SSD & Medicare Changes

President Obama recently signed an agreement that will ease the large premium and deductible hikes that were set to affect Medicare Part B next year. As part of this new budget and debt-ceiling agreement, significant changes will be made to Social Security to offset the costs of Medicare, bringing an end to the “file and suspend” claiming option.

“File and suspend” allowed one spouse to file for Social Security benefits once they reached full retirement age. They could then suspend those benefits, allowing them to grow in value until they reached the age of 70. The other spouse could them file for spousal benefits while the suspended benefits continued to grow in value. This strategy for maximizing benefits has been criticized by officials who feel that it mainly benefits only affluent couples, but there is no doubt that this change will greatly limit a person’s retirement options. The government will still honor some grandfathered “file and suspend” benefits for those who will turn 62 by the end of this year.

There will also be changes to a rule called “deeming,” which says that if anyone younger than full retirement age files for a retirement or spousal benefit, they are “deemed” to be filing for all benefits they may be eligible for, and can only receive a portion of their benefits. The new budget deal will extend this rule to age 70.

As far as Medicare goes, the deal calls for a $7.5 billion loan from the Treasury in order to avoid premium hikes (a 52 percent increase) that would have affected more than 30 percent of Medicare recipients. Under the new agreement, premiums for Part B will only be raised by 15 percent for those earning below $85,000. Deductibles, however, will be increased for everyone.

The Social Security Disability Fund is Running Out!

Our country’s Social Security Disability Fund is set to run out of money in approximately one year, but the new budget deal provides for this, too. Social Security will be permitted to pay all of its claims until 2022 by shifting revenue from payroll taxes away from the larger retirement fund and into this program. Without this provision, people receiving benefits would have seen 20 percent cuts when the money ran out. In addition, the deal outlined measures for preventing fraud and adding more financial incentive for disability recipients to return to work.

Have questions about how these changes will affect your Social Security Disability options? Whether you have questions about the application process, have been denied benefits, or are seeking Supplemental Security Income (SSI), do not hesitate to call us today for assistance.

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