Q: Will my Social Security deposit increase in the New Year?
A: New Year, new income and asset thresholds! Each year the Social Security Administration determines if there will be an across the board Cost-of-Living Adjustment (COLA) in Social Security and Supplemental Security Income. For 2020, this increase will be 1.6%.
With this COLA, Medicare Part B premiums will also increase. The standard premium for 2020 will be $144.60, up from $135.50 in 2019. Keep in mind that while this is a base amount, it will be higher for some individuals with more income. The Part B deductible will also increase in 2020 to $198. The cost of premiums and deductibles will be plan-specific for Medicare Supplemental plan, Medicare Part D and Medicare Advantage members.
Also tied to the COLA is an increase in the amount of income and assets you can have in your name while being a Medicaid recipient. An individual applying for assistance through the Medicaid program can have up to $15,750 in assets, including but not limited to checking, savings, brokerage, cash value of life insurance policies, etc. Tax-deferred retirement accounts are still an exempt asset. For example, you will be eligible if you have a checking account with a $15,000 balance and a Traditional IRA with a balance of any amount as long as you are receiving distributions from this account.
Medicaid will count your total income as the gross amount of your distributions from a retirement account, Social Security, pension, interest and dividends earned on investments, and any other income you receive. If you are applying for Medicaid to assist with the long term cost of home health aides and you are over 65 years old, you can maintain $895 of your monthly income in you bank account and any additional monthly income will need to be shifted into a special type of trust called a pooled income trust where it can then be used to pay your expenses.
If you are currently a recipient of Medicaid through Managed Long Term Care or you are thinking of applying, be sure to reach out to an elder law attorney to determine what, if any, steps must be taken to protect your income and assets in the new year.
- Britt Burner, Esq. and Nancy Burner, Esq.