Tuesday, November 16, 2010

2011 Medicare Info!

New Medicare Premium, Deductible and Co-Pay Charges for 2011

The basic premium for Medicare Part B will be $115.40 a month in 2011, up from $110.50 in 2010 (a 4.4 percent increase). But because there will be no cost of living benefit increase for Social Security recipients for 2011, most beneficiaries will be exempted from paying this increase and will instead pay the same $96.40 premium amount they have paid since 2008.

A "hold-harmless" provision in the Medicare law prohibits Part B premiums from rising more than that year's cost of living increase in Social Security benefits. Since there is no Social Security increase, most beneficiaries -- about 73 percent -- will not have to pay any increased Part B premiums because of the hold-harmless provision. Those covered by the provision will continue to pay Part B premiums of $96.40 per month in 2011.

But this hold-harmless protection does not apply to the other 27 percent of beneficiaries -- about 12 million in all -- who either:

•do not have their Part B premiums withheld from their Social Security checks, or
•pay a higher Part B premium surcharge based on high income (see below), or
•are newly enrolled in Part B.

All Medicare beneficiaries will be subject to the new deductibles and co-payments, as outlined below. Medicare Part B covers physician services as well as qualifying out-patient hospital care, durable medical equipment, and certain home health services, among other services.

Following are all the new Medicare figures for 2011:

•Basic Part B premium: $115.40/month
•Part B deductible: $162 (was $155)
•Part A deductible: $1,132 (was $1,100)
•Co-payment for hospital stay days 61-90: $283/day (was $275)
•Co-payment for hospital stay days 91 and beyond: $566/day (was $550)
•Skilled nursing facility co-payment, days 21-100: $141.50/day (was $137.50)

As directed by the 2003 Medicare law, higher-income beneficiaries will pay higher Part B premiums. Following are those amounts for 2011:

•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 $161.50.

•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 $230.70.

•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 $299.90.

•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 $369.10.

Rates differ for beneficiaries who are married but file a separate tax return from their spouse:

•Those with incomes between $85,000 and $129,000 will pay a monthly premium of $299.90.

•Those with incomes greater than $129,000 will pay a monthly premium of $369.10.

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 2009 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2011. 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.

If you would like more information on how I can help you with figuring out your Medicare coverage and planning for the future, contact me, attorney Gerald J. Turner, at Orsi, Arone, Rothenberg, Iannuzzi & Turner, LLP.

160 Gould Street
Suite 320
Needham, MA 02494
(781) 239-8900 (phone)
(781) 239-8909 (fax)
E-MAIL: gturner@oarlawyers.com

Monday, November 8, 2010

IRS Issues Long-Term Care Premium Deductibility

Here is another interested article that I read in one of the associations that I belong to. I thought I would share with each of you:
IRS Issues Long-Term Care Premium Deductibility Limits for 2011

Social Security benefits may be stagnant, but the IRS is increasing the amount you can deduct on your 2011 taxes as a result of buying long-term care insurance.

Premiums for "qualified" long-term care insurance policies (see explanation below) are tax deductible provided that they, along with other unreimbursed medical expenses, exceed 7.5 percent of the insured's adjusted gross income. These premiums -- what the policyholder pays the insurance company to keep the policy in force -- are deductible for the taxpayer, his or her spouse and other dependents. (If you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed 7.5 percent of your income.)

However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for 2011. Any premium amounts for the year above these limits are not considered to be a medical expense.

Attained age before the close of the taxable year Maximum deduction for year

40 or less $340

More than 40 but not more than 50 $640

More than 50 but not more than 60 $1,270

More than 60 but not more than 70 $3,390

More than 70 $4,240

What Is a "Qualified" Policy?

To be "qualified," policies issued on or after January 1, 1997, must adhere to certain requirements, among them that the policy must offer the consumer the options of "inflation" and "nonforfeiture" protection, although the consumer can choose not to purchase these features. Policies purchased before January 1, 1997, will be grandfathered and treated as "qualified" as long as they have been approved by the insurance commissioner of the state in which they are sold.