2009 Social Security and Medicare Adjustments

Dear Savvy Senior,
Can you give me a full rundown on the Social Security and Medicare changes for 2009?
Planning Ahead

Dear Planning,
In the midst of all the financial turmoil, Uncle Sam has good news for seniors in 2009! Come January, you and over 50 million other Americans receiving Social Security benefits will get a 5.8 percent raise, the largest since 1982. However, that is not all. Medicare also recently announced that for the first time in eight years your Part B monthly premium (which covers doctor and outpatient services) would not go up next year. Here’s a rundown on what you can expect in 2009:

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SSA Adjustments
To help keep up with inflation, every year since 1975 Social Security has been giving automatic cost-of-living adjustments (COLAs). For 2009 that adjustment is a 5.8 percent increase, which is the largest in more than 25 years. The 2009 COLA is figured based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2007 through the third quarter of 2008. Here’s a run-down of some other Social Security COLA numbers that may interest you:

The 5.8 percent increase will mean that the “average” monthly Social Security check for an individual will go from $1,090 in 2008 to $1,153 in 2009 - an increase of about $63.

The average retired couple, both receiving benefits, will see their monthly check go from $1,773 to $1,876.

The maximum Social Security benefit any worker can get at full retirement age in 2009 will be $2,323 per month.

The average disabled worker’s benefit will increase $58 per month from $1,006 to $1,064.

The federal standard SSI monthly payment for an individual will go from $637 a month for an individual to $674, and from $956 to $1,011 for a couple.

The maximum amount of earnings that are subject to the Social Security tax will increase from $102,000 to $106,800.

Retirees who work and receive benefits but are under full retirement age will see their 2009 earnings limit increased to $14,160 (it was $13,560 in 2008). That limit jumps to $37,680 (up from $36,120 in 2008) the year a worker reaches full retirement age.

2009 Medicare
Your Social Security boost isn’t the only positive news. For the first time since 2000, and only the sixth time in Medicare’s history, your Part B premium will not be increased from the previous year. Your 2009 Part B premium will be $96.40 per month - the same as in 2008.
The news, however, for wealthier seniors - who make up about 5 percent of Medicare enrollees - isn’t as good. Their premiums will be increased based on their income level. Here’s how it breaks down. For individuals with incomes of $85,000 to $107,000, or married couples filing joint tax returns with incomes of $170,000 to $214,000, their Part B premium will be increased to $134.90 per month in 2009; individuals earning $107,000 to $160,000 (couples $214,000 to $320,000) will pay $192.70; individuals with incomes of $160,000 to $213,000 (couples $320,000 to $426,000) will pay $250.50; and individuals over $213,000 or couples above $426,000 will pay $308.30.
Other notable Medicare announcements you should know include your Part B deductible, which will not change in 2009. It will remain $135, which is what it has been throughout 2008. But your Part A (hospital insurance) annual deductible will go up $44 in 2009 to $1,068 for hospital stays up to 60 days. That increases to $267 per day for days 61-90 and to $534 a day for days 91-150.

Savvy Tips: For more information on the 2009 Social Security cost-of-living adjustments, call 800-772-1213 visit www.socialsecurity.gov. And for details on the 2008 Medicare changes, call 800-633-4227 or visit www.cms.hhs.gov.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit www.savvysenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.