What Are Old Age And Survivors Health Insurance
What are old age and survivors health insurance?
Old Age and Survivors Health Insurance is a health insurance program that provides benefits to eligible individuals aged 65 or older or survivors of a deceased insured. The program helps pay for medical expenses, including doctor visits, hospital stays, and prescription drugs.
To be eligible for OASHI and other Medicaid benefits, you must meet specific financial and non-financial requirements.
You must be a resident of the state where you apply for OASHI there are no exceptions. If you ever move to another state, even for a short time, you will lose your eligibility for OASHI and any other type of SSI or Medicaid.
You must be a U.S. citizen or meet specific immigration requirements.
Your income and resources must fall below certain limits. The lower your income and resources, the more likely you will be eligible for benefits.
Some of these financial requirements are based on your age. For example, as of January 1, 2019, if you are between 65 and 74 years old, your income cannot exceed $2,313 per month . If you are 75 or older, your payment cannot exceed $2,566 per month .
The amount of money you have in assets also affects whether you can OASHI benefits. As of January 1, 2019, if you are 65 or older, your total countable assets cannot exceed $2,000. If you are between 18 and 64, your countable assets cannot exceed $5,150.
Office Of Hearings Operations
On August 8, 2017, Acting Commissioner Nancy A. Berryhill informed employees that the Office of Disability Adjudication and Review would be renamed to Office of Hearings Operations . The hearing offices had been known as “ODAR” since 2006, and the Office of Hearings and Appeals before that. OHO administers the ALJ hearings for the Social Security Administration. Administrative Law Judges conduct hearings and issue decisions. After an ALJ decision, the Appeals Council considers requests for review of ALJ decisions, and acts as the final level of administrative review for the Social Security Administration .
What Is Old Age And Survivors Health Insurance
What Is Old Age and SurvivorsHealth Insurance? This covers your loved ones when you cannot. This type of coverage is part of a larger program known as Old-Age, Survivors, and Disability Insurance . This type of insurance is for people who have had serious accidents, suffered a disability, or become permanently disabled. You can also get this type of insurance if your loved one passes away. The disability benefits will pay out up to seven times the amount of your monthly premium if you die or become a disability
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Alternative Pia Computation Provisions
Special minimum PIA. Workers with low earnings but steady attachment to the workforce over most of their adult years may qualify for monthly benefits based on the special minimum PIA computation. This computation does not depend on the worker’s average earnings but on the number of coverage yearsyears in which the worker had earnings equal to or above a specified amount. The level of the special minimum PIA is the same for workers having the same number of coverage years, regardless of age or year of first eligibility. Increases in the special minimum PIA are linked to cost-of-living adjustments.
Windfall Elimination Provision . The WEP affects workers who receive Social Security benefits based on their own work and are also entitled to a pension based on noncovered work after 1956. First eligibility for the noncovered pension and for Social Security benefits must be after December 31, 1985, for WEP to apply. WEP reduces the Social Security PIA upon which OASDI benefits are based and affects all benefits paid on that record except those for survivors. The WEP reduction ceases when entitlement to the pension payment ends, the wage earner dies, or the wage earner earns a total of 30 years of substantial Social Security earnings. The WEP reduction amount is limited to no more than one-half the amount of the noncovered pension.
Example: A retired worker with a noncovered pension of $2,000 a month and fewer than 21 years of covered employment attains age 62 in 2013.
Social Security Program Description And Legislative History
The Old-Age, Survivors, and Disability Insurance program provides monthly benefits to qualified retired and disabled workers and their dependents and to survivors of insured workers. Eligibility and benefit amounts are determined by the worker’s contributions to Social Security. There is no means test to qualify for benefits, although there is a limit on income earned from working that applies to those under the full retirement age.
At the end of December 2012, nearly 57 million people were receiving benefits that totaled about $65 billion for the month. Beneficiaries were paid approximately $775 billion in calendar year 2012. According to the latest Social Security Trustees Report, total OASDI trust fund expenditures during 2012 made up 4.8 percent of the nation’s gross domestic product. During the same year, approximately 161 million employees and self-employed workers, along with employers, contributed $590 billion to the OASDI trust fundsthrough which contributions are credited and benefits are paid. An additional $114 billion was transferred from the general fund of the Treasury to the OASDI trust funds to compensate for the lower payroll tax rate in effect for 2011 and 2012.
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Contrast With Private Pensions
Although Social Security is sometimes compared to private pensions, the two systems are different in a number of respects. It has been argued that Social Security is an insurance plan as opposed to a retirement plan. Unlike a pension, for example, Social Security pays disability benefits. A private pension fund accumulates the money paid into it, eventually using those reserves to pay pensions to the workers who contributed to the fund and a private system is not universal. Social Security cannot “prefund” by investing in marketable assets such as equities, because federal law prohibits it from investing in assets other than those backed by the U.S. government. As a result, its investments to date have been limited to special non-negotiable securities issued by the U.S. Treasury, although some argue that debt issued by the Federal National Mortgage Association and other quasi-governmental organizations could meet legal standards. Social Security cannot by law invest in private equities, although some other countries and some states permit their pension funds to invest in private equities. As a universal system, Social Security generally operates as a pipeline, through which current tax receipts from workers are used to pay current benefits to retirees, survivors, and the disabled. When there is an excess of taxes withheld over benefits paid, by law this excess is invested in Treasury securities as described above.
Restrictions On Potentially Deceptive Communications
Because of the importance of Social Security to millions of Americans, many direct-mail marketers packaged their mailings to resemble official communications from the Social Security Administration, hoping recipients would be more likely to open them. In response, Congress amended the Social Security Act in 1988 to prohibit the private use of the phrase “Social Security” and several related terms in any way that would convey a false impression of approval from the Social Security Administration. The constitutionality of this law was upheld in United Seniors Association, Inc. v. Social Security Administration, 423 F.3d 397 , cert den 547 U.S. 1162 126 S.Ct. 2346 .
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Private Retirement Savings Crisis
While inflation-adjusted stock market values generally rose from 1978 to 1997, from 1998 through 2007 they were higher than in March 2013. This has caused workers’ supplemental retirement plans such as 401s to perform substantially more poorly than expected when current retirees were investing the bulk of their savings in them. In 2010, the median household retirement account balance for workers aged 55 to 64 was $120,000, which will provide only a trivial supplement to Social Security benefits, but about a third of households had no retirement savings at all. 75% of Americans nearing retirement age had less than $30,000 in their retirement accounts, which Forbes called “the greatest retirement crisis in American history.”
Claim That It Is A Ponzi Scheme
Critics have drawn parallels between Social Security and Ponzi schemes, arguing that the sustenance of Social Security is due to continuous contributions over time. One criticism of the analogy is that while Ponzi schemes and Social Security have similar structures , they have different transparencies. In the case of a Ponzi scheme, the fact that there is no return-generating mechanism other than contributions from new entrants is obscured whereas Social Security payouts have always been openly underwritten by incoming tax revenue and the interest on the Treasury bonds held by or for the Social Security system. The sudden loss of confidence resulting in a collapse of a conventional Ponzi scheme when the scheme’s true nature is revealed is unlikely to occur in the case of the Social Security system. Private sector Ponzi schemes are also vulnerable to collapse because they cannot compel new entrants, whereas participation in the Social Security program is a condition for joining the U.S. labor force. In connection with these and other issues, Robert E. Wright calls Social Security a “quasi” pyramid scheme in his book, Fubarnomics.
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Earnings And Disability Benefits
Beneficiaries entitled on the basis of their own disabilitydisabled workers, disabled adult children, and disabled widowsare not subject to the annual earnings test. Substantial earnings by disabled beneficiaries, however, may indicate that they are able to do work that constitutes substantial gainful activity and therefore no longer meet the requirements for disability benefits. Although other factors are considered, numerical earnings thresholds are used to evaluate SGA. Disabled beneficiaries must report all earnings to SSA for timely evaluation of SGA.
Through 2000, SSA periodically changed the earnings amount for which a nonblind disabled individual was considered to be engaged in SGA. Effective January 1, 2001, SGA amounts are automatically adjusted annually on the basis of increases in the national average wage index. The SGA amount for nonblind individuals in calendar year 2013 is $1,040 per month.
A different definition of SGA applies to blind individuals receiving Social Security disability benefits. Increases in the SGA amount for blind individuals have been pegged to increases in the national average wage index since 1978. The SGA level for blind individuals in calendar year 2013 is $1,740 per month.
Contributions And Trust Funds
A person contributes to Social Security through either payroll taxes or self-employment taxes under the Federal Insurance Contributions Act or the Self-Employment Contributions Act . Employers match the employee contribution, while self-employed workers pay an amount equal to the combined employer-employee contributions. There is a maximum yearly amount of earnings subject to OASDI taxes$113,700 in 2013. There is no upper limit on taxable earnings for Medicare Hospital Insurance. Employees whose earnings exceed the maximum taxable amount because they worked for more than one employer can receive refunds of excess FICA payments when they file their tax returns.
Taxes are allocated to three trust funds: the Old-Age and Survivors Insurance , the Disability Insurance , and the Medicare Hospital Insurance Trust Funds. In addition to the taxes on FICA- and SECA-covered earnings, OASI and DI trust fund revenues include interest on trust fund securities, income from taxation of OASI and DI benefits, certain technical transfers, and gifts or bequests. By law, the OASI and DI trust funds may only be disbursed for
- monthly benefits for workers and their families,
- vocational rehabilitation services for disabled beneficiaries,
- administrative costs , and
- the lump-sum death payment to eligible survivors.
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Claim That Politicians Exempted Themselves From The Tax
Critics of Social Security have said that the politicians who created Social Security exempted themselves from having to pay the Social Security tax. When the federal government created Social Security, all federal employees, including the president and members of Congress, were exempt from having to pay the Social Security tax, and they received no Social Security benefits. This law was changed by the Social Security Amendments of 1983, which brought within the Social Security system all members of Congress, the president and the vice president, federal judges, and certain executive-level political appointees, as well as all federal employees hired in any capacity on or after January 1, 1984. Many state and local government workers, however, are exempt from Social Security taxes because they contribute instead to alternative retirement systems set up by their employers.
Reducing Cost Of Living Adjustment
At present, a retiree’s benefit is annually adjusted for inflation to reflect changes in the consumer price index. Some economists argue that the consumer price index overestimates price increases in the economy and therefore is not a suitable metric for adjusting benefits, while others argue that the CPI underestimates the effect of inflation on what retired people actually need to buy to live.
In 2003 economics researchers Hobijn and Lagakos estimated that the social security trust fund would run out of money in 40 years using CPI-W and in 35 years using CPI-E.
Social Security Number Theft
Because Social Security Numbers have become useful in identity theft and other forms of crime, various schemes have been perpetrated to acquire valid Social Security Numbers and related identity information.
In February 2006, the Social Security Administration received several reports of an email message being circulated addressed to “Dear Social Security Number And Card owner” and purporting to be from the Social Security Administration. The message informs the reader “that someone illegally is using your Social Security number and assuming your identity” and directs the reader to a website designed to look like Social Security’s Internet website.
“I am outraged that someone would target an unsuspecting public in this manner,” said Commissioner Jo Anne B. Barnhart. “I have asked the Inspector General to use all the resources at his command to find and prosecute whoever is perpetrating this fraud.”
Once directed to the phony website, the individual is reportedly asked to confirm his or her identity with “Social Security and bank information”. Specific information about the individual’s credit card number, expiration date and is then requested. “Whether on our online website or by phone, Social Security will never ask you for your credit card information or your PIN,” Commissioner Jo Anne B. Barnhart reported.
Reasons For Oasi’s Financial Challenges
There are a number of financial challenges facing Social Security. The 2021 annual report noted that the coronavirus pandemic of 2020 had adversely affected the financial viability of the trust fund.
Another challenge facing Social Security is life expectancy. In 1940, a 65-year-old retiree had a life expectancy of another 14 years, while today, it’s 20 years. Also, population growth has added to the financial challenges. For example, the number of Americans 65 and older today total 57 million, and by 2035, that number is expected to increase to 76 million.
As a result, there will be fewer workers paying into Social Security. For example, there are currently 2.7 workers for each Social Security beneficiary, and by 2035, the number of workers will be 2.3 per beneficiary. The U.S. Congress will likely need to make changes to replenish the fund, or future retirees may receive reduced benefits.
How Workers Can Get Estimates Of Benefits
The Social Security Administration provides benefit estimates to workers through the Social Security Statement. The Statement can be accessed online by opening an online account with SSA called my Social Security. With that account, workers can also construct “what if” scenarios, helping them to understand the effect on monthly benefits if they work additional years or delay the start of retirement benefits. The my Social Security account also offers other services, allowing individuals to request a replacement Social Security card or check the status of an application.
A printed copy of the Social Security Statement is mailed to workers age 60 or older.
In 2021, SSA began producing Retirement Ready fact sheets, available online and as part of the online Statement, that tailor retirement planning information to different age groups .
SSA also has a Benefits Calculators web page with several stand-alone online calculators that help individuals estimate their benefits and prepare for retirement. These include benefit calculators for spouses, calculators for persons affected by the Windfall Elimination Provision or the Government Pension Offset and calculators to determine a person’s full retirement age or the effect of the earnings test on benefits.
SSA also provides a life expectancy calculator to help with retirement planning.
Spouse’s Benefit And Government Pension Offsets
The spouse or divorced spouse of a retirement beneficiary is eligible for a Social Security spouse benefit if the spouse or divorced spouse is 62 or older. The benefit amount is equal to 50 percent of the retirement beneficiary’s Primary Insurance Amount if the spouse claims the benefit at the full retirement age or later. If a person is eligible for both a retirement benefit based the person’s own work in Social Security covered employment and a spouse benefit based on a spouse’s work in covered employment, SSA will pay a total amount approximately equal to the higher of the two benefits. For example, if at the full retirement age, a spouse claims a retirement benefit of $300 and a spouse benefit of $450, SSA will pay the person a $300 retirement benefit and a $150 dollar partial spouse benefit for a total benefit of $450.
A spouse is eligible after a one-year duration of marriage requirement is met and a divorced spouse is eligible for spousal benefits if the marriage lasted for at least ten years and the person applying is not currently married. Payment of benefits to a divorced spouse does not reduce the Social Security benefits of the retired worker or family members of the retired worker, such as the worker’s current spouse. A divorced person can claim spousal benefits once the former spouse is eligible for retirement benefits, regardless of whether the former spouse has claimed those retirement benefits.
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