Tuesday, October 20, 2015

What is Social Security & Medicare Up To for 2016

Social Security & MediCARE work together each fall to establish benefits for the upcoming year. This is federal level activity but I want to highlight some things about this since it affects a lot of people here in CT. BTW - did you know CT has the 7th oldest population in the U.S. ! !

Some points on the result of these federal agencies working together:

● Based on some special calculations Social Security determines whether individuals currently enrolled will receive a cost of living increase in their monthly benefit. Usually, but not always, this is communicated in October.

● The US Health and Human Service's Center for Medicare & MedicAID Services (CMS) Department then establishes:

+ Medicare benefits such as Hospital deductible in Part A (it's $1,2xx in 2015) and the annual upfront deductible for the Outpatient services in Part B. (its $147 in 2015)

+ The monthly cost people enrolled in Medicare Part B will pay beginning Jan 1st. To make it simple - this amount equals 25% of the cost of Part B services over the U.S. divided by the number of people who are expected to be enrolled.

This will be communicated this year in early November

Typical of government benefit programs things are often not as simple as I have highlighted. There is a provision, someplace in all the regulations, that says - OK if there is not going to be a SS cost of living increase then the amount individuals, currently enrolled in SS pay for Part B can not be increased.

This provision also has exceptions.

● People who have not yet enrolled in SS will pay a higher amount for MediCARE's Part B when they do enroll. This could be:

+ Individuals who are not yet age 65 or

+ Individuals who are waiting to enroll in SS, after first eligible for full retirement benefits (currently at age 66) so they can receive a higher monthly amount when they do enroll.

● People who filed a Single tax return and whose income is above 85k are now paying more than the standard Part B cost, currently $104.90 a month. They also have to pay more. This income amount is double for a couple. BTW there are two additional higher income step above 85k.

There will not be a SS cost of living increase for 2016 so these provisions will be affecting many people.

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