St. Petersburg Times
Print storySubscribe to the Times

Legally speaking

A Social Security and Medicare primer

Published December 23, 2003

Medicare deductibles and premiums are updated annually. The premiums for Parts A and B must cover 25 percent of estimated program costs for enrollees 65 and older. General tax dollars cover the other 75 percent of the costs.

Coverage under Medicare Part A includes the cost of a semi-private hospital room, nursing services, operating room costs, prescriptions and medical supplies, laboratory tests and X-rays provided by the hospital. The patient, however, must pay a deductible, which will be $876 in 2004.

Medicare Part A benefits cover 90 days of inpatient hospital care for each spell of illness. In 2004, there will be a $219-per-day deductible for the 61st through 90th day in the hospital for the same illness. Also, a patient is allowed a maximum of 60 lifetime reserve days, with a $438-per-day deductible.

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment and other items. In 2004, the Medicare Part B cost will be $66.60 per month. The patient receiving Medicare Part B must also pay a $100 deductible and 20 percent of the Medicare approved amount. There are many restrictions that apply to Medicare coverage for skilled nursing facility care.

Medicare never extends coverage to a patient who needs custodial care only. For each illness, Medicare Part A will pay all the costs for a skilled nursing home stay for the first 20 days, and all but $109.50 per day in 2004 for up to 80 additional days as long the individual was a patient in a hospital for three consecutive days - not including the day of discharge. The patient, however, must be admitted to the nursing facility within 30 days of discharge from the hospital.

Medigap is the term used to describe the supplemental policy needed to cover the costs not provided by Medicare. The policies are sold by private companies.

About 51-million people collect some type of monthly Social Security benefit. These benefits increase automatically each year based on the increase in the Consumer Price Index. This year's increase of 2.1 percent will cause Social Security benefits to rise by that percentage in January, and the maximum amount of earnings subject to the Social Security tax in 2004 will increase to $87,900.

Of the estimated 156-million workers who will pay Social Security taxes in 2004, about 9.2-million will pay higher taxes as a result of the increase in the taxable maximum. The percentage of the Social Security tax that will be deducted from a worker's paycheck will remain at 6.2 percent for 2004.

The percentage of the Medicare tax, which is deducted from a worker's paycheck, will remain at 1.45 percent of earnings. There is no maximum amount of earnings on which this Medicare tax is imposed.

To receive Social Security Disability Insurance (SSDI), a worker must be under 65, disabled and have obtained a status of disability insured or specially insured.

A worker meets the definition of disability insured if he or she has enough credits of coverage during a certain period before becoming disabled.

A credit is earned when a worker receives at least a minimum amount of earnings ($900 in 2004) during a quarter of a calendar year; but a worker can earn four credits for a year by earning the minimum amount of earnings for the year at any time during the year.

The worker must have credits for at least 20 quarters during the past 40-quarter period that ends with the quarter in which the disability occurred. This is known as the 20/40 rule. (A person who is disabled due to blindness is not required to meet the 20/40 rule).

The SSDI monthly payment is based on the worker's past earnings. There is usually a five-month waiting period before payments begin.

The exception to this rule relates to younger workers. For instance, a younger worker who has not worked long enough to meet the disability insured status may still be specially insured and entitled to disability benefits if he or she becomes disabled after 21 and before 31 and has credit for half the quarters from the time he or she turned 21 until becoming disabled (a minimum of six credits).

If a worker becomes disabled before 24, the worker is specially insured for disability benefits if he or she has six quarters of credit in the 12-quarter period prior to becoming disabled.

Substantial gainful activity is the ability to perform work that produces earnings. Beginning in 2004, earnings of $810 per month or more is considered substantial.

If a worker's earnings average less than $810 per month, the worker's disability benefits should continue. For a blind person, earnings of $1,350 or more will be considered substantial in 2004.

-- Gregory G. Gay is a lawyer who specializes in elder law in Pasco, Hernando and Citrus counties. Write him in care of Seniority, St. Petersburg Times, P.O. Box 1121, St. Petersburg, FL 33731.

[Last modified December 22, 2003, 10:27:47]


  • Artist says thank-you with his brush
  • Laps count, but so do smiles
  • Pool haul
  • Guardians make a difference despite reputation
  • Take an online driving safety course
  • Key to healing is more than skin deep
  • Hard decision leads to new happiness
  • A Q&A for better health

  • Column
  • Stellar speakers put first forums in fine form
  • Working our way to the Big Enchilada

  • Legally speaking
  • A Social Security and Medicare primer

  • Suddenly Senior
  • Resolve to make a difference
  • Back to Top

    © 2006 • All Rights Reserved • Tampa Bay Times
    490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111