Editor’s Note: Journalist Philip Moeller is here to provide the answers you need on aging and retirement. His weekly column, “Ask Phil,” aims to help older Americans and their families by answering their health care and financial questions. Phil is the author of the new book, “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil.
As 2019 begins, expecting much from our gridlocked government on Medicare and Social Security seems wishful thinking. But the new year will usher in a slew of new cost and benefit levels.
The numbers change every year. I know that, like me, you have trouble keeping track because you ask me about them all the time!
The numbers I outline here are for people with original Medicare. People with private Medicare Advantage plans usually face similar charges; some plans charge lesser amounts (federal law prohibits them from charging more).
The standard monthly premium for Part B will rise to $135.50 from $134 in 2018.
There are also high-income surcharges for people filing individual and joint tax returns. They are based on what’s called Modified Adjusted Gross Income, and 2019 premiums are based on 2017.
The Part B annual deductible is up $2 to $185 in 2019.
The Part A deductible for hospital inpatient stays is rising $24 to $1,364. This is not an annual deductible but one that covers each episode of care. Normally, a new episode will be triggered once a person has been out of the hospital for 60 days.
There is zero coinsurance for stays up to 60 days and $341 a day (up from $335 in 2018) for days 61 through 90. People have up to 60 additional “lifetime reserve days” for longer stays, and the coinsurance charge is $682 a day (up from $670) for each of those days. After this coverage has been exhausted, people with original Medicare must pay all hospital costs. Again, these limits apply to individual benefit periods.
Part A also covers stays in skilled nursing facilities, with no coinsurance for the first 20 days of a benefit period. The coinsurance is $170.50 per day for days 21 to 100, up $3 from 2018. Persons with original Medicare must pay all costs for longer stays.
The Social Security COLA (cost of living adjustment) is increasing 2.8 percent. The average 2018 benefit of $1,422 a month will rise to $1,461 in 2019. This is up from 2 percent last year and is the largest adjustment since 2011.
Workers of all ages will also have to pay payroll taxes, which help fund Social Security, on more of their income this year. The government will tax earnings up to $132,900. The ceiling was $128,400 last year.
The amount that Social Security beneficiaries who are under full retirement age can earn without being penalized — known as the earnings test — is increasing to $17,640 a year ($1,470 a month), up from $17,040 ($1,420 a month). The threshold is $46,920 ($3,910 a month), up from $45,360 ($3,780 a month) in the first year an individual reaches full retirement age.
There are also thresholds for people receiving disability benefits. They cannot earn more than $1,220 a month, up from $1,180 a month for non-blind individuals or $2,040 a month, up from $1,970 a month, for blind individuals. If they do, they can lose their benefits.
Supplemental Security Income — another program that provides cash assistance to aged, blind and disabled persons who have limited income — is increasing its standard payments: $771 a month, up from $750 a month, for individuals; $1,157 a month, up from $1,125 a month, for couples.
Now, some reader questions.
Your location can affect your Medicare and Social Security decisions
Jo Lynn – Ohio: I live seven months in Ohio and five months in Florida. I have a Medicare Advantage plan and need a plan that will cover both states instead of my plan, which charges out-of-network rates for my Florida health expenses.
Phil Moeller: Some Medicare Advantage plans will provide coverage in two areas. You will need to call plans in Ohio (which I assume is your legal residence) and see if any insurers offer such a plan. It is liable to be called a PPO (preferred provider organization), but it will cost you more than your current plan.
If you can’t find one, you can drop Medicare Advantage and use original Medicare, a Part D drug plan and possibly a Medigap supplement plan (these plans may be hard to find once you’ve been on Medicare for more than six months). This will also cost you more than you’re now paying but will cover you anywhere in the country.
Ramon – Philippines: I retired last February at the age of 63 and 2 months and currently receive $659 a month in Social Security benefits. My wife will turn 62 in February of 2020 but never worked during her eight years in the U.S. How much will she get in spousal benefits if she files at 62? Also, am I required to pay for Medicare if I live outside the U.S.?
I know that $659 doesn’t sound much, but I understand that my wife is entitled to approximately 32.5 percent of my $659. If so, we can live comfortably in my province in the Philippines.
Phil Moeller: Your wife is entitled to a spousal benefit, but I’m not sure you’re aware of how much more money both of you could receive if you wait to file until you are older.
Your wife’s spousal benefit will reach its maximum if she waits to file until she reaches her full retirement age. Also, her benefit will be larger than you think, because it will be based on your FRA benefit, not on the smaller benefit you actually receive.
While you have already filed for your benefit, Social Security rules allow you to repay your benefits within a year of filing. If you were able to do this, Social Security would erase your application and you could wait up until age 70 to file. If you did so, your benefit would be much higher than it is now.
Based on your email, it appears that you were born at the end of 1954. If that’s the case your benefit at age 70 would be more than $1,000 a month, and you would receive this for the rest of your life. Here is an explanation of the delayed retirement credits you would receive if you waited.
If you waited until age 70 to file, it would be the end of 2024 and your wife would be near her full retirement age at that rime. If she filed at her full retirement age, she would receive about $375 a month in spousal benefits for the rest of her life (that’s a very rough approximation). Your joint benefit would be nearly $1,400 a month — much, much larger than you’d get under your current plan.
By maximizing your own retirement benefit, you also would guarantee that your wife would receive the highest possible survivor benefit should you die before her–which is very likely, given the difference in your ages.
I realize you did not ask me for this information, and that your financial situation might not allow you to repay the benefits you’ve already received, or to wait so long to file. But I worry that people do not know the benefits of waiting to file, so I wanted to bring these to your attention.
Also, because you will be outside the U.S. and won’t be covered by Medicare, there is no reason for you to apply or pay for it when you turn 65. Social Security may automatically enroll you in Medicare when you turn 65. If this happens, you should move quickly to cancel your Medicare and make sure Social Security does not begin withdrawing your Part B premium from your Social Security. Once these withdrawals occur, it can be a hassle to reverse them.