount on deposit in an ABLE
Account can be much higher.
      ABLE Account contributions must be designated specifically for
purposes such as education, housing (with a cautionary warning to follow),
employment training and support, assistive technology, health, prevention
and wellness, financial management, legal fees, and funeral and burial
expenses. The required implementing regulations are being enacted in most
states. Check with your financial institution of choice for a status of
ABLE Act regulations in a specific state.
      As to the warning about ABLE Account contributions for housing, it is
important to note that SSI beneficiaries may still face the traditional
$2,000 resource limit for ABLE Account funds designated for housing. Thus,
SSI beneficiaries should consider the many other purposes not subject to
the traditional resource limits when making ABLE Account contributions.
Because there are also tax advantages associated with ABLE accounts, both
SSDI and SSI beneficiaries should consult a financial advisor about
establishing an ABLE Account.

Medicare

      At this writing, the Department of Health and Human Services has not
released updated information regarding deductibles, coinsurance amounts,
and premiums for 2017. Updated Medicare information will be provided in an
upcoming issue of the Braille Monitor. But for illustrative purposes, we
will here provide you with details regarding the numbers from 2015 compared
to 2016.
      Medicare Deductibles and Coinsurance: Medicare Part A coverage
provides hospital insurance to most Social Security beneficiaries. The
coinsurance amount is the hospital charge to a Medicare beneficiary for any
hospital stay. Medicare then pays the hospital charges above the
beneficiary's coinsurance amount.
      The Part A hospital inpatient deductible was $1,260 in 2015 and
increased to $1,288 in 2016. The coinsurance charged for hospital services
within a benefit period of no longer than sixty days was $0 in 2016. From
the sixty-first day through the ninetieth day, the daily coinsurance amount
was $315 per day in 2015 and rose slightly to $322 in 2016. Each Medicare
beneficiary has sixty lifetime reserve days that may be used after a ninety-
day benefit period has ended. Once used, these reserve days are no longer
available after any benefit period. The coinsurance amount paid during each
reserve day used in 2015 was $630 and in 2016 was $644.
      Part A of Medicare pays all covered charges for services in a skilled
nursing facility for the first twenty days following a three-day in-
hospital stay within a benefit period. From the twenty-first day through
the one hundredth day in a benefit period, the Part A daily coinsurance
amount for services received in a skilled nursing facility was $157.50 for
2015 and rose just slightly to $161 in 2016.
      Most Social Security beneficiaries have no monthly premium charge for
Medicare Part A coverage. Those who become ineligible for SSDI can continue
to receive Medicare Part A coverage premium-free for at least 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
2015 was $407 monthly and increased to $411 in 2016.
      The annual deductible amount for Medicare Part B (Medical Insurance)
in 2015 was $147 and rose to $166 in 2016. The Medicare Part B monthly
premium rate for 2015 was $104.90 per month and rose to $121.80 in 2016.
For those receiving Social Security benefits, this premium payment is
deducted from your monthly benefit check. Individuals who remain eligible
for Medicare but are not receiving Social Security benefits due to work
activity must directly pay the Part B premium quarterly-one payment every
three months. Like the Part A premiums mentioned above, Part B is also
available for at least ninety-three months following the trial work period,
assuming an individual wishes to have it and, when not receiving SSDI,
continues to make quarterly premium payments.
      Programs That Help with Medicare Deductibles and Premiums: Low-income
Medicare beneficiaries may qualify for assistance through four Medicare
Savings Programs. We will discuss three of them here and leave the fourth
one alone because (to qualify for it each year) you must already be on it,
and you know who you are. Note: the below amounts may change in 2017. We
begin with the Qualified Medicare Beneficiary program (QMB) and the
Specified Low-Income Medicare Beneficiary program (SLMB). To qualify for
the QMB program in 2016, an individual's monthly income could not exceed
$1,010, and a married couple's monthly income could not exceed $1,355. To
qualify for the SLMB program in 2016, an individual's monthly income could
not exceed $1,208, and a married couple's monthly income could not exceed
$1,622.
      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. Eligibility for the SLMB program
may be retroactive for up to three calendar months.
      Both the QMB and SLMB programs are administered by the Centers for
Medicare and Medicaid Services in conjunction with the states. The rules
vary from state to state, but the following can be said: As of 2016,
resources (such as bank accounts or stocks) could not exceed $7,280 for one
person or $10,930 per couple. The third program, known as the Qualified
Disabled and Working Individuals (QDWI) Program, pays Part A premiums only
and has resource limits of $4,000 for one person and $6,000 for a married
couple. As to these programs, resources are generally things you own.
However, not everything is counted. Examples of things that don't count
include the house you live in, one car, a burial plot (or $1,500 put aside
for burial expenses), and furniture.
      If you qualify for assistance under the QMB program, you will not
have to pay the following: Medicare's hospital deductible amount, the daily
coinsurance charges for extended hospital and skilled nursing facility
stays; the Medicare Part B (Medical Insurance) premium, the annual Part B
deductible; and the coinsurance for services covered by Medicare Part B,
depending on which doctor you go to (these services include doctor
services, outpatient therapy, and durable medical equipment).
      If you qualify for assistance under the SLMB program, you will be
responsible for the payment of all of the items listed above except for the
monthly Part B premium, depending on your circumstances.
      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 that only your state can decide if you are eligible for help
from the QMB or SLMB program and also that the income and resource levels
listed here are general guidelines, with some states choosing greater
amounts. Therefore, if you are elderly or disabled, have low income and
very limited assets, and are a Medicare beneficiary, contact your state or
local Medicaid office (referred to in some states as the Public Aid Office
or the Public Assistance Office) to apply. For more information about
either program, call the Centers for Medicare and Medicaid Services (CMS)
on its toll-free number (800) 633-4227, or visit <Medicare.gov>.