Ch.7: SOCIAL SECURITY, MEDICARE and other GOVERNMENT PROGRAMS
Medicare medical savings account (MMSA) plans.
These are similar to health savings accounts (HSAs). A beneficiary has a high-deductible policy, with the size of the deductible varying from plan to plan. Medicare then puts an annual amount into a medical savings account that can be used for unreimbursed medical costs.
formulary:
a list of approved drugs that the plan will cover. A formulary does not need to cover every prescription drug. By law, it must include at least two drugs in every therapeutic class.
EARNINGS TEST:
a process for determining whether income benefits of Social Security beneficiaries under full retirement age should be reduced because earned income exceeds a specified amount. For the earnings test, earned income includes wages and net self-employment income. It does not include interest and dividends
* MOTHER'S OR FATHER'S BENEFIT:
benefit for a spouse of any age if the spouse is caring for at least one child of the retired worker as long as the child is (1) under age 16 or (2) disabled and entitled to a child's benefit as described below.
Primary insurance amount (PIA):
the monthly amount a worker receives if he or she retires at full retirement age or becomes disabled, and it is the amount on which benefits for family members are based. The average PIA for a worker who retires in 2015 at the full retirement age is about $1,294. Table on p. 7.12 & 7.13
TEMPORARY DISABILITY LAWS:
under which employees can collect disability income benefits, regardless of whether their disability begins while they are employed or unemployed.
* Fully insured categories of persons eligible for benefits:
* a widow or widower aged 60 or older. * a parent aged 62 or over who was a dependent of the deceased worker at the time of death
Survivor's benefits: currently insured
* to a surviving spouse who was living with the deceased worker at the time of death * • to a surviving spouse (other than a divorced spouse) who was not living with the deceased worker at the time of death if the surviving spouse is eligible for or entitled to benefits based on the deceased wage earner's record for the month of death * • to children who are eligible for or entitled to benefits based on the deceased wage earner's record for the month of death
* WORKERS' COMPENSATION LAWS
* —a form of both social insurance and liability insurance—were enacted to require employers to provide benefits to employees for losses resulting from work-related accidents or diseases. These laws are based on the principle of liability without fault.
Two categories of insured if deceased worker was either fully or currently insured at death:
* • dependent, unmarried children under the same conditions as previously described for retirement benefits * • a spouse (including a divorced spouse) caring for a child or children under the same conditions as described for retirement benefits
FULL RETIREMENT AGE
(aka normal retirement age): or the age at which nonreduced retirement benefits are paid, is 65 for workers born in 1937 or before; now after 1960 its' 67 years or later
MEDICARE: TYPES OF BENEFITS
* PART A- Hospital Insurance * Part B - Medical Expense Insurance * Part C - Medicare Advantage * Part D - Prescription Drug Coverage
SOCIAL INSURANCE PROGRAM CATEGORIES:
* Social Security * Medicare * Unemployment insurance * Temporary disability insurance * Workers' compensation insurance
* Medicare Part A—
Employees pay 1.45 percent of all earnings. Employers pay the same. Self-employed persons pay 2.9 percent of all self-employment income.
* Social Security—
Employees pay 6.2 percent of the first $118,500 (2015) of earnings. Employers pay the same. Self-employed persons pay 12.4 percent of first $118,500 (2015) of self-employment income.
MEDICARE ADVANTAGE:
Medicare + Choice changed to this after the provisions in 2005 of the Medicare Prescription Drug, Improvement, and Modernization Act
Social Security Blackout Period:
No benefits are payable for the surviving spouse of a deceased covered worker from the time the youngest child reaches age 16 (or is no longer disabled in certain cases) until the surviving spouse is 60.
coverage gap (donut hole):
Once the beneficiary and the Part D drug plan have spent $2,960 for covered drugs, the beneficiary will be in the coverage gap (donut hole) . In 2015, the beneficiary pays 45% of the cost of covered brand-name prescription medications and 65% of the cost of generic drugs. The donut hole continues until total out-of-pocket cost reaches $4,700. This annual out-of-pocket spending amount includes the yearly deductible, copayment, and coinsurance amounts.
ORIGINAL MEDICARE -
Parts A (hospital insurance) and B (medical expense insurance) are often referred to as the this.
Social Security: Three types of benefits
Retirement (old-age) benefits, survivors benefits, and disability benefits
special needs plans ( SNPs).
SNPs are designed primarily to meet the needs of beneficiaries who are eligible for both Medicare and Medicaid (or who have certain chronic conditions) and who live in institutions such as nursing homes, or continue to live at home but need the level of care provided by such institutions. These plans help manage and coordinate the many services and providers needed by such beneficiaries. These plans are available only in limited geographic regions.
Necessity of Coverage:
Seniors fall into three categories as to the necessity for coverage: those with creditable coverage, those with less-than-creditable coverage, and those with no drug coverage.
reconsideration:
The first level of appeal is called this and is a complete review of the claim by someone who did not take part in the first decision.
STATE HEALTH INSURANCE ASSISTANCE PLAN (SHIP):
These are state programs that get money from the federal government to give free health insurance counseling and assistance to people with Medicare.
* credit:
To be eligible for benefits under Social Security, an individual must have this for a minimum amount of work under the program. For 2015, a worker receives one of this (also referred to as a quarter of coverage) for each $1,220 in annual earnings on which Social Security taxes were paid. However, no more than four of these may be earned in any one calendar year. Consequently, a worker who pays Social Security taxes on as little as $4,800 ($1,220 x 4) at any time during the year will receive the maximum four credits
Two types of Plans for Medicare Part D:
enrolled; stand-alone plan; main differences between these two types of plans are in the process of enrollment and premium payment.
* Three types of insured status:
fully insured, currently insured, and disability insured
HMO:
health maintenance organization; an alternative to original Medicare
CURRENTLY INSURED:
it is only necessary that a worker have earned at least six credits during the 13 calendar quarters ending with the quarter in which his or her death occurs.
Workers' compensation laws typically provide four types of benefits:
medical care, disability income, death benefits, and rehabilitation benefits.
UNEMPLOYMENT INSURANCE:
social security Act 1935, The act stipulated that a payroll tax was to be levied on covered employers for the purpose of financing these
PARTIAL ADVANCE FUNDING:
taxes are more than sufficient to pay current benefits and thus provide some accumulation of assets for the payment of future benefits
Disability definition:
is very rigid and requires a mental or physical impairment that prevents the worker from engaging in any substantial gainful employment. The disability must also have lasted (or be expected to last) at least 12 months or be expected to result in death. A more liberal definition of disability applies to blind workers who are aged 55 or older. They are considered disabled if they are unable to perform work that requires skills or abilities comparable to those required by the work they regularly performed before reaching age 55 or becoming blind, if later.
OASDHI:
old-age, survivors, disability, and health insurance program of the federal government
MEDICARE PART C:
originally called Medicare + Choice, in 1999 it went into effect
* FULLY INSURED:
A person is fully insured under Social Security if either of two tests is met. The first test requires 40 credits of coverage. Once a person acquires this credit, he or she is fully insured for life even if covered employment under Social Security ceases. Under the second test, a person who has a minimum of six credits is fully insured if he or she has at least as many credits as there are years elapsing after 1950 (or after the year in which he or she reaches age 21, if later) and before the year in which he or she dies, becomes disabled, or reaches age 62, whichever occurs first. Therefore, a worker who reached age 21 in 2000 and died in 2013 would need 13 credits for his or her family to be eligible for survivors benefits.
Medicare Part D
Along with numerous other changes to Medicare and the establishment of health savings accounts, the Medicare Prescription Drug, Improvement, and Modernization Act added a prescription drug program to Medicare—[this]. The act also gives employers a financial incentive to provide or continue to provide drug coverage to retirees as an alternative to enrollment in Part D.
preferred-provider organizations ( PPOs).
Beneficiaries can elect out-of-network care if they are willing to pay the additional cost for such care, which can be substantial.
private fee-for-service (PFFS) plans.
Beneficiaries can go to any provider who agrees to accept the payment rates determined by the plan, but they may be required to pay a portion of these rates in the form of cost sharing. If a provider does not accept the PFFS plan rates, the beneficiary is responsible for the entire balance above what the plan pays
* Medicare Part B—
Covered persons pay at least a $104.90 (2015) monthly premium. General revenues of the federal government cover the remainder (about 75 percent) of the program's cost.
* FICA TAXES:
Part A of Medicare and all the benefits of the Social Security program are financed through a system of payroll and self-employment taxes paid by all persons covered under the programs. In addition, employers of covered persons are also taxed. They are often referred to as this because they are imposed under the Federal Insurance Contributions Act.
MEDICARE PART A:
provides benefits for expenses incurred in hospitals, skilled-nursing facilities, and hospices. Some home health care benefits are also covered. In order for benefits to be paid, the facility or agency providing benefits must participate in the Medicare program. Virtually all hospitals are participants, as are most other facilities or agencies that meet the requirements of Medicare.
Medicare Part B:
provides benefits for most medical expenses not covered under Part A.
Social security:
refers to any of several programs resulting from the Social Security Act of 1935 and its frequent amendments over the years The act established four programs aimed at providing economic security for the American society: (1) old-age insurance, (2) unemployment insurance, (3) federal grants for assistance to certain needy groups (the aged, the blind, and children), and (4) federal grants for maternal and child welfare, public health work, and vocational rehabilitation.
DISABILITY INSURED:
requires that a worker (1) be fully insured and (2) have a minimum amount of work under Social Security within a recent time period. In connection with the latter requirement, workers aged 31 or older must have earned at least 20 credits during the 40 calendar quarters ending with the quarter in which disability occurs; workers aged 24 through 30 must have earned credits equal to at least one-half the number of calendar quarters from the time they turned 21 and the quarter in which disability begins; and workers under age 24 must have earned six credits during the 12 calendar quarters ending with the quarter in which disability begins.
SOCIAL SECURITY STATEMENT:
the Social Security Administration sends this every five years to all persons aged 25 or older who have covered employment under Social Security and are not currently receiving monthly benefits and are not registered with a "my Social Security" account.