December 2, 2017

Three Reasons Why Giving Your House to Your Children Isn’t the Best Way to Protect It From Medicaid

You may be afraid of losing your home if you have to enter a nursing…

Posted in: Elder Law Answers
The announcement of the 2018 Medicare premium is good news for some beneficiaries and bad news for many others. The good news is that the standard monthly Part B premium, which about 30 percent of Medicare beneficiaries pay, will again be $134 next year, unchanged from 2017. But most Medicare recipients pay a lower premium because they have been protected from any increase in premiums when Social Security benefits remain stagnant, as has been the case for the last several years. This year, that premium has averaged $109 a month, but due to the 2 percent Social Security increase for 2018, the premiums of these formerly protected beneficiaries could rise significantly. An estimated 42 percent of these beneficiaries will pay the full monthly premium of $134 due to the increase in their Social Security benefit. The rest will pay less than $134 because the increase in their Social Security benefit will not be large enough to cover the full Part B premium increase. The average premium for these beneficiaries will jump from $109 to $130 a month, according to the Centers for Medicare and Medicaid Services (CMS). So, in other words, Medicare beneficiaries who have been protected from a premium increase in past years will see their premiums go up, while those who have been unprotected in recent years will pay the same. Beneficiaries who have been unprotected from premium rises in the past few years include those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and “dual eligibles” who receive both Medicare and Medicaid benefits. Philip Moeller, author of Get What’s Yours for Medicare, offers a handy way to figure out what your Part B change will be: “Subtract your current Part B premium from $134. Then multiply your current monthly Social Security benefit by 2 percent. Your 2018 Part B premium change should be the smaller of these two numbers.” The Part B deductible will remain at $183 in 2018, although the Part A deductible will go up by $24, to $1,340. For beneficiaries receiving skilled care in a nursing home, Medicare's coinsurance for days 21-100 will inch up from $164.50 to $167.50. Medicare coverage ends after day 100. Here are all the new Medicare payment figures: Part B premium for protected beneficiaries: Average of $130/month Part B premium for those not protected: $134 (unchanged) Part B deductible: $183 (unchanged) Part A deductible: $1,340 (was $1,316) Co-payment for hospital stay days 61-90: $335/day (was $329) Co-payment for hospital stay days 91 and beyond: $670/day (was $658) Skilled nursing facility co-payment, days 21-100: $167.50/day (was $164) So-called "Medigap" policies can cover some of these costs. Premiums for higher-income beneficiaries will remain the same in 2018 as they were in 2017: Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 will pay a monthly premium of $187.50 (unchanged). Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 will pay a monthly premium of $267.90 (unchanged). Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 will pay a monthly premium of $348.30 (unchanged). Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more will pay a monthly premium of $428.60 (unchanged). Rates differ for beneficiaries who are married but file a separate tax return from their spouse. Those with incomes greater than $85,000 will pay a monthly premium of $428.60. The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary's premiums. So the income reported on a beneficiary's 2016 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2018. Income is calculated by taking a beneficiary's adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary's MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium. You can also request to reverse a surcharge if your income changes. Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. CMS estimates that the Medicare Advantage average monthly premium will decrease by $1.91 (about 6 percent) in 2018, from an average of $31.91 in 2017 to $30 in 2018. For Medicare’s press release announcing the new premium and deductible amounts, click here. For Medicare's "Medicare costs at a glance," click here.
December 2, 2017

Medicare’s Part B Premium Will Be Unchanged in 2018, But Many Will Pay More. Got That?

The announcement of the 2018 Medicare premium is good news for some beneficiaries and bad news…

Posted in: Elder Law Answers
House Tax Plan Could Deal Blow to Families with High Medical Expenses
December 2, 2017

House Tax Plan Could Deal Blow to Families with High Medical Expenses

The tax plan put forward by the Republican-led House of Representatives would eliminate many current…

Next year, Social Security recipients will see a 2 percent raise in benefits, the largest increase in six years. For Social Security Disability Insurance (SSDI) recipients, the average monthly benefit will go up from $1,170 to $1,180, not including people who are blind, for whom the monthly rate is significantly higher. For Supplemental Security Income (SSI) beneficiaries, the average monthly benefit will rise from $735 to $750. But how does the Social Security Administration (SSA) calculate its annual cost of living adjustment (COLA)? The answer is a seemingly arbitrary measure of inflation, long criticized by advocates for the elderly and people with disabilities as unrepresentative of the spending patterns of Social Security beneficiaries. Each month, the Bureau of Labor Statistics (BLS) publishes a variety of different measures of inflation, each of which are tailored to reflect the impact of price changes on different population groups. The SSA, when calculating its annual COLA, relies on a measure of inflation known as Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Adopted by the SSA in 1975, this Index attempts to measure inflation based on the spending patterns of people living in 1) urban households, 2) for whom at least half of the household’s income comes from clerical or wage occupations, and 3) one of the household earners must have been employed for at least 37 weeks during the previous 12 months. According to the BLS, only about 28 percent of the total U.S. population falls into households that meet this criteria. As very few of these households contain individuals receiving Social Security benefits, it is unclear why the CPI-W is the SSA’s preferred measure of inflation. Many advocates contend that the CPI-W doesn't rise quickly enough to reflect the spending patterns of SSI and SSDI beneficiaries. Ironically, the BLS has constructed – but does not yet use for the COLA – a separate index for measuring inflation for the elderly that tends to record higher rates of inflation, primarily due to increased medical costs. As such, this index also would likely better reflect the economic realities for SSI and SSDI beneficiaries. The BLS, however, warns that this separate index for the elderly is currently experimental, and should be treated with caution. Despite widespread criticism of the SSA’s reliance on the CPI-W, most legislation in recent years has been focused on pushing the SSA to adopt an even stricter form of inflation measurement. The Obama Administration, in both 2013 and 2014, and numerous Republican budget proposals, including the most recent one in the House, have pushed for a new measure known as the “chained CPI.” This measure attempts to calculate how people compensate for increased costs via substitution, i.e., buying one product instead of another. Annual inflation is typically measured as between 0.25 to 0.35 percent less under this measure, according to the New Republic. The Social Security COLA went up just 0.3 percent for 2017 and not at all for 2016. Next year’s increase is primarily the result of recent boosts in energy and food prices. For more on how the SSA calculates COLAs, click here. Click here for frequently asked questions about the CPI-W.
December 2, 2017

How Does the SSA Calculate Cost of Living Increases?

Next year, Social Security recipients will see a 2 percent raise in benefits, the largest…

The amount that can be deposited in an ABLE account each year without jeopardizing public benefits will rise from the current $14,000 to $15,000 starting in 2018. The increase makes these accounts that much more attractive as a way for people with disabilities to shield gifts or income or even use as an alternative to a special needs trust in the right circumstances. The amount that can be deposited in an ABLE account is tied to the federal gift tax exclusion, which will rise from $14,000 to $15,000 in 2018 due to inflation. Created by Congress via the passage of the Achieving a Better Life Experience (ABLE) Act in 2014 and modeled after popular 529 college savings accounts, ABLE accounts allow people with disabilities and their families to save up to $100,00.00 in accounts for disability related expenses without jeopardizing their eligibility for Medicaid, Supplemental Security Income (SSI), and other government benefits. Funds in the tax-free savings accounts can be used to pay for qualifying expenses such as the costs of treating the disability or for education, housing and health care, among other things. ABLE accounts may be opened by anyone with a disability as long as the disability began before the person turned 26. Like the 529 savings plans on which they are patterned, ABLE programs are set up by the individual states, although so far most state plans are welcoming the participation of residents of any state. Twenty-nine states and the District of Columbia now have ABLE programs, according to the ABLE Resource Center.
December 2, 2017

Annual Contribution Limit for ABLE Accounts to Rise in 2018

The amount that can be deposited in an ABLE account each year without jeopardizing public…

Can Special Needs Trusts Reimburse Family Members for Travel Expenses?
December 2, 2017

Can Special Needs Trusts Reimburse Family Members for Travel Expenses?

Families of people with special needs often face unusually high travel expenses.  Medical emergencies or…

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