Social Security Administration Releases Key Figures for 2011

By
January 13, 2010

Social Security Administration Releases Key Figures for 2011
The Social Security Administration (“SSA”) recently released key figures for 2011 that will affect all elderly and disabled individuals who receive program benefits, including social security benefits, supplemental security benefits, and Medicare benefits. This notice summarizes these changes and their impact on various benefits.

Social Security Retirement
As many seniors already know, there will once again be no cost-of-living adjustment (or “COLA”) to their social security benefits in 2011. Increases in social security benefits are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (“CPI-W”), which is published by the federal Bureau of Labor Statistics. If there is a percentage increase in the CPI-W when comparing the third quarter of the current year to third quarter of the previous year, there will be a corresponding percentage increase in social security benefits. The third quarter 2008 CPI-W number continues to remain greater than the third quarter 2009 and 2010 CPI-W numbers. Consequently, there is no COLA for 2011 social security benefits. COLAs for 2012 social security benefits will be based on comparing the third quarter 2011 CPI-W number against the 2008 CPI-W number.
Social Security Disability Income
Individuals receive social security disability income (“SSDI”) if they are unable to maintain “substantial gainful employment.” In making the determination of whether someone is able to maintain substantial gainful employment, the SSA will consider whether the individual can perform any “substantial gainful activity” (or “SGA”). In 2011, SGA is defined to mean $1,000 per month. This is the same monthly amount that was determined for 2010. In other words, if an individual is capable of earning more than $1,000 per month in 2011 despite any physical or mental impairments, that particular individual will not be able to receive SSDI.

Supplemental Security Income
Because there is no COLA for 2011, the base monthly supplemental security income (“SSI”) payment will remain at $674 for individuals and $1,011 for married couples. These figures can be reduced based on earned and unearned income.
Medicare
Although there is no social security benefit increase, Medicare deductibles and premiums have once again increased for 2011 in conjunction with rising health care costs. Many deductibles are offset by supplemental health insurance policies, also known as “Medigap” policies.
Deductibles for hospital coverage under Medicare Part A have been increased for 2011 as follows:

Medicare Part A
(Hospital Insurance)

2011

2010

Days 0 – 60; Patient pays:

$1,132

$1,100

Days 61 – 90; Patient pays:

$283 per day

$275 per day

Days 91 – 150; Patient pays:

$566 per day

$550 per day

If an individual has a qualifying medical stay at a hospital (which means being admitted for three nights) and requires skilled nursing or rehabilitative care from a skilled nursing facility upon discharge from the hospital, Medicare will pay the first 20 days in full. Afterwards, the patient is liable for $141.50 per day for the next 80 days and Medicare will pay the balance. This is an increase from $137.50 in 2010. After the 100 day “Medicare coverage period,” the skilled nursing facility will receive payment from the individual, long-term care insurance, or Medicaid. Many “Medigap” policies will pay the $141.50 per day patient liability for days 21 through 100. However, some “Medigap policies” do not have this coverage.
Perhaps the most confusing part of the 2011 Medicare cost increases is the monthly premium amount for Medicare Part B benefits. Medicare Part B benefits typically provide insurance for outpatient services, such as doctor visits. The 2010 minimum monthly premium for Medicare Part B coverage was $110.50. The 2011 minimum monthly premium is $115.90, a 4.4% increase. However, most Medicare Part B enrollees will not pay that monthly increase because monthly Medicare Part B premiums cannot be increased if there is no corresponding COLA with respect to social security benefits.

Individuals who will have to pay at least the $115.90 monthly premium for Medicare Part B coverage in 2011 include: (1) those who do not have the premium withheld from their monthly social security benefit; (2) those who begin to receive Medicare coverage in 2011; and (3) those who have high incomes. For individuals who have high incomes (in excess of $85,000 for single filers and $170,000 for joint filers), monthly Medicare Part B premiums for 2011 will range from $161.50 to $369.10 depending on the actual amount of income reported on 2009 income tax returns.

The Medicare Part B deductible for 2011 has been increased to $162 from $155 in 2010. After the deductible has been paid, Medicare typically covers 80% of future Medicare Part B services. Again, “Medigap” policies are designed to cover the 20% shortfall. Social Security, Supplemental Security Income, Medicare, and Medicaid benefits are complex and can be quite difficult to understand. Ruder Ware’s elder law attorneys are well-versed in these various laws and can help guide you through their complexities so you can better understand what benefits you are entitled to and how to maximize them as part of your long-term care and estate planning. If you have questions regarding the above, please contact any of the attorneys in the Trusts & Estates Practice Group of Ruder Ware.

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