Social Security Direct Deposit - 5 Things You Need to Know

In this article about Social Security Direct Deposit I cover the five most asked questions.
1. Do you have to receive your payments by direct deposit?
2. When will my benefits be deposited?
3. Why not just receive a check in the mail?
4. How can I sign up for direct deposit?
5. What can I do if I don’t have a bank account and don’t want one for direct deposit of my payment?

1. Do you have to receive your payments by direct deposit?
The short answer is NO! The Social Security Administration strongly suggests everyone get their monthly payments this way. The three main reasons given for using this service are safety, convenience and speed. There is also a financial benefit to the government. It costs almost one dollar each month to send a paper check but only a few cents to send the payment electronically. At last count in January 2007, 80 percent of all Social Security and SSI beneficiaries had their payments delivered directly to their bank account. You are still able to get your payment by check, but you ought to think about the numerous benefits direct deposit provides.

2. When will my benefits be deposited?
The payments of benefits have long been fixed and are determined by the day of the month of your birth. Payments for all those receiving Social Security before May 1977 are made on the third of each month regardless of when you were born. After May 1977, the payment dates were changed and from that point on are detemined as follows. For everyone receiving benefits after April 1997 this is the schedule. If you were born on or between the 1st and 10th your payment is sent on the second Wednesday of the month. Payments for those born on or between the 11th and 20th are sent on the third Wednesday. Payments for those born on or between the 20th and 31st days of the month are sent on the fourth Wednesday.

3. Why not just receive a check in the mail?
There are some good reason to receive your payment by direct deposit. Don’t you just hate waiting in a line? I know that I do and long lines make my feet hurt.

Celebrate! No more standing in line to cash your check when it finally arrives in the mail. Your money goes immediately into your account. You do not have to get out of your house in bad weather or be concerned if you’re on holiday or away from home. You do not have to bear any more check cashing fees. Your money is in your account ready to use the day you receive your deposit.

4. How can I sign up for direct deposit?
It’s actually fairly easy to get signed up if you already have a bank account. Just go to your bank, savings and loan or credit union. They can answer your questions about direct deposit.

If you do not have an account, look into opening one and sign up for direct deposit. Nearly all banks, savings and loans and credit unions provide an assortment of accounts, some with little or no fees. Look for one that meets your needs.

5. What can I do if I don’t have a bank account and don’t want one for direct deposit of my payment?
There are several options open to people without bank accounts but the one that is promoted by the Federal government is called Direct Express. In June of 2008, the U.S. Treasury Department introduced the Direct Express Debit Mastercard card. This a direct quote from the Treasury Departments’ website at http://fms.treas.gov. [quote]People without bank accounts now have a user-friendly, practical alternative to paper checks for their monthly federal benefit payments,” said FMS Commissioner Judith Tillman. “We know that many check recipients are eager for a card-based option for their federal benefits, and we are confident the Direct Express® card will provide many Americans an important entry point to the financial mainstream.[end quote]

Check cashing and other services typically charge heavy fees and the Direct Express card puts an end to that problem. With Direct Express, there is no sign up fee and no bank account or credit check required to enroll. The U.S. Department of the Treasury and the Social Security Administration encourage you to sign up for the card and you can learn more about this here. http://www.usdirectexpress.com/edcfdtclient/index.html

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Medicare – Health Insurance For The 65 and Over Age Group

This is the last installment in a series with general information about Medicare. Other articles covering Medicare Parts B and D can be found at the website shown below in the authors’ information.

Medicare is the main insurance for people 65 and older and also provides coverage for some people with disabilities. It is the nation’s largest health insurance program - covering around 39-40 million Americans.

To be eligible you must be a citizen of the United States and meet certain requirements. Medicare is health insurance offered by the federal government to people who are older than 65 and eligible. Some younger people who have disabilities, permanent kidney failure or Lou Gehrig’s disease can also qualify. Medicare is a government insurance program that covers Americans who are 65 and older. President Lyndon B. Johnson signed the bill creating Medicare on July 30, 1965. At that time, only half of America’s elderly had any health insurance.

Medicare serves all eligible beneficiaries without regard to income or medical history. Most individuals ages 65 and over are automatically entitled to Medicare Part A (the Hospital Insurance Program) if they or their spouse are eligible for Social Security payments. Medicare then cost more than 800% over projections! This was a medical insurance plan which was intended to pay for itself but instead had become a Federal entitlement. Medicare supplemental health insurance plans can also cover your Medicare Part A deductible, extra days of hospital care, your Medicare co-payment amounts, skilled nursing and foreign travel emergency care.

Medicare is complicated — with many exceptions, provisions, rules, limitations, and so forth — making it seemingly impossible to unravel. The wise senior citizen will get assistance long before the time comes to enroll in Medicare.

Medicare HMOs cover the same doctor and hospital services as the original Medicare program, but out-of-pocket costs for these services are usually different. HMOs appeal to some people with Medicare because they may provide additional benefits, such as eyeglasses, which are not covered by the traditional Medicare program. Medicare has moved from that approach to one that rewards quality outcomes. To help achieve these improved outcomes, starting in 2009, Medicare will be rewarding prescribers who utilize an approved electronic prescribing system. Medicare covers many different types of medical costs. This includes things like durable medical equipment , doctors visits, and hospital stays.

Medicare pays for all covered expenses after the deductible for the first 60 days of hospitalization. After 60 days of a hospital stay Medicare pays for coinsurance amounts up to a total of 150 days. Medicare Part B is optional and requires a monthly premium. It covers certain medical and outpatient services, including physician care. Medicare is split into a number of parts. Most people get Medicare Part A without having to pay extra fees, and it covers some of the costs of hospitalization.

To learn more about Medicare see my other articles here on this website.

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Medicare Part B - What is it and other important information?

Second in a series of basic Medicare information, I started sort of at the end with Medicare Part D because more people were asking for information about it than parts A, B or C.  Part B is the second most searched for so here’s what I know about it.

What is Medicare Part B?
Medicare Part B is a federal health insurance program additional to Medicare Part A that helps pay for some services and products not covered by Part A, generally on an outpatient basis. This voluntary program requires a insurance premium and covers doctor and outpatient services. Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over. There are some others, under age 65, who meet other special criteria and are eligible for Part B, but this article does not cover those people. Medicare operates as a single-payer health care system.  Simply put, the American taxpayer pays the bills through the Federal government which in turn has contracts with private companies to handle the paperwork.

Medicare  is voluntary, and those who enroll in it have the premiums ($96.40 per month in 2009) deducted from their Social Security monthly payments. Part B Medicare covers charges by physicians, laboratory tests and X-rays among other non-hospital charges.  Many people with other health insurance will decline Part B Medical coverage, thinking that with the other health insurance, they may not need to pay for it. That may or may not be true. It depends on the source and type of the other health insurance. Keep in mind that if you defer signing up for Medicare Part B you may be subject to a lifetime penalty (10% per year) should you join later.

When and where do I sign up?
1. If you already get Social Security benefits - You will not need to do anything. You will be automatically enrolled in Medicare Part A and Part B effective the month you are 65. For example, if your 65th birthday is February 20, 2001, your Medicare effective date would be February 1, 2001. (Note: if your birthday is on the 1st day of any month, Medicare Part A and Part B will be effective the 1st day of the prior month. For example, if your 65th birthday is February 1, 2001, your Medicare effective date would be January 1, 2001.) Your Medicare card will be mailed to you about 3 months before your 65th birthday. If you do not want Medicare Part B, follow the instructions that come with the card. For complete information on enrollment see the Initial Enrollment Package section.

2. You want to apply for both Social Security Retirement Benefits and Medicare - If you are close to age 65 and not yet getting Social Security benefits or Medicare, you can apply for both at the same time. To make sure that your Medicare Part B coverage start date is not delayed, you should apply three months before the month you turn 65. This is the beginning of your 7 month Initial Enrollment Period. If you wait until you are 65, or in the last 3 months of your Initial Enrollment Period, your Medicare Part B coverage start date will be delayed.

To apply, you can call or visit your local Social Security office or call Social Security at 1-800-772-1213. You can apply online (using the Internet) if you meet certain rules. To apply online, visit www.socialsecurity.gov. You must answer a series of questions that will tell if you can apply online. For example, you must be at least 61 years and 9 months old; plan to start receiving Social Security retirement benefits within the next 4 months; live in the United States or one of its territories/commonwealths; agree to get your Social Security benefits by direct deposit to your bank or other financial institution. You must answer some other questions as well.

What does Medicare Part B cover?
Part B coverage includes physician and nursing services, x-rays, laboratory and diagnostic tests, influenza and pneumonia vaccinations, blood transfusions, renal dialysis, outpatient hospital procedures, limited ambulance transportation, Immunosuppressive drugs for organ transplant recipients, chemotherapy, hormonal treatments such as Lupron, and other outpatient medical treatments administered in a doctor’s office. Medication administration is covered under Part B only if it is administered by the physician during an office visit.
Part B also helps with durable medical equipment (DME), including canes, walkers, wheelchairs, and mobility scooters for those with mobility impairments. Prosthetic devices such as artificial limbs and breast prosthesis following mastectomy, as well as one pair of eyeglasses following cataract surgery, and oxygen for home use is also covered. Complex rules are used to manage the benefit, and advisories are periodically issued which describe coverage criteria.

What does Medicare Part B cost?
The monthly cost for 2009 Part B is $96.40. The amount is automatically deducted from your regular Social Security Insurance benefit each month. For 2009, higher Medicare Part B premiums apply to anyone with a modified adjusted gross income (MAGI) exceeding $85,000 for single taxpayers and $170,000 for married filing joint income tax returns.

Single Taxpayers with MAGI:
• Less than $85,000 will continue to pay 25% or $96.40 per month.
• $85,001 to $107,000 will pay 35% or $134.90
• $107,001 to $160,000 will pay 50% or $192.70.
• $160,001 to $213,000 will pay 65% or $250.50.
• Over $213,000 will pay 80% or $308.30.

Married Filing Joint Taxpayers with MAGI:
• Less than $170,000 will continue to pay 25% or $96.40 per month.
• $170,001 to $214,000 will pay 35% or $134.90.
• $214,001 to $320,000 will pay 50% or $192.70.
• $320,001 to $426,000 will pay 65% or $250.50.
• Over $426,000 will pay 80% or $308.30.

That’s all for Medicare Part B. The next article will cover Medicare Part A. I hope this helps you more than it confuses you.
Sources used for this article:
http://en.wikipedia.org/wiki/Medicare_(United_States)
http://www.hhs.gov/faq/medicaremedicaid/1668.html
http://www.cms.hhs.gov/apps/media/press/factsheet.asp?Counter=3272

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Medicare Part D - Are The 2009 Increases A Good Deal For You?

WHAT IS MEDICARE PART D? - A basic introduction to Medicare Part D Prescription Medicine Coverage

First in a series of basic Medicare information, I started sort of at the end with Medicare Part D because more people were asking for information about it than parts A, B or C.

The Medicare Part D program provides beneficiaries with assistance in paying for prescription medicine. The drug benefit expanded Medicare through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, (MMA) which began in January 2006. Different than coverage in Medicare Parts A and B, Part D coverage is not provided within the traditional Medicare program. Rather, beneficiaries must seek out and enroll in one of many hundreds of Medicare Part D programs offered by private companies.

The Annual Enrollment Period for Medicare Part D is between November 15 – December 31. During this time period folks on Medicare can enroll in a program or change their enrollment from one plan to another. Individuals  already in a plan should determine whether it will be good for them in the coming year; if they don’t select to change over they’ll stay in their current plan.

All programs will have different prices and benefits from year to year, so it is advisable for all beneficiaries to study their alternatives and make the most beneficial choice they can for the coming year.  Although coverage does not start until January each year, programs can advertise starting in October and beneficiaries can start making plan selections on November 15th.

The Standard Drug Benefit

The Medicare law sets up a standard Medicare Part D drug benefit. Programs must provide a benefit package that is at least as useful as the standard benefit. The standard benefit is outlined in terms of the benefit structure, not the specific drugs that must be covered. In 2009.  This standard benefit includes an initial $295 deductible. After satisfying the deductible, you pay 25% of the next $2,405 (25% of $2,405 = $601.25) of covered Part D prescription medicine. 

When the initial coverage limit is reached, beneficiaries are subject to an additional deductible, called the “Donut Hole,” or “Coverage Gap” in which they must pay the total costs of drugs.  The Donut hole “threshold” is equal to $2,700. Then you pay 100% of the next $3,453.75.  When your total out-of-pocket expenses  reach $4350 ($295 + $601.25 + $3,453.75 = $4,350) - including the costs of the deductible and coinsurance - beneficiaries arrive at the “Catastrophic Coverage ” benefit. 

Beneficiaries entitled to Catastrophic Coverage pay $2.40 for a generic or favored drug and $6.00 for other drugs, or a flat 5% coinsurance, whichever is larger.  Note that this out-of-pocket sum of money is calculated yearly. Beneficiaries who get to the $4,350 out-of-pocket threshold in one year must begin all over again on January 1st of the next year.

Since the deductible, initial coverage limit, and annual out-of-pocket threshold vary each year according to the changes in outlays for Medicare Part D drugs, beneficiary out-of-pocket expensess may increase yearly. The Medicare law does not require a set premium amount. These costs, as well as the list of covered drugs, change from plan to plan and from area to area.  Beneficiaries had better take time to go over the various plans available to them in view of their present and expected needs and ability to pay.  Don’t wait too long to decide on the best Medicare Part D because enrollment or plan switching ends December 31st.

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