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Medicare Prescription Drug Plan
Can I use my regional drug plan all over the country?
 Custom Search Regional drug plans will generally only cover prescriptions from pharmacies in a particular area. (Some prescriptions may be covered in other areas in an emergency.) There are national plans that cover prescriptions all over the country. Regional drug plans will generally only cover prescriptions from pharmacies in a particular area. (Some prescriptions may be covered in other areas in an emergency.) There are national plans that cover prescriptions all over the country. What do people with Medigap policies need to do to get Medicare prescription drug coverage? Like any other people with Medicare, anyone with a Medigap policy will need to join a Medicare drug plan if they want to get Medicare prescription drug coverage that meets their needs. If you have a Medigap policy that includes prescription drug coverage, and you choose to join a Medicare drug plan, you should notify your Medigap insurer. If you choose to keep your Medigap policy for your other health expenses, the insurer will remove the drug coverage from the Medigap policy, and adjust the Medigap premium. In some cases, the insurer is also required to offer you a different Medigap policy that doesn’t include prescription drugs. A person can’t have prescription drug coverage through Medigap and through a Medicare drug plan at the same time. Yes. A preferred drug list is a special list of drugs that your plan has determined are less costly and as effective as other drugs. The plan’s formulary may include preferred drugs, and you may pay less money if you use preferred drugs than other drugs on your drug plan's formulary. Is there a limit on the number of drugs a plan will cover in a given year?No. There is no limit on the amount of drugs that can be covered. However, each Medicare drug plan will have a list of the specific prescription drugs that it will cover (called a formulary), and not all plans will cover exactly the same drugs. If your doctor thinks you need a drug that is not on the plan’s list, you can ask the plan for an “exception” to its list. Plans may cover both generic and brand-name prescription drugs. These drugs must be approved by the FDA (Food and Drug Administration) as safe and effective. What does the term “extra help” mean when you are talking about Medicare prescription drug coverage? Medicare prescription drug coverage is available to everyone with Medicare, regardless of your income and resources, health status, or current prescription expenses. There is also “extra help” (also called a “low-income subsidy”) to help people with Medicare who have limited income and resources pay for Medicare prescription drug coverage. If you qualify for extra help, you will get help paying for your Medicare drug plan’s monthly premium, and for some of the costs you would normally pay for your prescriptions. The amount of extra help you get will be based on your income and resources. You can apply for extra help by calling Social Security at 1-800-772-1213 (TTY 1-800-325-0778) or visiting www.socialsecurity.gov. Is there someone to help me choose a Medicare prescription drug plan? Talk to a family member, friend, or other caregiver to help you decide what drug coverage meets your needs. You may also * Use the Medicare Prescription Drug Plan Finder on this web site, which contains detailed information about the plans available in your area. This website mentioned above is Medicare.gov
I have prescription drug coverage from my former employer. Will I be able to keep it or will Medicare prescription drug coverage replace it? Joining a Medicare drug plan is your choice. You aren’t required to join a Medicare plan, and you shouldn’t join until you are sure how it would affect your retiree coverage. In some cases, if you join a Medicare drug plan, you could lose your retiree health coverage as well as your prescription drug coverage. On the other hand, in many cases your retiree plan will work with Medicare to provide your prescription drug coverage.
For example, an employer or union might want its retirees to join a Medicare drug plan, and then the employer or union will provide additional coverage to supplement the Medicare drug plan. (This is similar to the way that employers and unions often provide health coverage to supplement Medicare doctor and hospital benefits.) Some employers and unions will make special arrangements with a particular Medicare drug plan, while others will provide coverage that supplements any Medicare drug plan their retirees choose. The total amount of drug coverage from Medicare plus this employer or union supplement may be as good as or better than the drug coverage previously provided by the employer or union alone.
Your employer (or the plan that administers your retiree drug coverage) should provide information (a creditable coverage disclosure notice) to you about how your retiree health or drug coverage will be affected if you join a Medicare plan. This information will also tell you how your retiree drug coverage compares to the new Medicare prescription drug coverage.
If your retiree drug coverage will stay the same, and the coverage is creditable coverage (it expects to pay, on average, at least as much as Medicare coverage), you can stay with your current coverage now, and you won’t have to pay a penalty if you later decide to switch to Medicare drug coverage. However, if you qualify for extra help to pay for Medicare drug coverage, it is possible that you could get better coverage if you join a Medicare drug plan.
Read the information from your retiree plan carefully. It will help you understand your options. It should also tell you how to contact the plan if you have questions. If there is no information on whom to contact, contact your benefits administrator or the office that answers questions about your coverage.
If I qualify for extra help, will my drug plan premium always be $0?
No. The amount of extra help you qualify for will be based on your income and resources, and your total premium will depend on the plan you join. Some people who qualify for extra help will have their premium paid up to a certain limit. If you qualify for this much extra help, there will be plans available in which you would pay no premium. There are other plans where you may have to pay a premium. Others who qualify for extra help will pay a discounted premium. This means if you qualify to pay a discounted premium, you will have to pay a percentage of your drug plan premium, no matter which drug plan you join. You can apply for extra help by calling Social Security at 1-800-772-1213 (TTY 1-800-325-0778) or visiting www.socialsecurity.gov.
Be sure to ask about the premium when you are comparing plans. Call 1-800-MEDICARE (1-800-633-4227), especially plans for which you pay no premium. TTY users should call 1-877-486-2048.
You can also visit our tool, the Medicare Prescription Drug Plan Finder , for a list of the Medicare drug plans available in your area. Issue Number: IR-2008-91 Inside This Issue IRS Sending Stimulus Payment Information to Retirees, Veterans Public Service Announcement: It's Not Too Late To Get Your Stimulus Payment WASHINGTON — The Internal Revenue Service today reminded qualifying retirees and veterans that it is not too late to file for an economic stimulus payment and announced it will send a second set of information packets to 5.2 million people who may be eligible but who have not yet filed for their stimulus payment. The packages will contain everything needed by a person who normally does not have a filing requirement but who must file this year in order to receive an economic stimulus payment. There will be instructions, an example Form 1040A return showing the few lines that need to be completed, and a blank Form 1040A. The packages will be mailed over a three-week period starting July 21. “All it takes is a few simple steps, and the payment can be on its way. It’s not too late to file, but the sooner people file, the faster they’ll receive their money,” said Doug Shulman, IRS Commissioner. The mailing is part of an IRS summer campaign to reach out to those people who have no requirement to file a tax return but who may be eligible for a stimulus payment of up to $300 ($600 for married filing jointly). For those eligible for a payment for themselves, there also is a $300 per child payment for eligible children younger than 17. The IRS has accounted for about 75 percent of the approximately 20 million Social Security and Veterans Affairs beneficiaries identified as being potential stimulus recipients. All but 5.2 million of those have either filed a return, filed a joint return or were not eligible for a stimulus payment (for example, they were claimed as a dependent on another’s return). To reach the remaining recipients, the IRS is working with national partners, members of Congress and state and local officials to ensure that assistance to eligible people is available.
The agency also reminded people that it has more than 400 local Taxpayer Assistance Centers operating normal business hours Monday through Friday. These centers can provide assistance to retirees and veterans trying to receive their payments. A list of addresses and office hours can be found at Contact My Local Office. The Economic Stimulus Act of 2008 provided for payments of up to $600 ($1,200 for married filing jointly) for taxpayers who normally file a tax return and have a tax liability. It provided that stimulus recipients could receive another $300 for each eligible child younger than 17. The Act also created a special category for people who had certain types of income but may not file a tax return because their income is too low or their income is nontaxable. People in this category must have at least $3,000 in qualifying income to be eligible for the minimum amount of $300 ($600 married filing jointly). Qualifying income is the total of Social Security, Veterans Affairs and/or Railroad Retirement benefits plus earned income, including nontaxable combat pay People receiving only Supplemental Security Income are not eligible. Eligible people must have a Social Security number (unless their spouse is a member of the military) and be neither a dependent nor eligible to be a dependent on another’s tax return. Receiving the stimulus payment should have no impact on other federal benefits currently being received. The stimulus payment is not taxable. Absent any other filing requirements, filing a tax return to receive a stimulus payment does not mean that retirees and others will have to start filing tax returns again. As of July 11, the IRS had issued 112.4 million payments totaling $91.8 billion. Payments are based on 2007 tax returns being filed this year. People must file by Oct. 15 in order to receive a payment in 2008. Those who do not file a tax return to obtain their stimulus payment this year may still receive their stimulus payments by filing a 2008 tax return next spring, but then their stimulus payment would be based on their 2008 qualifying income. Related Item: Stimulus Payments — It's Not Too Late Can it take longer than a couple of months for the deduction to start?
Premium deductions generally start two months after your Medicare drug plan submits the request. It can take longer if there are problems with the request. Social Security will keep track of the number of months for which premiums are due. They will withhold the total premium amount that is due the first time they make a deduction. I believe that I have signed up for automatic withholding, but I have received a notice from my plan that I still owe premiums. What should I do?
Contact your plan to verify what your record shows about your method of payment. If your Social Security premium withhold hasn't been set up already, and you still want Social Security to withhold premiums, you may need to pay the first few months of your premium directly to your plan. Your plan also can help you start to withhold premiums for the future. If there is any question about whether your premium is being withheld, your plan can check this with Medicare. You can also contact Medicare directly at 1-800-MEDICARE (1-800-633-4227) and ask them to check if your premium withhold is taking place. Remember, it generally takes two months after you enroll and choose this payment option for the premium withhold to take effect. How soon will I get a refund of any premiums that are withheld for my current plan after I enroll in a new plan? Who will the refund come from? If the Social Security Administration withheld the premium, Social Security will refund your premium. You should get this refund as an individual payment, separate from your regular monthly benefit, within eight weeks after enrolling in a new plan.
Can I change my mind about the method I use to pay my premiums? Generally, the payment plan you choose when you first enroll in a Medicare drug plan remains in effect for the rest of the calendar year, unless you leave that drug plan. However, you can work with your drug plan if you have any problems that require you to change your premium payment choice. What happens if I change plans and request automatic premium deductions from my Social Security benefits for my new plan, but the premium deduction from my previous plan doesn't stop? Social Security cannot process your request for automatic premium deduction for your new plan until the premium deduction for your previous plan is stopped. The request from your new plan will be rejected if the previous premium deduction hasn't been stopped first. Your plan will need to contact Medicare so they can find out why the new action won't take effect.
How do I pay my premiums until the automatic deduction starts? You don't have to pay your monthly Medicare drug plan premiums until the automatic premium deduction starts. When your request is processed, whatever premiums you owe will be withheld from your next Social Security benefit.
I have requested automatic premium deduction from my monthly Social Security benefit. How long will it take for the automatic deduction to start? It generally takes about two months from the time your Medicare drug plan submits the request for the premium deduction to start. This means that most of the time, the first time premiums are withheld from your Social Security benefit, two monthly premium payments will be withheld at the same time. Social Security will deduct only the cost of one monthly premium payment from your monthly Social Security benefit after that.
What happens if I have automatic premium deduction from my Social Security benefit and I switch to a different Medicare drug plan later? Will the automatic premium deduction carry over to my new drug plan?
No. When you enroll in your new Medicare drug plan, you will need to make a new choice about how to pay your premiums. You can again choose automatic premium deduction from your Social Security benefit. Premium deductions generally start two months after your drug plan submits the request. This means that the first time the premiums are withheld from your Social Security benefit, two monthly premium payments will be withheld. After the first time, only one monthly premium payment will be withheld from your monthly Social Security benefit. Where should I call if I have other questions about options for paying my Medicare drug plan premiums, or about withholding premiums from my Social Security payment? If you have any other questions about these issues, contact your Medicare drug plan. Their customer service number is printed on your membership card. Issue Number: IR-2008-082 Inside This Issue IRS Increases Mileage Rates through Dec. 31, 2008 WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70. In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. "Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said IRS Commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers." While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs. The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile. The new rates are contained in Announcement 2008-63 on the optional standard mileage rates. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Mileage Rate Changes Purpose Rates 1/1 through 6/30/08 Rates 7/1 through 12/31/08 Business 50.5 58.5 Medical/Moving 19 27 Charitable 14 14 What if my monthly Social Security benefit isn't enough to cover multiple premiums at one time?
If your monthly Social Security benefit isn't enough to cover multiple premium payments at one time, the premiums won't be deducted. Your plan will bill you directly and you can pay them directly. You also can arrange with your plan for the premiums to be automatically withdrawn from your checking or saving bank account. I am eligible for the "extra help" with prescription drug costs or limited-income subsidy, but my plan is billing me for a premium. What should I do?
Contact your plan. The plan can check and make sure that your record correctly shows you should get extra help. Some people with incomes over a certain amount still pay reduced premiums. In these cases, you must apply for the extra help (it isn't automatic) and Medicare can help you enroll in a plan that works for you. Call 1-800-MEDICARE (1-800-633-4227) or visit the Medicare Prescription Drug Plan Finder on this website for more information about extra help with your prescription drug costs. I will be switching to a different Medicare drug plan. What do I need to do to stop the automatic premium deduction from my current Medicare drug plan?
You don't need to do anything. Your enrollment in a new plan will automatically stop the premium deduction from your current drug plan. It generally takes one to two months before the premium is no longer being withheld. I will be switching to a different Medicare drug plan. What do I need to do to stop the automatic premium deduction from my current Medicare drug plan?
You don't need to do anything. Your enrollment in a new plan will automatically stop the premium deduction from your current drug plan. It generally takes one to two months before the premium is no longer being withheld. What options do I have for paying my Medicare drug plan premiums?
You have three main options for paying your Medicare drug plan premiums: 1. Automatic electronic monthly withdrawal from your checking or savings bank account; 2. Receive a direct monthly bill from the plan; or 3. Automatic deduction from your monthly Social Security benefit. Creditable vs. Non-creditable Employer Retiree Drug Coverage If your current employer/union coverage is expected to pay, on average, at least as much as the standard Medicare drug coverage (this is called creditable): You can keep it as long as it is still offered. AND
You won't have to pay a penalty if you drop or lose your coverage. If you involuntarily lose the coverage, you must join a Medicare drug plan with an effective date that is within 60 days of the coverage end date. If you chose to drop the coverage, you must join a Medicare drug plan within 3 months of dropping the coverage. However, if you do not enroll in a Medicare drug plan and have a period of 63 days or longer without coverage that is creditable (it expects to pay at least as much as Medicare's coverage), you may have to pay a penalty when you do enroll. Keep a copy of the notice that says you have creditable coverage. If you join a Medicare drug plan after you are first eligible, you'll need to provide this as proof. Your plan may contact you for additional information. They will determine whether you have had continuous creditable drug coverage and send this information to Medicare. If your current employer/union coverage is not expected to pay, on average, at least as much as the standard Medicare drug coverage (non-creditable), you may be able to:
Keep your current employer/union drug plan and join a Medicare drug plan that gives you more complete coverage. Keep only your current employer/union drug plan. If you join a Medicare drug plan after you are first eligible, you'll have to pay a penalty. Drop your current coverage and join a Medicare drug plan or a Medicare Advantage drug plan. If you drop your employer/union coverage, you may not be able to get it back. You may not be able to drop your employer/union drug coverage without also dropping your employer/union health coverage. In some cases, employers or unions have rules that say you cannot have both a Medicare drug plan and your employer/union plan. Your current coverage may end for you and your dependents. You should talk to your employer/union and/or the benefits administrator about all of your options. If you are covered under COBRA, you should check with your former employer/union or the benefits administrator to see if the coverage is creditable. Workers' compensation, discount drug card programs, and manufacturer patient assistance programs (PAPs) are not considered creditable coverage. If you didn't receive a creditable coverage notice:You must request in writing a copy of the creditable coverage notice from your employer/union. You must send it by certified/registered mail. Keep a copy of your letter for your records. For additional information, please read the publication, Quick Facts about Medicare’s New Coverage for Prescription Drugs for People who have Coverage from an Employer or Union. How will my retail pharmacy discount work with with my Medicare drug coverage? If you enroll in a Medicare drug plan, you will have access to a long list of prescription drugs at discounted prices, but you can still benefit from retail pharmacy programs (e.g., Wal-Mart, Target, K-Mart and other retail programs that cover selected generic drugs for $4, etc.). For example, if you have a Medicare drug plan that charges 25% coinsurance and you use the Wal-Mart pharmacy, you will have to pay only $1 (or 25% of $4) for the generic drugs covered by the Wal-Mart program. You will pay $4 for these medications if you are meeting a deductible or are in the coverage gap (in most cases). It is important to realize that these retail pharmacy programs do not cover all generic drugs nor do they typically cover any brand-name drugs, many of which do not have generic versions available. In addition, while you have the choice of getting your drugs at a number of pharmacies or by mail-order under the Medicare drug coverage, the retail pharmacy programs generally apply only to covered generics purchased at the retail pharmacy (and not available through your Medicare drug plan's mail-order option). Enrolling in a Medicare drug plan will give you access to a larger list of prescription drugs at discounted prices in case you need a prescription drug that is not on a limited list of specially discounted generic drugs offered by a retail pharmacy. You will still benefit from discounts for selected generic drugs purchased at these retail pharmacies offering these special prices, but you will have broader coverage as well. How will my employer retiree drug coverage work with my Medicare prescription drug coverage?
Your current or former employer or union should have provided information to you that lets you know how your current coverage compares to the standard Medicare drug coverage (a creditable coverage disclosure notice). This information is important because it can affect the decision you need to make about joining a Medicare drug plan. Do not make any decisions until you have reviewed this information. If you did not receive information from your employer or union, you should contact the employer/union or the benefits administrator for your current coverage. Your current or former employer or union must send you this information: 1. before November 15th of each year. 2. before your Initial Enrollment Period for Medicare. 3. if you already have Medicare and you join an employer or union plan. 4. if your employer or union terminates (ends) the drug coverage they offer. 5. if your employer or union drug coverage changes so that it is no longer as good as, or becomes as good as, the standard Medicare prescription drug coverage. 6. whenever you request it. Retiree Drug Subsidy Medicare is offering help to employers and unions to encourage them to keep providing high quality prescription drug coverage. If your employer or union is claiming you for the retiree drug subsidy, you should first talk to your benefits administrator before making any changes to your current coverage. If you try to join a Medicare drug plan, your benefits administrator and/or the Medicare drug plan may contact you to confirm your choice. You may not be able to have both Medicare drug coverage and employer/retiree drug coverage if your employer is claiming you for the retiree drug subsidy. Your employer is responsible for telling you how their coverage works with Medicare. How will my VA health benefits work with my Medicare prescription drug coverage?
If you get VA health benefits, your coverage will not change. If you decide that VA drug coverage meets your needs, you can choose not to join a Medicare drug plan. You can keep your current coverage. It will almost always be to your advantage to keep your current coverage without making any changes. An exception is if you qualify for Medicare's extra help. You may benefit by applying for the extra help. VA prescription drug coverage is considered creditable drug coverage, which means it expects to pay, on average, at least as much as Medicare drug coverage. If you decide you want to join a Medicare drug plan after you are first eligible, you won't have to pay a late enrollment penalty if you join within 63 days of involuntarily losing your VA coverage. If you don't lose your coverage and you want to join a Medicare drug plan, you must wait for a valid enrollment period. You will not have to pay a late enrollment penalty. If you have VA coverage and you choose to disenroll from your Medicare drug plan, you get a special enrollment period to do so. You should contact your local VA facility before making any changes to your drug coverage. ADDITIONAL INFORMATIONBased on your prescription drug needs, you may choose to have both VA and Medicare drug coverage. If you are thinking about joining a Medicare drug plan and you have VA benefits, you should consider: Where you live: You may benefit from Medicare drug coverage if you are in a nursing home that does not let you use your current VA drug benefits. You may also want Medicare drug coverage if you live far from a VA facility. Where you want to fill your prescriptions: In most cases, with VA drug coverage, you must get your drugs from a VA pharmacy in person or by mail. If you'd rather get your prescriptions from local retail pharmacies, you may want to consider a Medicare drug plan. For additional information, please contact the VA Health Benefits Service Center at 1-877-222-8387. TTY users should call 1-800-829-4833. How will my VA health benefits work with my Medicare prescription drug coverage? If you get VA health benefits, your coverage will not change. If you decide that VA drug coverage meets your needs, you can choose not to join a Medicare drug plan. You can keep your current coverage. It will almost always be to your advantage to keep your current coverage without making any changes. An exception is if you qualify for Medicare's extra help. You may benefit by applying for the extra help. VA prescription drug coverage is considered creditable drug coverage, which means it expects to pay, on average, at least as much as Medicare drug coverage. If you decide you want to join a Medicare drug plan after you are first eligible, you won't have to pay a late enrollment penalty if you join within 63 days of involuntarily losing your VA coverage. If you don't lose your coverage and you want to join a Medicare drug plan, you must wait for a valid enrollment period. You will not have to pay a late enrollment penalty. If you have VA coverage and you choose to disenroll from your Medicare drug plan, you get a special enrollment period to do so. You should contact your local VA facility before making any changes to your drug coverage. ADDITIONAL INFORMATIONBased on your prescription drug needs, you may choose to have both VA and Medicare drug coverage. If you are thinking about joining a Medicare drug plan and you have VA benefits, you should consider: Where you live: You may benefit from Medicare drug coverage if you are in a nursing home that does not let you use your current VA drug benefits. You may also want Medicare drug coverage if you live far from a VA facility. Where you want to fill your prescriptions: In most cases, with VA drug coverage, you must get your drugs from a VA pharmacy in person or by mail. If you'd rather get your prescriptions from local retail pharmacies, you may want to consider a Medicare drug plan. For additional information, please contact the VA Health Benefits Service Center at 1-877-222-8387. TTY users should call 1-800-829-4833. I'll be 65 years old soon. When should I sign up for Medicare? Generally, we advise people to file for Medicare benefits 3 months before age 65. Remember, Medicare benefits can begin no earlier than age 65. If you are already receiving Social Security, you will automatically be enrolled in Medicare Parts A and B without an additional application. However, because you must pay a premium for Part B coverage, you have the option of turning it down. You will receive a Medicare card about two months before age 65. If you would like to file for Medicare only, you can apply by calling 1-800-772-1213. Our representatives there can make an appointment for you at any convenient Social Security office and advise you what to bring with you. When you apply for Medicare, we often also take an application for monthly benefits. You can apply for retirement benefits online. How will my other prescription drug assistance program work with my Medicare prescription drug coverage? Non-Medicare Drug Discount Card You may use a discount card or other pharmacy discount during your deductible period or while in the coverage gap. In some cases, a network pharmacy may accept a discount card or offer another cash price discount so that you can pay less for a prescription than your plan's negotiated price. This is considered a one-time "lower cash" or special price. If you are able to obtain a cash discount to pay an amount that's lower than your plan's price, you will need to send your receipt to your Medicare drug plan. This ensures that your plan will count the amount you paid towards your out-of-pocket costs. Example (One-time "lower cash" or special price)You are in the coverage gap, so you have to pay for the total amount of your prescription. The plan usually charges $100 (its negotiated price) for the drug you need. By using a discount card, you could get that drug for $95. If you use your Medicare drug plan card, you will pay $100. If you don't use your Medicare drug plan card and use the pharmacy's savings card, you will pay $95. You can take advantage of the lower price, and send your receipt to your drug plan. Your plan will count the $95 toward your total out-of-pocket costs and total drug spending under the plan. Patient Assistance Program (PAP)Payments made by your Patient Assistance Program (PAP) may or may not count towards your true out-of-pocket costs (TROOP). You should check with your PAP to see how it will work with a Medicare prescription drug plan. If your PAP is ending, Medicare did not force the program to end. However, Medicare cannot require a PAP to continue coverage if they choose not to do so. Supplemental Health Insurance (not Medigap)You should check with your Supplemental Health Insurance Plan to see how it will compare to Medicare drug coverage. What are the requirements to receive Medicare benefits? There are many ways to qualify for Medicare. There are two parts of Medicare, each of which has its own requirements:Hospital Insurance (also known as Part A)If You Are 65 or Older Most people 65 or older are eligible for Medicare hospital insurance (Part A) based on their own—or their spouse's— employment. You are eligible at 65 if you: * receive Social Security or railroad retirement benefits; * are not getting Social Security or railroad retirement benefits, but you have worked long enough to be eligible for them; * would be entitled to Social Security benefits based on your spouse's (or divorced spouse's) work record, and that spouse is at least 62 (your spouse does not have to apply for benefits in order for you to be eligible based on your spouse's work) ;or * worked long enough in a federal, state, or local government job to be insured for Medicare. If You Are Under 65 Before age 65, you are eligible for Medicare hospital insurance if you: * get Social Security disability benefits and have amyotrophic lateral sclerosis (Lou Gehrig's) disease; or * have been a Social Security disability beneficiary for 24 months; or * have worked long enough in a federal, state, or local government job and you meet the requirements of the Social Security disability program. If you receive a disability annuity from the Railroad Retirement Board, you will be eligible for hospital insurance after a waiting period. (Contact your railroad retirement office for details.) Eligibility For Family Members Under certain conditions, your spouse, divorced spouse, widow or widower, or a dependent parent may be eligible for hospital insurance when he or she turns 65, based on your work record. Also, disabled widows and widowers under age 65, disabled divorced widows and widowers under 65, and disabled children may be eligible for Medicare, usually after a 24-month qualifying period. (For disabled widows/widowers, previous months of eligibility for Supplemental Security Income (SSI) based on disability may count toward the qualifying period.) If You Have Kidney Failure There are special rules for people with permanent kidney failure. Under these rules, you are eligible for hospital insurance at any age if you receive maintenance dialysis or a kidney transplant and: * you are insured or are getting monthly benefits under Social Security or the railroad retirement system; or * you have worked long enough in government to be insured for Medicare. In addition, your spouse or child may be eligible, based on your work record, if she or he receives continuing dialysis for permanent kidney failure or had a kidney transplant, even if no one else in the family is getting Medicare. If You Do Not Qualify Under These Rules Certain aged people who do not qualify for Medicare hospital insurance under these rules may be able to get it by paying a monthly premium. They must also always enroll in medical insurance (Part B) to get this coverage. Certain disabled people who lost premium-free hospital insurance due to work can get Medicare hospital insurance again by paying a premium.Medicare Medical Insurance (also known as Part B) Almost anyone who is 65 or older or who is under 65 but eligible for hospital insurance can enroll for Medicare medical insurance by paying a monthly premium. Aged people don't need any Social Security or government work credits for this part of Medicare. What are the tax, benefit and earning (COLA) amounts for 2008? A Social Security cost-of-living (COLA) increase of 2.3% for 2008 was announced on October 17, 2007. Following are the changes effective January 1, 2008: 2008 SOCIAL SECURITY CHANGES Cost-of-Living Adjustment (COLA): Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2006 through the third quarter of 2007, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 2.3 percent COLA for 2008. Will Social Security beneficiaries receive a payment from the economic stimulus package approved by Congress? Starting April 28, the Treasury began sending economic stimulus payments to more than 130 million households. To find out if you are eligible for a stimulus payment or if you have other questions about the stimulus bill, please go to the IRS website at www.irs.gov. The IRS website has the best and most up-to-date information to answer your questions about the stimulus payment. If you prefer, you may call IRS on their toll-free number at 1-800-829-1040. Social Security beneficiaries, who are filing a 2007 tax return only to obtain the stimulus payment, will not need a replacement Form 1099 for IRS to determine if they are eligible to receive a stimulus payment. An estimate of Social Security benefits received in 2007 is sufficient. Can I appeal Social Security's decision about the money I owe for the income-related Medicare Part B premium? If so, how? Yes, you can appeal the decision. You can call us at 1-800-772-1213 and we will send you a form SSA-561-U2 (Request for Reconsideration). When you call, we will tell you what proofs you should submit with your appeal request. If you need help completing the form, you may schedule an appointment with your local office by calling 1-800-772-1213. If you are deaf or hard of hearing you can call our TTY number, 1-800-325-0778. If I owe a Part B income-related adjustment for 2007, can I pay the amount owed by installments? Yes, anyone who owes money on their Part B premium and states he or she cannot pay it in a lump sum can pay by installments. If you wish to pay by installments, please call us toll-free at 1-800-772-1213 or your local Social Security office. If you are deaf or hard of hearing, you can call our TTY number, 1-800-325-0778. Social Security told me that the amount of my income-related Medicare Part B premium is lower and I'm due a refund. When will I get the refund? If you got a letter that said you would be getting a refund, you should have received your refund by mid to late November. If you did not receive your refund by the end of November, please call us toll-free at 1-800-772-1213 or your local Social Security office. If you are deaf or hard of hearing you can call our TTY number, 1-800-325-0778. I don't agree with the tax information the Internal Revenue Service (IRS) gave Social Security to calculate my Medicare Part B income-related premium. Can I just bring in a copy of my tax return? If you don't agree with the tax information that the Internal Revenue Service (IRS) gave us, you will need to provide proof that you have more accurate information. More accurate information is: your amended tax return, along with a letter from IRS accepting your amended return or an IRS transcript; a letter or statement from IRS that they have corrected your tax information and that describes what the correction was; your copy of your tax return which shows an obvious IRS transcription error in tax-exempt interest income; or your attestation under penalty of perjury that you lived apart from your spouse for the entire year when you filed your income tax return as Married Filing Separately. My income has gone down. I don't have to pay a Part B income-related adjustment in 2008, but I owe an income-related adjustment for 2007. I can't afford to pay the money back. Can you waive what I owe? You may request a waiver of a Part B income-related adjustment if payment of the premiums would create severe financial hardship. If you wish to request a waiver, please call us toll-free at 1-800-772-1213 or your local Social Security office. If you are deaf or hard of hearing, you can call our TTY number, 1-800-325-0778. I received a notice in November 2007 telling me I must pay a higher Medicare Part B premium for 2007 based on my 2005 income. However, I got divorced in November 2007 and my income has decreased. It is now February 2008. What can I do? We can make a new initial determination of your 2007 Medicare Part B premium. Ordinarily, we will not make a new initial determination for a prior year. There is one exception; if any "life-changing" event causing the reduction in modified adjusted gross income occurs in the last three months of the calendar year and the request for a new initial determination is received by March 31st of the following year, we can make a new initial determination. You will need to request a new initial determination and provide proof of the divorce (or other life-changing event) and tax information for 2007. Life changing events include the following: Death of spouse Marriage Divorce or annulment Work reduction Work stoppage Reduction in income due to loss of income-producing property Reduction in or loss of certain forms of pension income If you wish to report a life changing event, please call us toll-free at 1-800-772-1213 or your local Social Security office. If you are deaf or hard of hearing, you can call our TTY number, 1-800-325-0778. Contacting Social Security For more information, visit our website at www.socialsecurity.gov/mediinfo.htm or call toll-free, 1-800-772-1213 (TTY 1-800-325-0778). Why did I receive another letter about my Medicare Part B premium for this year? You received another letter about your Medicare Part B premium for this year because the amount of your Medicare Part B premium for this year changed. Although Social Security usually uses two-year-old Internal Revenue Service (IRS) modified adjusted gross income (MAGI) data to decide if you must pay an income-related adjustment, sometimes we must use three-year-old data. Other times we may base our decision on tax information you have provided. Each fall, when we ask IRS for information to determine the next year's Part B premium, we ask IRS for tax information to verify beneficiary reports. We also ask for two-year-old IRS MAGI if we have temporarily used three-year-old MAGI. When we find a difference between IRS information and information previously used and it results in a change in your Part B premium, we notify you of the change. To protect identity, the Social Security Administration advises us to not carry our Social Security card. But, Medicare cards must be carried to obtain medical services and they display the full Social Security number. What is being done to prevent the theft of SSNs from Medicare cards? The potential for misuse of SSNs which could result from the need for Medicare recipients to carry their Medicare cards with them is a valid concern. The Centers for Medicare & Medicaid Services (CMS) is the federal agency responsible for the Medicare program. Since CMS has jurisdiction over the format of Medicare cards, you may wish to refer your inquiry to that agency that Agency for consideration: Centers for Medicare & Medicaid Services7500 Security BoulevardBaltimore, Maryland 21244-1850 Starting in May, most Social Security beneficiaries will get an economic stimulus payment as part of the Economic Stimulus Act of 2008 (Public Law 110-185). These stimulus payments will be as much as $600 per adult and $300 for each minor child in the household. Will the stimulus payments count as income in determining whether I'm eligible for extra help with my Medicare Prescription Drug plan? Will they count as resources? Income Consideration: No, any tax rebate or refund, including the stimulus payments, will not be counted as income. Resource Consideration: When we decide if you are eligible for extra help, your stimulus payment will not be counted as a resource for the month you get it and the following 2 months. By resources, we're talking about such things as money in bank accounts, investments and cash you have at home or elsewhere. To understand when we would count your stimulus payment as a resource, consider the following example. If you get a stimulus payment in May 2008, and decide to keep it or invest it, it would not count as a resource for May, June, or July 2008. Beginning in August 2008, your stimulus payment would count as a resource if you had not spent the money before then.
Can I ask for a new decision about my Income-Related Part B premium? You can request a new decision and ask that we use more recent tax return information if: We used three year old tax data to determine your current premium and you have a signed copy of your tax return from two years ago; We used three year old tax data to determine your current premium and you sign a statement indicating that you were not required to file a tax return two years ago; One of the following happened and the change will make a difference in the income level we consider: You married; You divorced or your marriage was annulled; You became a widow/widower; You or your spouse stopped working or reduced work hours; You or your spouse lost income from income-producing property due to a disaster or other event beyond your control; or Your or your spouse’s benefits from an insured pension plan stopped or were reduced Once you show us evidence of the event and provide proof or an estimate of your reduced income, we will update our records and correct your Part B premiums back to the earliest time in the year you had Part B. You can request a new decision and ask that we use more accurate tax return information if: You amended your tax return for the year we used to determine your premium and it changes the income we count; You provide proof from IRS of an error in the tax return information we used to make our decision; or Your tax filing status for the year we used to determine your premium was “married filing separately” and you did not live with your spouse at any time during that year. For more information, see Social Security's publication, Medicare Part B Premiums: New Rules For Beneficiaries With Higher Incomes, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. To learn more about Medicare Part B coverage, visit www.medicare.gov. If someone completes an Application for Help with Medicare Prescription Drug Plan Costs for me, must I sign the application before it can be processed? No. If you have authorized someone to complete and sign your application, this individual is your personal representative, so you do not have to sign the application. In talking with my son, I found out that he submitted incorrect information about my resources when he completed and mailed my Application for Help with Medicare Prescription Drug Plan Costs. Can I change my application now to show the correct amount? You can call 1-800-772-1213 and let us know or contact your local Social Security office. Data on your application will be matched with data from other federal agencies. If there is a discrepancy that requires verification, we will contact you. How is Modified Adjusted Gross Income (MAGI) calculated? Generally, Modified Adjusted Gross Income (MAGI) is the sum of your adjusted gross income plus any tax exempt interest income you may have. Some examples of income are: wages, salaries, tips, taxable interest, certain dividends, business income, capital gains, and unemployment compensation, as well as annuities, Social Security benefits and some pensions. For more information, visit our website at www.socialsecurity.gov/mediinfo.htm, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security Will a one-time increase in my income due to property sales or capital gains be considered when you determine my Income-Related Part B premium? We generally consider your income from property sales or capital gains to determine your premium. To determine your Part B premium, we use the most recent tax information provided by the Internal Revenue Service (IRS). In most cases, this information is for two years prior to the year in question. For example, we generally would have used your 2006 tax return information for your 2008 premium. We use your modified adjusted gross income (MAGI) from your tax return to make this determination. Your MAGI is a combination of your adjusted gross income and tax exempt interest income. For more information, see Social Security's publication, Medicare Part B Premiums: New Rules For Beneficiaries With Higher Incomes, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. To learn more about Medicare Part B coverage, visit www.medicare.gov. What is the Internal Revenue Services (IRS) Form 8821 and when do I need to complete one? IRS Form 8821, "Tax Information Authorization," authorizes the disclosure of your tax information. If you disagree with the decision Social Security made on your request for reconsideration about your Medicare Part B income-related premium, you can ask for a hearing before an Administrative Law Judge (ALJ) of the Department of Health and Human Services (HHS). Social Security needs to redisclose your tax information to the ALJ for your hearing. In order for Social Security to do so, you need to complete and sign IRS Form 8821, "Tax Information Authorization," granting us authority to disclose this information to the ALJ. You can find the form and guidance on how to complete it at www.socialsecurity.gov/online/irs-8821.pdf. IRS Form 8821, "Tax Information Authorization," is not a request for a hearing. You also need to request a hearing in writing by completing a "Request for Hearing by Administrative Law Judge" (HA-501-U5). You can find the request for a hearing online at www.socialsecurity.gov/online/ha-501.pdf or request a copy through our toll-free number 1-800-772-1213 (TTY 1-800-325-0778), or you can contact your local Social Security office to file your hearing. To file a hearing you will need to complete both forms, "Tax Information Authorization" (IRS Form 8821) and "Request for Hearing by Administrative Law Judge " (HA-501-U5). For more information, visit our website at www.socialsecurity.gov/mediinfo.htm, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. What are the relevant sections of the law and regulations that govern how Social Security determines my income-related Part B premium? The relevant sections of the law and regulations governing how Social Security determines your income-related Part B premium are: Section 1839(i) of the Social Security Act; Social Security Administration regulations, 20 CFR Part 418 Subpart B; and Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS) regulations, 42 CFR Part 408.20 - 408.27. For more information, visit our website at www.socialsecurity.gov/mediinfo.htm, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. What if my income has gone down because I got married, divorced or my spouse died? If your income has gone down due to any of these circumstances and the change will make a difference in the income level we consider, contact us as soon as possible to explain that you have new information and want a new decision about your Income-Related Part B premium. You will need to show us evidence of the event and provide proof or an estimate of your reduced income. Evidence of the event could be an original or certified marriage certificate, death certificate or divorce decree. For example, proof of a change in your 2007 income could be a copy of your return for tax year 2007 or an estimate if you have not yet filed your 2007 taxes. If your income will not change until the following year, you can give us an estimate of what you think your income will be. I understand that Social Security may call Medicare beneficiaries to obtain additional information needed to process the Application for Extra Help with Prescription Drug Costs. How can beneficiaries know if a call is legitimately from SSA and not part of a scam? Social Security may call if some questions on the application were not answered or if we cannot read the answer. We may also call to resolve discrepancies between answers on the application and information we receive from other Federal agencies about the applicant's income or resources. When a Social Security employee calls for more information, he or she should never ask you for bank account numbers, credit card numbers or life insurance policy numbers. In most cases, a Social Security employee will not ask for a Social Security Number. The only time we will do so is if the number on the application is invalid and we need to know the correct number. If a person who receives a call from someone claiming to be a Social Security employee is at all suspicious, he or she should hang up and call Social Security back at 1-800-772-1213 to confirm that the call is legitimate. Which tax year will you use to determine my Income-Related Part B premium? To determine your Part B premium, we use the most recent tax return information provided by the Internal Revenue Service (IRS). In most cases, this information is for two years prior to the year for which you must pay an income-related premium. For example, we usually used your 2005 tax return information for your 2007 premium. For 2008, we generally would use your 2006 tax return information. To report the change, you can use Form SSA-44, Medicare Part B Income-Related Premium - Life-Changing Event. For more information, see Social Security's publication, Medicare Part B Premiums: New Rules For Beneficiaries With Higher Incomes, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. If I apply and am approved for extra help with prescription drug costs and I decide I do not want the Medicare prescription drug program, what should I do? You should contact the Centers for Medicare & Medicaid Services (CMS) and inform them that you do not want to participate in the prescription drug program. CMS will advise you on how to opt out of the program. You can contact CMS by calling 1-800-633-4227. Will the income limits used to determine the amount of my Medicare Part B premium be indexed for inflation in future years? Yes. By law, the income limits used to determine the amount of your Medicare Part B premium must be adjusted yearly based on the Consumer Price Index. This indexing will begin in 2008. For more information about Medicare Part B premiums, visit our website at www.socialsecurity.gov/mediinfo.htm, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. For the current income limits used to determine the amount of your Medicare Part B premium, see "What is the "Part B" Medicare monthly premium?" To learn more about Medicare Part B coverage, visit www.medicare.gov. What type of documents do I need to submit when I apply for the extra help with prescription drug costs? You do not have to send any documents with the application. We will call you or write to you if we need additional information. What if my income has gone down because I retired, stopped working or my insured pension plan went down? If your income has gone down because you or your spouse retired, stopped working or reduced your work hours, or your insured pension plan stopped or went down, and the change will make a difference in the income level we consider, contact us as soon as possible. Tell us you have new information and want a new decision about your Income-Related Part B premium. You will need to show us evidence of the event and provide proof or an estimate of your reduced income. Evidence of the event could be a letter from your employer about your retirement or something similar. Proof of the change in your income could be a copy of your return for that tax year or an estimate if you have not yet filed your taxes for that year. If your income will not change until the following year, you can give us an estimate of what you think your income will be. To report the change, you can use Form SSA-44, Medicare Part B Income-Related Premium - Life-Changing Event. For more information, see Social Security's publication, Medicare Part B Premiums: New Rules For Beneficiaries With Higher Incomes, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. To learn more about Medicare Part B coverage, visit www.medicare.gov. The trustees, issuing a once-a-year analysis of the government's two biggest benefit programs, said the resources in the Social Security trust fund will be depleted by 2041. The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped out by 2019. Both those dates were the same as in last year's report. But the trustees warned that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes. For Medicare, that threshhold is projected to be reached this year and for Social Security it is projected to occur in 2017. Even this warning doesn't go far enough. The so-called trust fund is a fund that has nothing but IOU's. It is paper that has replaced the money congress has stolen from the social security yearly excess revenues. Congress has spent the money on pork barrel projects among other horrors.
Is there a time limit when I can apply for the extra help with prescription drug plans? You can apply any time, but you should apply as early as possible so you will know what assistance you can receive. Will a one-time increase in my income (for example, due to property sales or capital gains) affect my Part B premium forever? No. Each year we request your most recent tax return information from the Internal Revenue Service (IRS) to determine your current Part B premium. IRS generally provides information for two years prior to the year in question. For example, we generally would use your 2006 tax return information for your 2008 premium. For 2009, we generally would use your 2007 tax return information. We use your modified adjusted gross income (MAGI) from your income tax return to determine your premium for one year. Your MAGI is a combination of your adjusted gross income and tax exempt interest income. In the example, your 2006 tax return will reflect only your income for that year. So, if your premium increased in 2008 because you sold a property in 2006, it could decrease in 2009. Your 2008 Part B premium depends on your income for tax year 2006. Your 2009 Part B premium depends on your income for tax year 2007. For more information, see Social Security's publication, Medicare Part B Premiums: New Rules For Beneficiaries With Higher Incomes, call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. Issue Number: IR-2008-037 Inside This Issue Special Economic Stimulus Payment Packages Go to Social Security, Veterans Recipients WASHINGTON — Starting [this] week, the Internal Revenue Service will mail special information packages to 20.5 million recipients of Social Security or Veterans Affairs benefits to help them get their 2008 economic stimulus payment. The 10-page tax package contains everything the recipients will need to file a 2007 tax form immediately. Each package contains an informational notice, tips for completing Form 1040A, a sample Form 1040A and an actual Form 1040A for the filer to complete. The package is specially designed for people who may qualify for an economic stimulus payment but who normally aren’t required to file a tax return. “We want to put everything right at the fingertips of the people who need this information the most,” said Linda E. Stiff, Acting IRS Commissioner. “In some cases, seniors and others in this group haven’t needed to file a tax return for years or even decades. To help them get a stimulus payment, we’re doing everything we can to make this as easy as possible. These packages mean many people will just need a pen and a stamp, and the IRS will do the rest.” Under the Economic Stimulus Act of 2008, people may be eligible for the minimum payment of $300 ($600 for married couples) even if they do not normally file a tax return. There also is an additional payment of $300 for people with eligible children younger than 17. However, people must file an income tax return in order to receive the payment. People who don’t normally need to file also can use Free File – Economic Stimulus Payment, which is available at IRS.gov. Several Free File software providers are making their products available for the simplified filing of a tax return. “These stimulus payments have the potential to help people in real need and stimulate our economy,” said Tom Nelson, AARP’s Chief Operating Officer. “The IRS, through efforts like this, is doing a great job of informing people that they might be eligible for a stimulus payment, offering step-by-step guidance on how they can apply, and what scams they need to avoid.” To qualify for the minimum economic stimulus payment, people must have at least $3,000 in any combination of qualifying income from retirement, disability or survivors’ benefits from the Social Security Administration; disability compensation, disability pension or survivors’ benefits from the Department of Veterans Affairs; Tier 1 benefits from Railroad Retirement, certain combat pay and earned income from wages, salaries, tips or net earnings from self-employment that are includible in taxable income. The mailing list of 20.5 million names represents Social Security and Veterans Affairs benefit recipients who did not file a tax return in 2006, allowing the IRS to directly target the special package to people likely to qualify for a stimulus payment but who may not otherwise file a tax return this year. The mailing, called Package 1040A-3, is separate from more than 130 million other economic stimulus letters (Notice 1377) being sent this month to taxpayers who filed tax returns in 2006. Generally, the special mailing does not include low-wage workers without a filing requirement who could qualify for economic stimulus payments. The IRS is working with numerous community, governmental organizations and charitable groups to reach low-income workers and their families. People in this category also need to fill out a tax form, preferably a simple Form 1040A. With so many people potentially unaware of the stimulus payments, Stiff encouraged people to reach out to help their friends and family members. “We don’t want anyone to fall through the cracks,” Stiff said. “People can help friends and family members by making them aware of the payments or helping fill out the forms. These forms are very simple. In just a few minutes you can complete the entire process by filling in just a few lines.” A sample Form 1040A is included in the tax package and is available at IRS.gov. People need to complete the lines for the mailing label and provide a Social Security number; the filing status (single or married) and exemptions (children younger than 17 and their Social Security numbers). People with earned income must complete Line 7 to report their 2007 annual income. Recipients of Social Security, VA and Railroad Retirement payments must complete Line 14a of Form 1040A to report their 2007 annual benefits. Certain recipients should have a Form SSA-1099 or Form RRB-1099 with that information. Or, people can multiply their 2007 monthly benefit by the number of months the payment was received for 2007 to estimate their annual benefit amount. The IRS encourages recipients to complete the direct deposit information on the Form 1040A if they have bank accounts. Direct deposit will be the easiest and fastest way to receive a payment. The IRS also encourages people to file their income tax return as soon as possible. The IRS will begin issuing economic stimulus payments starting in May. The IRS reminds taxpayers it does not gather information for stimulus payments over the telephone, and it does not send unsolicited e-mail to taxpayers about tax account matters. If taxpayers receive an unsolicited e-mail from someone claiming to be from the IRS, don't click on any links. People should forward it to phishing@irs.gov, and then delete it. The only official IRS Web site is located at www.irs.gov. To be eligible for economic stimulus payments, people must have valid Social Security numbers, have at least $3,000 in qualifying income and not be a dependent or eligible to be a dependent on someone else’s income tax return. For taxpayers who normally file an income tax return, the maximum stimulus payment is $600 ($1,200 for married couples), amounts that will phase out starting with adjusted gross income of $75,000 ($150,000 for married couples). For taxpayers who file a 2007 income tax return, the amount of the economic stimulus payment will be calculated automatically by the IRS. What information do I need to complete the Application for Help with Medicare Prescription Drug Plan Costs? Our Factsheet, What You Need To Complete The Application For Help With Medicare Prescription Drug Plan Costs, describes what you need. For a list of the information you'll need, click on "Documents that will help you prepare in advance include." The application that I received in the mail indicates that the resource limits are $11,710 for singles and $23,410 for married couples. But I have heard elsewhere that the resource limits are $10,210 for singles and $20,410 for married couples living together. I am confused; what are the actual resource limits? A The limits are $10,210 for singles and $20,410 for couples. But the resource limits shown on the application include a $1,500 per person exclusion for burial purposes. So, if you expect to use some of your resources to pay for burial or funeral expenses, your resource limit is $11,710 if you are single or $23,410 if you are married and living with your spouse. Issue Number: TT-2008-44 Inside This Issue Beware of Tax Scams Don’t fall victim to tax scams. These schemes take several shapes, ranging from promises of large tax refunds to illegal ways of “untaxing” yourself. The IRS suggests that you remember three important guidelines: You are responsible and liable for the content of your tax return. Anyone who promises you a bigger refund without knowing your tax situation could be misleading you, and Never sign a tax return without looking it over to make sure it is accurate. Beware of these common schemes: Return Preparer Fraud: Dishonest tax return preparers can cause many headaches for taxpayers who fall victim to their ploys. Such preparers derive financial gain by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Choose carefully when hiring a tax preparer. As the saying goes, if it sounds too good to be true, it probably is. No matter who prepares your tax return you are ultimately responsible for its accuracy and for any tax bill that may arise due to a questionable claim. Identity Theft: It pays to be choosy when it comes to disclosing personal information. Identity thieves have used stolen personal data to access financial accounts, run up charges on credit cards and apply for new loans. The IRS is aware of several identity theft scams involving taxes or scammers posing as the IRS itself. The IRS does not use e-mail to contact taxpayers about issues related to their accounts. If you have any doubt whether a contact from the IRS is authentic call 800-829-1040 to confirm it. Frivolous Arguments: Promoters have been known to make outlandish claims that the Sixteenth Amendment concerning congressional power to establish and collect income taxes was never ratified; that wages are not income; that filing a return and paying taxes are merely voluntary; and that being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Don’t believe these or other similar claims. Such arguments are false and have been thrown out of court. Taxpayers have the right to contest their tax liabilities in court, but no one has the right to disobey the law. For more information about these and other tax scams visit the IRS Web site at IRS.gov. Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is IRS.gov. Issue Number: IRS TAX TIP 2008-Special Edition Inside This Issue Don't miss out on your stimulus payment Are you wondering what to do to ensure that you receive your economic stimulus payment which the IRS will begin to send out this May? In most cases you will not have to do anything extra. If you are eligible for a payment, all you have to do is file a 2007 tax return and the IRS will do the rest. However, recipients of Social Security, certain Veterans' and Railroad Retirement benefits and low-income workers who don’t normally need to file may have to take steps to insure receipt of the stimulus payment. If you are in this group and normally would not be required to file a tax return, you need to file a 2007 tax return this year to receive an economic stimulus payment. The return must show at least $3000 in qualifying income. Qualifying income includes Social Security benefits, certain Railroad Retirement benefits, certain veterans’ benefits and earned income, such as income from wages, salaries, tips and self-employment. While these people may not be normally required to file a tax return because they do not meet the filing requirement, the IRS emphasizes they must file a 2007 return in order to receive a payment. The IRS has released a sample version of a Form 1040A that highlights the simple, specific sections of the return that can be filled out by people in these categories to qualify for a stimulus payment. For more information see IRS Fact Sheet FS 2008-16 Stimulus Payments: Instructions for Low-Income Workers and Recipients of Social Security and Certain Veterans’ Benefits available on www.irs.gov. Be aware that identity thieves are already pushing scams involving the stimulus payments. At least one telephone scam is making the rounds using the proposed rebates as bait. IRS news release IR-2008-11,”IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting,” has more details. Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www .irs.gov. How will I know when my application for prescription drug help is received and processed by Social Security? We will send you a receipt after we get your application. If you apply over the Internet, a receipt page will immediately generate showing the date and time the completed application was received. You can print this receipt using the printer attached to your computer. We will also send you a decision notice after all processing is complete. Can I help my mother apply for the extra help with prescription drug costs? You can help your mother and complete the application on her behalf. Relatives, friends, attorneys, advocates, social workers and employees of government agencies are authorized to act on someone's behalf if they are chosen by that person to do so.
If I apply for the extra help and am approved, will I automatically be enrolled in a prescription drug plan? Only if you do not enroll on your own. If you do not enroll on your own, the Centers for Medicare & Medicaid Services will send you a letter that will tell you which plan you have been enrolled in and how to change plans. However, you could lose months of benefits and you may not get the plan that is best for you if you wait to be automatically enrolled. Right-click to download Real World Economics: For High School Seniors, College Students and New Entrants To The Workforce. It's Free-It's Instant You will need Adobe Reader (the latest version is recommended) installed on your computer in order to open and read this ebook. You can get Adobe Reader here (a new window will open so you can download it without leaving this page). If you want to open the file in your browser window, just click on the link. However, if you want to download the file to view later, then right-click on the link and choose "Save Target As" if you are using Internet Explorer or "Save Link As" if you are using Mozilla. Some Browsers use "Save File as" Then select where you want to save the file on your hard drive. Once you have saved the file, locate where you saved it, and double click to open. One of the main features is an outline of a plan for getting 25 to 30 year olds elected to congress. This is in no way an endorsement of Ron Paul. It is to show that a 25 year old with the same message of bringing the "federal monster" under control could raise enough money for a successful campaign. JFK is featured quite prominently in this Ebook. His tax cuts gave us one of the best economies in the history of America. You should find his economic philosophy both informative and illuminating. If I call 1-800-772-1213, can a Social Security representative take my application for Medicare prescription drug help over the phone? When you call the 800 number, if an interviewer is available, he or she can take your application over the phone. If an interviewer is not immediately available, we will schedule a telephone appointment for you. For faster service, you can apply online at www.socialsecurity.gov/prescriptionhelp. Issue Number: IR-2008-015 Inside This Issue More Information on Stimulus Payments Posted to IRS.gov; New Details for Recipients of Social Security, Veterans Benefits WASHINGTON — The Internal Revenue Service released additional information today about the upcoming economic stimulus payments in a specially designed section for taxpayers on IRS.gov. The new information includes an extensive set of Frequently Asked Questions about the stimulus payments, with a special emphasis on recipients of Social Security and certain veterans’ benefits. Millions of people in this group who normally don’t file a tax return will need to do so this year in order to receive a stimulus payment. For recipients of Social Security and certain veterans’ benefits and low-income workers who don’t normally need to file, the IRS also released a special version of a Form 1040A that highlights the simple, specific sections of the return that can be filled out by people in these categories to qualify for a stimulus payment. “Most taxpayers just need to file a 2007 tax return in order to automatically receive the stimulus payment,” said Acting IRS Commissioner Linda Stiff. “But we are especially concerned about recipients of Social Security and veterans’ benefits who may need to take special steps this year to file a tax return in order to obtain a stimulus payment. IRS.gov will help taxpayers get what they need.” The Frequently Asked Questions section – accessible through the front page of IRS.gov -- includes an extensive set of information for all taxpayers with questions about the stimulus payments, commonly referred to as rebates. The questions and answers include important information for low-income workers and certain recipients of Social Security, Railroad Retirement benefits and veterans’ benefits. The special IRS.gov section also features extensive examples of how much taxpayers can expect to receive in stimulus payments. The page includes more than two-dozen payment scenarios affecting different types of taxpayers. IRS.gov will be updated frequently to provide taxpayers with all they need to understand the stimulus payments. The IRS will begin sending taxpayers their economic stimulus payments in early May after the current tax season concludes. In most cases, the payment will equal the amount of tax liability on the tax return, with a maximum amount of $600 for individuals ($1,200 for married couples who file a joint return). Payments to more than 130 million households will continue over several weeks during the spring and summer. A payment schedule for taxpayers will be announced in the near future on IRS.gov. The IRS reminds taxpayers when they file their 2007 tax return to use direct deposit, which is the fastest way to get both regular refunds and stimulus payments. However, taxpayers who use Refund Anticipation Loans (RALs) or enter into any other loan or financial agreement with their tax professional cannot receive their stimulus payments by direct deposit and instead will get a paper check. The only way to receive a stimulus payment in 2008 is to file a 2007 tax return. The vast majority of taxpayers must take no extra steps to receive their stimulus payment beyond the routine filing of their tax return. No other action, extra form or call is necessary. Special Guidelines for Recipients of Certain Social Security, Veterans and Railroad Benefits Certain people who normally are not required to file but who are eligible for the stimulus payment will have to file a 2007 tax return. This includes low-income workers or those who receive Social Security benefits or veterans’ disability compensation, pension or survivors’ benefits from the Department of Veterans Affairs in 2007. These taxpayers will be eligible to receive a payment of $300 ($600 on a joint return) if they had at least $3,000 of qualifying income. Qualifying income includes Social Security benefits, certain Railroad Retirement benefits, certain veterans’ benefits and earned income, such as income from wages, salaries, tips and self-employment. For taxpayers filing joint tax returns, only a total of $3,000 of qualifying income from both spouses is required to be eligible for a payment. The special version of the Form 1040A unveiled today on IRS.gov shows taxpayers in these groups the specific sections of the form they need to fill out to qualify for the stimulus payment. The mock-up is designed to be used as a guide for filling out an actual Form 1040A. “People who don’t normally need to file have a roadmap on how to fill out the Form 1040A quickly and easily,” Stiff said. “We encourage recipients of Social Security and veterans’ benefits who don’t normally need to file a tax return to use this mock-up of the form as a guide to help them get their stimulus payment.” The Form 1040A illustration on IRS.gov shows the limited number of lines that will need to be filled out for recipients of Social Security, certain Railroad Retirement and certain veterans’ benefits. A key line is reporting their 2007 benefits on Line 14a of Form 1040A. The IRS reminds taxpayers they can also use Line 20a on Form 1040 to report these same benefits. In addition, taxpayers in these groups should write the words “Stimulus Payment” at the top of the 1040A or 1040. For now, taxpayers in this group filing a tax return can only file a paper copy of the Form 1040 or Form 1040A. The IRS is working to update its systems to accept electronic versions of these limited-information returns for taxpayers who otherwise have no need to file a tax return. The IRS is also working with the software community to handle these returns electronically at a future date. The IRS also reminded taxpayers with Social Security, Railroad Retirement or veterans’ benefits who have already filed but did not report their qualifying benefits on either Line 14a of Form 1040A or Line 20a of Form 1040 that they may need to file an amended return in some situations to receive a larger stimulus payment. Taxpayers who already have filed but did not report these benefits can file an amended return by using Form 1040X, which can only be filed with a paper form. The IRS reminded taxpayers who don’t have any other requirement to file a tax return that submitting a tax return to qualify for the economic stimulus payments does not create any additional tax or trigger a tax bill. In addition, the stimulus payments will not have any effect on eligibility for federal benefits. The IRS is working with the Social Security Administration and Department of Veterans Affairs and other organizations to ensure that recipients are aware of the need to file a tax return to receive their stimulus payment in 2008. How and where can I apply for the extra help for the prescription drug program? You have several options for applying. You can: Apply online. Complete the application we mailed to you and return it in the postage-paid envelope. Call 1-800-772-1213 if you did not receive an application and think you may be eligible. We will mail you a form or help you on the phone to complete the application. Look for information about Social Security events or meetings in your local community that will discuss the prescription drug program, and attend one of them. We will help you apply at the event. Visit your local Social Security office. When can I sign up for my Medicare drug coverage? If you are newly entitled or enrolled in Medicare, you may enroll during your initial enrollment period for Medicare. If you do not join during this period, your next chance to join will be during the annual coordinated election period (AEP) between November 15 and December 31 each year. There will also be special enrollments periods (SEPs) if you lose your employer-based coverage, move from your prescription drug provider's (PDP) or Medicare-Advantage Plan that offers prescription drug coverage (MA-PD) service area and when a provider goes out of business or is decertified by Medicare. How do I obtain a copy of the form, Application for Help with Medicare Prescription Drug Plan Costs, SSA-1020? If you just want to see the application form, you can view a sample at www.socialsecurity.gov/prescriptionhelp. Instruction sheets are available in 15 different languages to help you understand the English application. If you wish to apply for help with Medicare prescription drug costs, we recommend that you use our online application at www.socialsecurity.gov/i1020/ If you prefer not to fill out this application on the Internet, you can call our toll-free number, 1-800-772-1213 for a paper application or to make an appointment for application.. If you are deaf or hard of hearing, call our toll-free TTY number, 1-800-325-0778. Representatives are available Monday through Friday from 7 a.m. to 7 p.m. Tell the representative that you want to apply for help with Medicare prescription drug costs. I no longer need Medicare Part B, because I am covered by other health insurance. How do I disenroll? If you wish to disenroll from Medicare Part B, you will need to submit form CMS-1763 to the Social Security Administration. The form is used to voluntarily terminate entitlement to Supplementary Medical Insurance (Part B) and Premium hospital Insurance and is owned by the Center for Medicare and Medicaid Services (CMS). CMS requires that a personal interview be conducted with every individual who wishes to terminate entitlement and so we do not offer form CMS-1763 on the public Internet site. The form will be completed during an in-person or phone interview so that we can ensure that the beneficiary understands the ramifications of termination. After the interview, our Social Security Administration representative is required to provide you with a letter outlining the consequences of voluntary termination and of the right to withdraw the termination request before coverage ends. Disenrolling is a serious decision; if you wish to reenroll later, you may have to pay a surcharge. Termination of Medicare Part B will be effective at the end of the month following the month in which the termination request is filed. For an interview, call our toll-free number, 1-800-772-1213 or contact your local Social Security office. ### What are the income and resource requirements for the extra help with prescription drug costs? If your annual income is below $15,315 (or $20,535 if you are married and living with your spouse), you may qualify for the extra help. Even if your annual income is higher, you still may be able to get some help. Some examples when your income may be higher include if you or your spouse: Support other family members who live with you; Have earnings from work; or Live in Alaska or Hawaii. To get the extra help with Medicare prescription drug plan costs, your total resources generally must be limited to $11,710 (or $23,410 if you are married and living with your spouse). Resources include the value of the things you own. Some examples are: Real estate (other than your primary residence); Bank accounts, including checking, savings and certificates of deposit; Stocks; Bonds, including U.S. Savings Bonds; Mutual funds; Individual Retirement Accounts (IRAs); or Cash at home or anywhere else. Does Medicare have an 800 number? Yes. You may direct your questions to Medicare's representatives at their toll-free number, 1-800-633-4227. Hearing and speech impaired individuals may call their toll-free "TTY/TDD" number, 1-877-486-2048, during regular business hours. Information about the Medicare program can also be accessed at the following websites: http://www.medicare.gov. You can also reach the Center for Medicare and Medicaid Services (CMS), the federal agency that administers Medicare, at http://www.cms.hhs.gov/default.asp Will Medicare cover my medical expenses outside of the U.S.? Persons living or traveling outside the United States usually cannot benefit from Medicare. This is because, generally speaking, the program provides protection against the cost of hospital and medical expenses incurred in the United States. There are rare emergency cases where Medicare can pay for care in Canada or Mexico. Also, Medicare can sometimes pay if a Canadian or Mexican hospital is closer to your home than the nearest U.S. hospital that can provide the care you need. If you get emergency treatment in a Canadian or Mexican hospital or if you live near one, ask someone who works at the hospital about Medicare coverage, or have the hospital help you contact the Medicare Intermediary. Health insurance protection may be very important to anyone temporarily abroad who plans to return to the United States. If you plan to return to the United States shortly after you are eligible for the medical insurance program, you may wish to enroll during your first enrollment period. If you expect to be abroad for a longer period of time, you may wish to enroll during a later general enrollment period. A general enrollment period is held January 1 through March 31 of each year. Your protection will begin July 1 of the year you enroll. If you enroll during a general enrollment period, your monthly premium may be increased by 10 percent for each 12-month period you could have had medical insurance coverage but were not enrolled. You will have to pay this extra amount as long as you have Part B. NOTE: If you are covered by an employer or union group health plan through your or your spouse's current or active employment, you may qualify for a special enrollment period. I did not apply for Medicare when I turned 65. Can I apply later? A general enrollment period from January 1 through March 31 of each year permits people 65 or over who failed to enroll or dropped their Part B Medicare coverage to sign up. Their coverage will begin July 1. Generally, a 10 percent premium penalty will be added to the monthly premium for each year they could have enrolled but did not. However, if you are covered by an employer or union group health plan through you or your spouse's current or active employment, you may qualify for a special enrollment period. If you meet the requirements for a special enrollment period, you do not have to wait for a general enrollment period or pay a premium penalty. You have an eight- month special enrollment period if you have group health plan coverage from current employment at the time you first became eligible for Medicare. This special enrollment period begins with the month employment ends or the month your group health plan coverage ends, whichever comes first.
How do I apply for Medicaid? The Medicaid Program - General Medicaid is a medical assistance program that is partially funded by the Federal Government but run by each State. Medicaid pays for basic medical care for people and families with low incomes and resources. People who are blind or disabled, age 65 or older, children, or members of families with dependent children may be eligible. Using broad Federal guidelines, each State runs its own Medicaid program. The State decides who is eligible and the amount of medical care and services it will cover. Representatives in your local public assistance office can tell you about eligibility for Medicaid and whether you qualify. You may also want to ask them about other assistance in your community for which you may be eligible. For more information on the Medicaid program, see http://www.cms.hhs.gov/medicaid/ Medicaid for SSI Recipients Thirty-two states and the District of Columbia provide Medicaid to people eligible for Supplemental Security Income (SSI). In these States, the SSI application is also the Medicaid application. Medicaid eligibility usually starts the same month as SSI eligibility, but in certain circumstances can also be retroactive for up to three months. The following jurisdictions use the same rules to decide eligibility for Medicaid as SSA uses for SSI, but require filing a separate application: Alaska, Idaho, Kansas, Nebraska, Nevada, Oregon, Utah, Northern Mariana Islands The following States use their own eligibility rules for Medicaid, which are different from SSA's SSI rules. In these States a separate application for Medicaid must be filed: Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, Virginia. For more information, see Medicaid for SSI recipients. If I retire at age 62 will I be eligible for Medicare at that time? No. Medicare benefits based on retirement do not begin until a person is age 65. If you retire at age 62, you may be able to continue to have medical insurance coverage through your employer or purchase it from a private insurance company until you turn age 65 and become eligible for Medicare. Do I automatically get Medicare benefits if I'm eligible for disability benefits? We will automatically enroll you in Medicare after you get disability benefits for two years. We start counting the 24 months from the month you were entitled to receive Disability, not the month when you received your first check. People with amyotrophic lateral sclerosis (Lou Gehrig's disease) get Medicare beginning with the month they become entitled to disability benefits. Medicare has two parts - hospital insurance and medical insurance. Hospital insurance helps pay hospital bills and some follow-up care. The taxes you paid while you were working financed this coverage, so it's premium free. The other part of Medicare, medical insurance, helps pay doctors' bills and other services. You will pay a monthly premium for this coverage if you want it. Where can I find information on the Medicare Prescription Drug Improvement and Modernization Act of 2003? On December 8, 2003, President Bush signed into law H.R. 1, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173). You can find information about this law at Prescription Drug Info For assistance in selecting a plan and enrolling, go the Medicare Prescription Drug Plan Finder, a Web site of the Center for Medicare and Medicaid Services (CMS). I am 65 and my wife is 62 and receiving spouse's benefits. When does she qualify for Medicare benefits? Most people must wait until age 65 to qualify for Medicare benefits. Some people can get Medicare at any age. This includes people who: Have been getting Social Security disability benefits for 24 months; Have kidney failure and require dialysis; Have had a kidney transplant; or Receive disability benefits because they suffer from amyotrophic lateral sclerosis (also known as Lou Gehrig's disease).
Is it true that you can get help paying Medicare premiums? Yes. If your income and resources are limited, your state may be able to help with your Medicare Part B premium, deductibles and coinsurance amounts. State rules vary on the income and resources that apply. Contact your state or local medical assistance, social services or welfare office, or call the Medicare hotline, 1-800-MEDICARE (1-800-633-4227) and ask about the Medicare Savings Programs. If you have limited income and resources, you also may be eligible for help paying for Prescription Drug Coverage under Medicare Part D. Call Social Security at 1-800-772-1213 or visit any Social Security office and ask about extra help paying for Medicare prescription drug coverage. (TTY users should call 1-800-325-0778.) Is there an increase in premiums if I enroll in Medicare after age 65 and what is a special enrollment period (SEP)? Your premium will be increased if you do not apply at age 65. Enrollment rules are very strict. Initially, you have seven months to sign up for medical insurance (Medicare Part B). This seven-month period begins three months before your 65th birthday, includes the month you turn 65 and ends three months after that birthday. If you enroll during the first three months of |
