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November 2010 Archives

MetLife Inc. said it will halt sales of long-term-care insurance

MetLife is among the bigger sellers of the coverage, with about 600,000 policyholders, or about 8%, among the eight million who have long-term-care insurance in the U.S., according to the company and an industry trade association.  Its $36 million in sales last year were dwarfed by perennial industry leaders John Hancock Financial, at $116 million, and Genworth Financial Inc., at $108 million, according to Broker World. John Hancock recently said it would ask state regulators for an average 40% increase for about 850,000 of its 1.1 million long-term-care policyholders. Allianz SE and Minnesota Life Insurance Co., a subsidiary of Securian Financial Group Inc., are among the companies that halted sales of long-term-care insurance in the last two years. Read more about this in the Wall Street Journal William Wombacher, your Central Illinois Disability and Certified Elder Law Attorney (CELA)

2011 Part B Medicare premiums will not increase for most on Social Security

The majority of Medicare beneficiaries will not see an increase in their Part B premium because there will be no Social Security cost-of-living adjustment for 2011. They will continue to pay the same Part B premium, $96.40, which they paid in 2009 and 2010. A hold harmless provision in the Social Security Act disallows an increase in the Medicare Part B premium for qualifying Social Security recipients if their COLA is not large enough to cover the increase in the Part B premium.
Individuals who are new to Medicare in 2011 or who did not have Medicare premiums withheld from their Social Security or their Railroad Retirement checks in 2010 will pay $115.40. Individuals who pay the income-related Part B premium are not protected by the hold harmless clause. The amount of the premium they will pay depends on their modified adjusted gross income.  See the article below to determine if this effects you! 

Beginning in 2011, people who pay the income-related Part B premium will also pay an additional income-related Part D premium, known as a monthly adjustment amount. The monthly adjustment amount is not related to the premium of the plan in which such beneficiaries are enrolled.
The monthly adjustment amount will be paid directly to Medicare through withholding from Social Security checks. Beneficiaries who pay the Part D monthly adjustment amount will continue to pay their regular Part D premium to the drug plan in which they enroll. Read all about this and more at the Center for Medicare Advocacy website.
William Wombacher, your Central Illinois Disability and Certified Elder Law Attorney (CELA)

How much does the Fed government owe the SSA Trust Fund?

We all know the famous Social Security Trust Fund does not exist. Over the years Congress has spent every cent that came in and more to over their deficit spending.  They issued Treasury bills, notes and bonds to generate the cash that was not coming in from taxes and FICA. So the government created a bunch of IOU's to cover the money they spent that they didn't have. Have you ever wonder how much Congress would need to put into the Social Security Trust Fund in order to pay back with interest the money they used they spent which should have stayed in the Trust Fund. The answer according to the federal Government was 2.6 Trillion dollars. See for yourself.                             
William Wombacher, your Central Illinois Disability and Certified Elder Law Attorney (CELA)

Give back your social security check to get more money?

Hey, retirees: Looking for a way to bring in more money? Give back all the Social Security checks you have received so far.  An often-overlooked provision allows Social Security recipients to withdraw their original application for benefits and to refile. For many retirees already collecting benefits, the strategy—known informally as a "Social Security reset"—could sharply increase their monthly income. The reset strategy works because the Social Security system is wired to grow more generous the later one starts taking benefits. If you begin taking them early, meaning before your so-called full-retirement age, your benefit check shrinks by as much as 30%, depending on your year of birth. But for each year beyond full-retirement age that you still haven't claimed benefits, you earn credits of generally between 7% and 8% a year.

The strategy is particularly useful for retirees considering buying an immediate annuity, which, in return for a lump sum of cash, provides an immediate stream of monthly checks generally set up so a retiree won't outlive the money.

In most cases, "the income from resetting Social Security will greatly exceed the annuity income," says Charles Ryan, a certified financial planner in Annapolis, Md., who recently described the strategy in the Journal of Financial Planning.Determining on your own whether a reset will benefit you is a challenge because of the tax calculations and other issues. The best advice: Find a financial planner who understands this, or who has access to a computer program called ESPlanner that Mr. Kotlikoff helped design.

Learn more about this strategy in the Wall Street Journal Wombacher, your Central Illinois Disability and Certified Elder Law Attorney (CELA)

Doctors payments to be cut by Medicare on December 1

Unless Congress intervenes, payments to doctors for treating Medicare patients will be cut by 23 percent on Dec. 1 and another 6.5 percent on Jan. 1. In recent years, the payment formula has called for cuts, but each time lawmakers have stepped in to block them before they took effect or shortly afterward. In April, the Congressional Budget Office said that blocking the cuts until January 2012 would cost about $15 billion. A long-term formula fix, through 2020, would cost about $276 billion, it said.The American Medical Association is gearing up for the lame-duck congressional session scheduled to start Nov. 15. If nothing happens the tough decisions for physicians. The reality is between now and the end of December physicians have to make a decision about their status related to Medicare. Do they want to continue participating and take the cuts?

Read more about this in the Washington Post- Wombacher --- your Central Illinois Disability and Certified Elder Law Attorney

Medicare premiums can increase with an increase in income

Many retirees and their financial advisers don't realize that a perfectly reasonable investment decision can wind up costing thousands of dollars in Medicare premiums.The hit could last a year or more, but can often be avoided with proper planning. Ellen Schultz writes about this in the Wall Street Journal. Medicare Part B is medical insurance that covers doctors' services, outpatient care, physical therapy and some home health care.
Since 2007, higher-income beneficiaries have been required to pay an income-adjusted surcharge. In 2010, individuals with income of more than $85,000 a year, and couples with incomes above $170,000, pay an additional amount ranging from $44 to $243 a month per person. The maximum monthly Medicare Part B premium per person is $354 for singles with income above $214,000 and couples with income above $428,000.Medicare premiums are based on "modified adjusted gross income," which is adjusted gross income—that is, taxable income—and tax-exempt interest income. To determine the Medicare Part B premium, the Social Security Administration uses the recipient's most recent tax return. In 2010, the premiums are based on returns filed in 2009 for the 2008 tax year. Taxpayers who are planning to exercise stock options or make withdrawals from 401(k)s or other deferred-compensation retirement accounts or  re-balancing a portfolio can bump up income and thus Part B premiums. But the impact can be mitigated with proper planning, such as offsetting gains with losses.  Read about this in the Wall Street Journal. Wombacher, your Central Illinois Disability and Elder law Attorney