HS311 Ch7 Social Security, Medicare, and other Gov't Programs

How many days in a Skilled Nursing Home are provided under Medicare part A? How many additional days are available under a copay?

- 20 days -80 additional days w/copay

Who is eligible for Part A of Medicare benefits? (4)

- People age 65+ entitled to SS retirement or survivor benefits. - Disabled people who have been eligible to receive SS benefits for 2 years b/c of disability. -Dependents age 66+ of fully insured workers age 62+ - fully insured workers who have kidney disease.

How many days are available for for each benefit period of Medicare Part A? How many of those days are paid in full after initial deductible? How many days are available with copayment?

-90 days available for each benefit period - 60 days of coverage paid in full after initial deductible. - 30 days available with copayment

Are SS income benefits taxable? How about Medicare benefits?

-Monthly SS income is taxable for some recipients based on adjusted gross income. - Medicare and lump-sum SS benefits are tax free.

Can employers deduct SS contributions? How about employees? Self employed? How about Medicare premiums?

-Yes -No -self employed can deduct half as business expense. -Medicare premiums are treated like other medical expense premiums and may be deductible.

What categories of people are eligible for SS Survivor's benefits if the worker was Fully insured?

1.) A widow aged 60+ (benefits reduced if taken early). This benefit is also payable to a divorced spouse if the marriage lasted over 10 years. The widow's benefit is payable to a disabled spouse at age 50 as long as the disability commenced more than 7 years after: 1) workers death or 2) end of the year in which entitlement to a mothers or fathers benefit ceased. 2.) A dependent parent aged 62+ or over who was a dependent of the deceased worker at the time of death.

What categories of people may be eligible for disability benefits?

1.) Certain family members not eligible for SS benefits may be eligible if they're disabled. 2.) Disabled children are subject to the same definition of disability as workers. 3.) disabled widows must be able to engage in any gainful (rather than substantially gainful) employment.

Who gets survivors benefits if a "currently insured" worker passes? (2)

1.) Dependent single children 2.) Spouse caring for a child

How many days must you be in the hospital before you are eligible for Skilled Nursing home benefits under Medicare part A?

3

As of this year, Evelyn, aged 37 had 28 credits under Social Security. She earned 24 of these credits prior to the birth of her first child 11 years ago. She has earned 4 credits since she has last re-entered the labor force 1 year ago. A) Is Evelyn fully insured? B) Is Evelyn currently insured? C) Is Evelyn disability insured?

A) Yes, although she doesn't have 40 credits, she does qualify as fully insured under the second test. If Evelyn dies or is disabled this year, 28 credits is more than the # of years elapsing after she reached 21 and prior to her death or disability. B) No, because she wouldn't have earned 6 credits during the last 13 quarters if she were to die today. However, thus has no bearing on her survivors benefits because she is fully insured. C) Although Evelyn is fully insured, she is not disability insured because she doesn't have the minimum # of credits within a recent period of time. She would need 20 more credits during the last 40 calendar quarters, and she only has 4.

What is the nature of the social security and Medicare trust funds?

All payroll taxes and other sources of funds for SS and Medicare are deposited into 4 trust funds: 1.) Old age and survivors fund 2.) disability fund 3.) 2 Medicare funds Benefits and administrative expenses are paid out of the appropriate trust fund from contributions to that fund and any interest earnings on accumulated assets. The trust funds have limited reserves and serve as many emergency funds in periods when benefits exceed contributions, such as fines of high unemployment.

To what extent, if any are benefits from unemployment insurance, temporary disability insurance programs, and workers compensation insurance included in a recipients gross income for federal income tax purposes?

Benefits from unemployment and temporary disability are included in a recipients taxable income. Workers compensation benefits are received tax free.

To what extent are SS benefits taxed to recipients?

Benefits received in the form of monthly income under SS are subject to some taxation unless you make under $25,000 or less for a single tax payer. 50% of earnings between 25-35K are included in taxable income. 85% of income over 35K is included in taxable income. Medicare benefits and any lump-sum SS benefits are received tax free.

The process for determining whether income benefits of Social Security beneficiaries under the full retirement age should be reduced because of earned income that exceeds a specified amount that is subject to annual indexing.

Earnings Test

Tf. Social Security retirement benefits begin automatically at a beneficiary's full retirement age.

False. A beneficiary must apply for benefits in order for them to begin.

The old age, survivors, disability, and health insurance program of the federal government. This program consists of Social Security and Medicare.

OASDHI

The term used to describe the traditional Medicare Parts A and B

Original Medicare

What % of workers are covered by Social Security? How about Medicare?

SS- 95% Medicare- 98%

Enables employee to verify their contributions to the SS and Medicare programs, and contains an estimate of benefits that will be available because of retirement, disability, or death.

The Social Security Statement (found online)

What is the relationship between a worker's PIA and benefits available for dependents and survivors?

The primary insurance amount is the amount a worker receives if they retire at full retirement age or become disabled; it is the amount on which benefits for family members are based. If a worker is retired or disabled, benefits are paid to family members as follows: -The spouse at full retirement age, or a spouse at any age caring for a disabled child or child under 16, receives 50% if the worker's PIA. If a worker dies, benefits are paid to family members as follows: -The spouse at full retirement age receives 100% if the worker's PIA. - A spouse at any age caring for a disabled child or child under 16 receives 75% if the worker's PIA. - Each child under 18 also receives 75% of worker's PIA. - A worker's sole dependent parent receives 82.5% of PIA, while two dependent parents receive 75% each. However, the full benefits described above may not be payable because of a limitation imposed in the total benefits that may be paid to a family.

Who is eligible for Medicare Part D?

Those entitled to Part A and enrolled in Part B.

How is Part B if Medicare financed?

Through monthly premiums paid by people eligible for benefits and contributions from the federal government.

Tf. A family will usually reach the maximum benefit under Social Security if three or more family members are eligible for benefits.

True

Tf. By electing a Medical Advantage Plan, a Medicare beneficiary may have more comprehensive benefits than those provided by original Medicare.

True

Tf. If a person continues to work during the period of delayed retirement, it is possible for a worker's primary insurance amount to be higher than it would have been at full retirement age.

True

Tf. Part A if Medicare provides benefits for home health care.

True

What categories of people are eligible for SS Survivor's benefits if the worker was either fully or currently insured?

1.) Dependent unmarried children under 18. This child's benefit will continue until age 19!-/ long as they are a full-fine student. In addition, disabled children of any age are eligible for benefits as long as they were disabled before their 22nd birthday. 2.) a Spouse caring for at least one of the retired worker's children who is under age 16 or disabled and entitled to a child's benefit.

What are the 3 main factors affecting retirement benefits?

1.) Reduced monthly benefits for early retirement (minimum age 62) 2.) Increased monthly benefits for late retirement (until age 70) 3.) Earnings test- Social Security income for beneficiary's under normal retirement age is reduced if wages exceed a specified amount.

In addition to a monthly income benefit to the worker, who is entitled to SS retirement benefits other than the worker? (3)

1.) Spouse aged 62+ 2.) A spouse caring for a worker's child 3.) Dependent unmarried children under 18

Which dependents get benefits of retired workers? (4)

1.) Spouse aged 62+ 2.) Spouse if any age caring for a child under 16 or disabled. 3.) Dependent children under 18 (19 for high school student) 4.) Disabled children

What are the two types of Medicare Part D plans?

1.) Through Medicare Advantage plan that has a prescription drug program. 2.) Stand-Alone Plan- available to people enrolled in original Medicare or Medicare Advantage plans without prescription drug programs. The main differences between the two types of plans are in the process and enroll emend and premium payment.

Who gets survivors benefits if a "fully insured" worker passes? (5)

1.) dependent single children 2.) spouse caring for child 3.) $255 death benefit (unchanged since 1935). Partially used to get funeral directors to file death certificate with social security. 4.) Widow aged 60 or older (reduces before full retirement age) 5.) Dependent parent aged 62+

How many months of life expectancy must be left to qualify for Hospice care under Medicare part A?

6 months or less life expectancy

HOW MANY LIFETIME RESERVE DAYS DOES MEDICARE PART A HAVE?

60 days

How many consecutive days must a patient be out of the hospital in order to enter a new benefit period under Medicare Part A?

60 days

How do covered people pay for Medicare Part B? Does the government help contribute?

Covered people pay a monthly premium. General revenues of the federal government cover the remainder (about 75%) of the program's cost.

An insured status under Social Security that requires a person to have at least 6 credits during the 13 calandar quarters ending with the quarter in which the death occurs.

Currently Insured

A mental or physical impairment that prevents a worker from engaging in any substantial gainful employment.

Disability

The insured status under Social Security necessary to receive disability benefits. It requires that a worker: (1) be fully insured (2) have had a minimum amount of work under Social Security within a recent period. (This period varies by age of the disabled worker)

Disability Insured

-Retirement income benefits reduced for beneficiaries UNDER FULL RETIREMENT AGE if earned income exceeds the annually indexed amount - Earnings test ends when beneficiary attains full retirement age - A reduction of $1 for each $2 earned in excess of $17,640 in 2019. A reduction of $1 for every $3 earned over $46,920 in year of watching Full Retirement Age. - Note: earnings restatement is worried about what you EARN (not what you gain in investments, etc) - Note: the benefits they take (or reduce), are DEFERRED meaning you will get it back later

Earnings Test

What % of earnings do Employers and Employees pay for Social Security? How about self-employed people?

Employees and Employees each contribute 6.2% of the employees earnings up to an annually indexes limit (wage base). Self-employed people contribute 12.4% of their earnings.

What percentage of earnings do employers/employees contribute to Medicare Part A? How about self-employee people?

Employees and Employers contribute 1.45% of all earnings to Medicare Part A (no cap). Self-employed people pay 2.9%

Tf. A Medicare beneficiary who was released last week from the hospital but is going back after 7 days will start a new benefit period for Part A purposes.

False. A new 90-day benefit period begins after an individual has been out of a hospital or skilled-nursing facility for 60 consecutive days.

Tf. A person born in 1962 will be eligible to receive full Social Security retirement benefits when he or she reaches age 65.

False. A person born in 1962 will be eligible to receive full social security benefits when they reach age 67.

Tf. A shortcoming to the Social Security program is that it covers slightly less than 75% of working people.

False. Over 95% of working people are covered under Social Security. Those who do not participate may be covered under other programs.

Tf. There is a reduction in Social Security benefits under the earnings test for a 72-year-old person who goes back to work and earns $40,000 annually.

False. There is no earnings test reduction for a worker older than their full retirement age.

Tf. A Medicare prescription drug plan with the standard benefit structure pays 90% of prescription drug costs after a beneficiary satisfies a $500 deductible.

False. A Medicare prescription drug plan with the standard benefit structure pays 75% of the next $2,970 of prescription drug costs after an annual deductible of $325 (in 2013) has been met. Benefits then cease until a beneficiary's total drug cost equals $4,750 (2013). Subsequently, the plan pays for 95% of covered drug costs. These dollar figures are subject to indexing.

Tf. Subject to dollar maximums, Part B if Medicare provides benefits for eyeglasses, hearing aids, and orthopedic shoes.

False. Benefit for eyeglasses, hearing aids, and orthopedic shoes are excluded.

Tf. Enrollment in Medicare Part B is automatic for anyone reaching age 65 as long as they have been paying FICA taxes.

False. Enrollment is automatic only if a beneficiary was receiving retirement benefits before age 65. However, the beneficiary can reject the Part B coverage. Anyone else must specifically elect coverage.

Tf. In virtually all cases, employees must bear the full cost of providing workers compensation benefits.

False. In almost all cases, the full cost of providing workers compensation benefits is borne by the employers, not the employees.

Tf. Medicare benefits are partially subject to taxation for beneficiaries above statutory income limits.

False. Medicare benefits are received tax free.

Tf. The formulary for a Medicare prescription drug plan must include all drugs that can be legally sold.

False. Medicare prescription drug plans are required to include at least 2 drugs in most therapeutic classes. However, most plans cover more than the minimum required number of drugs.

Tf. Part A of Medicare pays for inpatient hospital services for up to 365 days for an uninterrupted stay in a hospital.

False. Part A pays for inpatient hospital services for an uninterrupted stay for up to 90 days plus another 60 lifetime reserve days.

Tf. Medicare Part D (prescription drug coverage) is a mandatory benefit financed by additional FICA taxes.

False. Participation in Part D is voluntary.

Tf. Medicare beneficiaries may switch prescription drug plans at any time as long as they give 60 days notice.

False. Unless a beneficiary is eligibility for a special enrollment period, he or she may switch plans during an election period that runs from November 15 to December 31 of each year. The new plan takes effect in the following January 1.

Tf. Workers compensation benefits are included in a recipient's gross income for income tax purposes.

False. Workers compensation benefits are received free of income taxation.

The age at which a worker can retire under Social Security and receive non reduced benefits equal to his/her primary insurance amount (PIA). Also referred to as the "normal" retirement age. This age is gradually increasing to 67, based on birth year.

Full retirement age

An insured status under Social Security. This status requires either: (1) 40 credits (2) at least as many credits (but a minimum of 6) as there are years elapsing after 1950 (or after the year in which age 21 is reached, if later) and before the year in which a person dies, becomes disabled, or reaches age 62, whichever one comes first.

Fully Insured

What is the process for appealing the denial of SS claims for benefits?

If an applicant wishes to appeal a SS decision, they can do so in writing within 60 days after receiving a written denial of benefits. Level 1: Reconsideration; it is a complete review of the claim by someone who didn't take part in the first decision. If the applicant disagrees with the reconsideration decision, they may request a hearing. In most cases, applicants will attend such hearings either in person or video conference. They may bring representatives or witnesses, and the government may also have expert witnesses. The administrative law judge may question the applicant and witnesses and the applicant and their representative may also question the government witnesses. If an applicant disagrees with the hearing decision, they may ask for a review by the SS's Appeal Council. It may refuse to hear the case, return it to an administrative law judge, or make the decision itself. If the applicant disagrees with the Appeal Councils decision or the appeal council refuses to hear the case, the applicant may file a lawsuit in federal district court.

What happens if the total benefits for a family exceed the maximum family benefit under SS?

If this happens, the worker's benefit (in the case of retirement and disability) isn't affected, but the benefits of other family members are reduced proportionately.

Option that allows beneficiaries to select HMOs and other alternatives to the original Medicare Program (A and B)

Medicare Advantage (Part C) Note: advantages: broad coverage Disadvantages: HMOs, geographic availability

How much does Medicare Advantage increase the options available to Medicare beneficiaries for obtaining medical expense coverage?

Medicare Advantage plans include HMOs, PPOs, and PSOs, private fee for service plans, medical savings accounts. And special needs plans. These plans must provide all benefits available under Part A and B, but also may include additional benefits as part of the basic plan or for an additional fee.

Part of the Medicare program that provides benefits for expenses incurred in hospitals, skilled-nursing facilities, and hospices.

Medicare Part A

Part of the Medicare program that provides benefits for most medical expenses not covered under Part A

Medicare Part B

-monthly premium - plan pays 75% of next layer of covered drug costs. -for catastrophic coverage, copay 5% of prescription cost (Part D pays 95%)

Medicare Part D

How are temporary disability benefits treated regarding income tax?

Must be included in gross income. Disabled w/low gross incomes may be receive federal tax credit.

To what extent are copayments required for Medicare Part B?

Part B pays 80% of charges for covered medical expenses after deductible is paid.

Who is eligible for Medicare Part B?

People eligible for Medicare part A (65+ fully insured and disabled people)

The amount a worker will receive under Social Security if they retire at full retirement age or become disabled. It is also the amount in which all other Social Security income benefits are based.

Primary Insurance Amount (PIA)

What is the definition of disability under Social Security?

Requires a mental or physical impairment that prevents a worker from engaging in any substantially gainful employment. The disability must also have lasted (or expected to last) at least 12 months or be expected to result in death.

Describe the automatic Cost of Living Adjustment Provision under SS as it relates to benefit amounts.

SS benefits are increased automatically each January if there was an increase in the CPI for the one year period ending in the 3rd quarter of the prior year. The increase is the same as the increase in CPI since the last cost of living adjustment, rounded to the nearest .1 %

Describe the filing process for SS benefits.

SS benefits don't begin until an application for benefits is made. Applications can be made via phone, online, or in person. To ensure timely commencement of retirement benefits, an individual should apply 3 months before they want benefits to begin. Application for disability and survivor benefits should be made as soon as possible after the onset of disability or death of a covered worker. Specified info that must be filed: -SS # -Birth Certificate -W2 forms or self-employment tax return for prior year. -military discharge papers if applicable -Spouse's/children's birth certificate and SS# -proof of US citizenship or lawful status if applicant wasn't born in US. - Name if bank and account # so benefits can be direct deposit Proof of death is required for receipt of survivors benefits, and verification of disability is needed to begin disability benefits.

An annual statement automatically issued by the Social Security Administration that enables an employee to verify his/her contributions to the Social Security and Medicare programs. The statement also contains an estimate of benefits that will be available because of retirement, disability, or death.

Social Security Statement

What are the possible actions that can better ensure the adequacy of the SS/Medicare trust funds?

The solution to ensuring the adequacy of these funds lies in doing one or both of the following: 1.) increasing revenue into the trust funds 2.) decreasing benefit costs Can do this by: - raising the tax rate - increase wage base for SS - subject larger portion of income benefits to tax -raise age for benefits - lower cost of living increases - increase Medicare deductible and co payments -establish some degree of privatization of SS.

How are unemployment insurance benefits treated regarding income taxes?

They are included in recipient's gross income

How are workers compensation benefits treated regarding income taxes?

They are received income tax free.

What happens to individuals who aren't enrolled in Medicare Part D when they are initially eligible and don't have credible prescription drug coverage?

They pay a penalty

Tf. Part A, the hospital portion of Medicare, is available to disabled people under age 65 who have been eligible to receive Social Security benefits for 2 years because of their disability.

True

Tf. Part B of Medicare pays for prostate cancer screening and certain other preventive care.

True

Tf. Social Security and Medicare are based on a system of funding that the Social Security Administration refers to as partial advance funding.

True

Tf. The definition of disability under Social Security is very rigid.

True

Tf. The primary insurance amount is the amount of the Social Security benefit a worker will receive if they retire at full retirement age or become disabled.

True

Tf. Unemployment insurance is intended to provide short-term benefits (typically 26 weeks) to workers who lose their jobs.

True

Tf. Workers compensation laws often have a short waiting period for disability income benefits.

True

Joint federal and state programs to provide income benefits to unemployed workers who meet specific program requirements. In most states, benefits are financed entirely by employer contributions for a max of 26 weeks.

Unemployment Insurance

How many home health care days are available under Medicare part A?

Unlimited visits (indefinite)

Laws in all states that require employers to provide benefits to employees for losses that result from work-related accidents or diseases.

Workers compensation