SOCIAL SECURITY, SSI, AND MEDICARE FACTS FOR 1990 The beginning of each year brings with it certain annual adjustments in Social Security programs. The changes include new tax rates, higher exempt earnings amounts, Social Security and SSI cost-of-living increases, and changes in deductible and co-insurance requirements under Medicare. Here are the new facts for 1990: FICA (Social Security) Tax Rate: The tax rate for employees and their employers during 1989 was 7.51%. The rate will be 7.65% in 1990. The maximum FICA amount to be paid by an employee during 1990 is $3,855.60, up from $3,604.80 during 1989. The increase results from a higher ceiling on earnings subject to tax, effective January 1, 1990. Self-employed persons will pay a Social Security tax of 15.3% during 1990, and their maximum Social Security contribution will be $7,711.20. Ceiling on Earnings Subject to Tax: Social Security contributions will be paid during 1990 on the first $50,400.00 of earnings for employees and self-employed persons. This compares to the 1989 ceiling of $48,000.00. Quarters of Coverage: Eligibility for retirement, survivors, and disability insurance benefits is based in large part on the number of quarters of coverage earned by an individual during periods of work. Anyone may earn up to four quarters of coverage during a single year. During 1989 a Social Security quarter of coverage was credited for earnings of $500.00 in any calendar quarter. Anyone who earned $2,000.00 for the year (regardless of when the earnings occurred during the year) was given four quarters of coverage. In 1990 a Social Security quarter of coverage will be credited for earnings of $520.00 for a calendar quarter, and four quarters can be earned with annual earnings of $2,080.00. Exempt Earnings: The earnings exemption for blind people receiving Social Security Disability Insurance (SSDI) benefits is the same as the exempt amount for individuals age 65 through 69 who receive Social Security retirement benefits. The monthly exempt amount in 1989 was $740.00 of gross earned income. During 1990 the exempt amount will be $780.00. Technically, this exemption is referred to as an amount of monthly gross earnings which does not show "substantial gainful activity." Earnings of $780.00 or more per month before taxes for a blind SSDI beneficiary in 1990 will show substantial gainful activity after subtracting any unearned (or subsidy) income and applying any deductions for impairment-related work expenses. Social Security Benefit Amounts for 1990: All Social Security benefits, including retirement, survivors, disability, and dependents benefits are increased by 4.7% beginning January, 1990. The exact dollar increase for any individual will depend upon the amount being paid. Under pressure from senior citizens, Congress has repealed the Medicare Catastrophic Coverage Act. Among other things, that Act required Medicare beneficiaries to pay additional monthly premiums. Beginning January 1, 1990, both the benefits and the premiums resulting from the Catastrophic Coverage Act are gone. Therefore, monthly Social Security checks for Medicare beneficiaries will be increased to reflect lower Medicare premiums. Beneficiaries should expect the decrease in Medicare premiums to be reflected in Social Security checks some time during 1990. A Medicare premium refund check should also be sent to each beneficiary for excess premiums withheld during 1990. Standard SSI Benefit Increase: Beginning January, 1990, the federal payment amounts for Supplemental Security Income (SSI) individuals and couples are as follows: individuals, $386.00 per month; couples, $579.00 per month. These amounts are increased from: individuals, $368.00 per month; couples, $553.00 per month. Medicare Deductibles and Co-insurance: Medicare Part A coverage provides hospital insurance to most Social Security beneficiaries. The co-insurance payment is the charge that the hospital makes to a Medicare beneficiary for any hospital stay. Medicare then pays the hospital charges above the beneficiary's co-insurance amount. The basic co-insurance amount for Medicare Part A was $560.00 for a hospital stay in 1989. There was no co-insurance amount for beneficiaries to pay for hospital stays longer than sixty days. This was one of the benefits of the Medicare Catastrophic Coverage Act, which became effective January 1, 1989. That Act has now been repealed, effective January 1, 1990. As a result, the Part A co-insurance amount for hospital stays from sixty-one through ninety days is $148.00 a day. Each Medicare beneficiary has sixty "reserve days" for hospital stays longer than ninety days. The co-insurance amount to be paid during each reserve day is $296.00. The Medicare Part B (medical insurance) deductible remains at an annual $75.00. The Medicare Part B basic monthly premium rate will be reduced from $31.90 charged to each beneficiary during 1989, to $28.60 per month during 1990. This reduction results from the repeal of the Medicare Catastrophic Coverage Act. The Part B premium is automatically deducted from Social Security checks. The monthly deduction for the first several months of 1990 will be $33.90. All beneficiaries can expect to receive a refund some time during 1990 for excess Medicare premiums paid. For anyone who pays the basic Medicare Part B premium, the refund should be the difference between $33.90 and $28.60, times the number of months of higher premium payments.