11. Social Security, Medicare and Medicaid
Length of Disability Payments
continue unless their condition improves or they return to performing substantial work. - periodically reviewed, may require exam
Foundation of social security
foundation upon which a person can build his or her financial future.
federal Supplemental Security Income (SSI) asset limit
individual of $2,000 and $3,000 for a married couple
dates for SS disability
- Injury- the date that the injury occurs that disables the individual. - File - the date that the disabled individual files his or her paperwork with the SSA - Approval - the date that the SSA approves the claim of the disabled individual. - Benefits - begin with the sixth full month of a person's disability (the injury date).
Medicaid Mandatory Benefits
- Inpatient and outpatient hospital services - Physician services - Nursing facility services : must be "medically necessary" - Home health services - Early and periodic screening, diagnostic, and treatment services - Laboratory and x-ray services
Social Security Tax Dollars
- employee and employer pay 6.2% of earnings up to the taxable wage base $147,000 (2022) - another 1.45% of all earnings (not subject to the Wage Base limit) to fund Medicare benefits - total tax = 7.65% - 0.9% Medicare Surtax is charged on earned income over $200k for single tax filers and $250k for married filing jointly
SS Statement
- given each year to workers aged 60 or older and not already receiving Social Security benefits - displays their earnings record and provides estimates of the retirement, disability and survivor benefits - received about three months before his or her birthday.
Medicare part A
- hospital coverage - deductible of $1,556 for first 60 days - daily coinsurance $389 for days 61 - 90 - 60-day lifetime reserve for greater than 90 days coinsurance $778 per day. - benefit period ends 60 days out of hospital and new 90 day period begins - covers skilled nursing facility after at least 3 days in hospital. Paid in full for 20 days. Days 21-100 coinsurance of $194.50 per day - hospital charges for general duty nursing, hospital equipment, drugs and biologics, use of the operating room, diagnostic or therapeutic services, and blood transfusions.
Medicaid Funding
- jointly funded by both the federal and state governments. - federal government paying a larger percentage to states with lower per capita income. - states pay the rest and on average approximately 25% of a states annual budget
Medicare part B
- medical coverage - if enrolled in part A, automatically enrolled unless choose to opt out. - premium of $170.10 per month
Information required to process a disability claim
- medical records - lab test results - contact info for doctors and facilities - medications - names of employers and job duties for past 15 years
Treatment of Asset Transfers
- penalty for transfer less than fair market value - 5yr look-back - permitted transfers: - to a spouse or blind or disabled child - Transfer in trust for the benefit of a person under age 65 and disabled - Transfer of a home to a child under the age of 21 or a child who has lived in the home for at least two years - Transfer of a home to a sibling who has an equity interest in it and who lived in it at least a year before
Medicare part B late enrollment penalty
- premium increase 10% for each year was eligible but not enrolled - exception to penalty continuous group coverage from age 65 until their actual retirement date. Have 8 months after their group coverage ends to enroll
Disability Benefits
- provides benefits for workers who have earned enough Social Security credits to qualify for disability on their own work record. -other individuals that may be eligible: - Widows and widowers with disabilities - People with disabilities who have low income and few assets - Children over age 18 with disabilities - Children of any age with disabilities
Ways to receive social security
- retirement benefits - Disabled, - A spouse, former spouse, or a dependent of someone who is receiving Social Security, - A widow or widower caring for a child (under age 16), - A child under 18 (19 if still in high school), - A widow or widower age 60 or older, or - Dependent parent of someone who has died.
Taxable SS benefits
- single combined income between $25,000 and $34,000 may have to pay taxes on up to 50% of Social Security benefits. Above $34,000 up to 85% subject to income tax. - Married filing jointly $32,000 and $44,000.
Benefits paid to family members
- spouse 62 or older, unless higher own Social Security benefit - spouse at any age caring for child under age 16 or disabled and receiving Social Security - unmarried children under 18, full-time student under 19, or 18 or older and disables before age 22
amount of benefits paid is based on
- the amount of earnings on which Social Security taxes have been paid. - age when Social Security benefits commence
Self-employed individuals SS tax
- total of 15.3% (7.65%x2 - both employer and employee portion) of their net earnings from self-employment a self-employment (SE) tax - allowed a tax deduction of 7.65% on their tax return. (SS tax wage base = gross income x (1-.0765))
The Social Security Administration uses the Social Security number to
- track people's earnings while they are working - track their benefits once they start getting Social Security. - Social Security Administration will not give information from their records without written consent of the individual, unless the law requires or permits it
SS definition of disability
- unable to engage in any substantial gainful activity - medically determinable physical or mental impairment - expected to last for a continuous period of not less than 12 months or result in death. - no such thing as partial disability benefits from Social Security.
Working and Receiving reduced Benefits
- under full retirement age, $1 in benefits is withheld for each $2 in earnings he or she has above the annual limit of $19,560 in 2022. - at full retirement age, reduced by $1 for every $3 earned over $51,960 until the month when the full retirement age is reached. After full retirement, no reduction.
survivor SS benefit
- usually ranges from 75% to 100% each. - limit 150% to 180% of the worker's benefit rate
medicaid income limits
- varying income eligibility requirements including limits for applicants who reside in nursing facilities and those that still live in the "community". - common income standard is 138% of the federal poverty level. - In 2022, 138% of the federal poverty level for an individual is $1,563 monthly or $18,756 annually. - increases for a family with 2, 3, 4, or more persons.
options when working beyond full retirement age
1) continue working and get full retirement benefits no matter how much he or she earns. OR 2) continues working and chooses to delay getting retirement benefits until he or she reaches age 70, credits will be earned that increase the worker's benefit amount.
late retirement increases benefit in 2 ways
1) increase average earnings 2) credit of 8% per year up to age 70
Special One-time Death Benefit
$255 paid only to his or her widow(er) or minor children.
Earning Credits
- In 2022, a person earns one credit for each $1,510 in earnings up to a maximum of four credits per year. - Most workers need 40 credits, essentially 10 years of work, to qualify for benefits.
disability benefit waiting period
- 5 full months of disability with benefits payable in the sixth full month from the injury date - benefit are paid the following month
amount of family members SS benefit
- 50% of individual's benefit - limit of 150% to 180% of a person's retirement benefit - if sum of the benefits payable on a worker's account is greater than this family limit, the benefits to the family members will be reduced proportionately
Who Can Receive Survivor Benefits?
- 60 or older - 50 or older and disabled - caring for child under 16 or disabled - unmarried children under 18, full-time student under 19, or 18 or older and disables before age 22 - parents dependent on worker for at least 50% of their support - divorced widowers if qualified to receive divorced spouse benefits
Out of every dollar paid as Social Security taxes:
- 85 cents goes to a trust fund that pays monthly benefits to retirees - 15 cents goes to a trust fund that pays benefits to people with disabilities
exempt assets from medicaid
- Home - Car - Personal Property - Term life insurance and whole life insurance with little or no cash value - Retirement accounts that cannot be withdrawn in a lump sum (a spouse's IRA or qualified plan will not be counted) - Real or personal property used in a business or for the production of income
permitted expenditures to spend down assets
- Paying off debts - purchase new exempt asset - home improvement - car or home repair - Pre-payment of funeral and burial expenses - Payments for services under caregiver agreements - Purchase of certain annuities
Medicaid optional benefits
- Prescription drugs - Dental services - Hospice - Preventive and rehabilitation services - Physical therapy - Chiropractic services - Personal care
services of www.ssa.gov
- Publications - forms - news, subscription newsletter - Information on retirement, disability and survivor benefits - applications
Medicaid Eligibility
- US citizen or resident alien - age 65, disabled or blind - income and asset requirements
Medicaid
- a means tested program providing assistance to poor individuals regardless of age. - provides nursing facility services, custodial care and home health care services and has no time limits on its services.
Incentives to Return to Work
- allow disabled persons to work for a period of time without reducing their benefits. - if necessary, benefits will be reinstated without an application.
Benefits for Divorced Spouses
- been married for at least 10 years - Be at least 62 years old - Be unmarried, - Not be eligible for an equal or higher benefit on his or her own Social Security record, or on someone else's Social Security record.
Reduced Benefits
- benefits are reduced 5/9 of 1% for each month of early retirement, up to a maximum of 36 months. - over 36 months at the rate of 5/12 of 1% per month to a maximum of an additional 24 months - total reduction for retiring four years early would be 25%
Full retirement
- born before 1938, age 65 - born after 1938, increases by 2 months gradually each year up to age 67 ( EX. born in 1938 full retirement 65 and 2 month, 1939 65 and 4 months, etc...)
combined income =
adjusted gross income plus 50% of his or her Social Security benefits plus any (1) tax-exempt interest, (2) foreign earned income, (3) income from U.S. possessions, (4) income from Puerto Rico by Puerto Rican residents, and (5) amounts received under an adoption assistance program of their employer.
reduction of the Social Security disability benefit if
the total benefits payable to the worker or his family exceed 80% of his prior average current earnings.
