Key Elder Law Dollar Amounts – Medicaid / Auxiliary Grant / Medicare / SS Benefits

Last Updated: 11/6/2020 (unless otherwise noted)

Below are figures for 2021 that are frequently used in the elder law practice, including the figures for spousal impoverishment, penalty divisors, and more, for Virginia, MD, and DC. Medicare premiums and co-pays, Social Security Disability, and Supplemental Security Income are also covered.

Medicaid Figures:

Medicaid is the primary funding source for long-term care for millions of disabled and elderly middle-class Americans, providing vital long-term care coverage to those who qualify for the benefit.

Although the federal government establishes general guidelines for the program, states design, implement, and administer their own Medicaid programs. The federal government matches state expenditures on medical assistance based on the federal medical assistance percentage, which can be no lower than 50 percent. In fiscal year 2019, total Medicaid spending was $616 billion — all of which is of course funded by your tax dollars. If you are smart enough to do legal planning to get some of these tax dollars back to pay for your long-term care when you need it, it’s ethically no different than income tax planning, when you try to get the biggest income tax refund every year.

Virginia/Maryland/DC Medicaid Numbers

Divestment Penalty Divisors (updated July 1, 2020)

Northern Virginia Penalty Divisor: $9,032.00 – Northern Virginia (Alexandria, Arlington, Fairfax, Falls Church, Loudoun, Manassas, Prince William)
Rest of Virginia Penalty Divisor: $6,422
DC Penalty Divisor: $12,883.74
Maryland Penalty Divisor: $9,673

Individual Resource Allowance
VA: $2,000
DC: $4,000
MD: $2,500

Married Couple Resource Allowance
VA: $3,000
DC: $7,000
MD: $3,000.00 each for first 6 months – $2,500.00 each after 6 months, $2,500 each (if separate rooms or facilities)

Monthly Personal Income Allowance for Nursing Home Residents
VA: $40
DC: $70
MD: $82

Shelter Standard
VA: $646.50
DC: $646.50
MD: $646.50

Standard Utility Allowance
VA: $311
DC: $305
MD: $420

Medicaid Home Equity Cap
Minimum: $595,000 (VA and MD)
Maximum: $893,000 (DC)

Community Spouse Resource Allowance
Minimum Community Spouse Resource Allowance (except in Alaska and Hawaii): $25,728
Maximum Community Spouse Resource Allowance (except in Alaska and Hawaii): $128,640

Community Spouse Monthly Maintenance Needs Allowance
Minimum Monthly Maintenance Needs Allowance (except in Alaska and Hawaii): $2,155
Maximum Monthly Maintenance Needs Allowance (except in Alaska and Hawaii): $3,216

For CMS’s complete chart of the 2020 SSI and Spousal Impoverishment Standards, click here.

Virginia Auxiliary Grant Figures and Facilities:
Effective July 1, 2020: Northern Virginia: $1,620 – $20 disregard
Effective July 1, 2020: Rest of Virginia: $1,409 – $20 disregard
Personal Needs Allowance throughout the State: $82

List of Assisted Living Facilities that Accept Virginia Auxiliary Grant

Veterans Aid and Attendance Figures:
Click here for all Veterans Aid and Attendance Figures and Rules.

Medicare

Medicare is the federal government program that provides health insurance if you are 65+, under 65 and receiving Social Security Disability Insurance (SSDI) for a certain amount of time, or under 65 and with End-Stage Renal Disease (ESRD). Medicare has been protecting the health and well-being of American families and saving lives for five decades.

The Centers for Medicare & Medicaid Services (CMS) recently released the 2021 premiums, deductibles, and coinsurance amounts for the Medicare programs. The announcement came following the Social Security Administration set a 1.3% cost-of-living adjustment to benefits in 2021.

Below are the numbers that have changed for the coming year:

Medicare Part A

Medicare Part A covers primarily inpatient hospital care. Most Medicare beneficiaries (99%) do not pay a premium for Medicare Part A, as long as they have at least 40 quarters of qualifying employment. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.

Medicare Deductibles, Premiums and Co-pays

Medicare Part A Deductible

2021: $1,452 deductible for each benefit period

2020: $1,408 deductible for each benefit period

Medicare Part A Premium

If you are one of the small number of people who don’t qualify for free Part A coverage and decide to purchase it on your own, you’ll pay:

2021: $478 each month

2020: $458 each month

Co-payment for hospital stay, days 61-90

2021: $363 per day

2020: $352 per day

Co-payment for hospital stay, days 91 and up

2021: $726 per day

2020: $704 per day

Co-payment for skilled nursing facility stay, days 21-100

2021: $181.50 per day

2020: $176 per day

Medicare Part B Premiums/Deductibles (2021 Summary)

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.

Each year the Medicare premiums, deductibles, and copayment rates are adjusted according to the Social Security Act. The monthly premiums for Part B are determined based on Medicare’s overall program costs and other health insurance factors.

As the actuaries for the Centers for Medicare and Medicaid Services (CMS) began running the numbers earlier this year, lawmakers and advocates learned that the data indicated that the 2021 Part B premium could increase by as much as $50 a month for some beneficiaries, but we learn now that they were off by a lot with this prediction.

The larger-than-usual Part B premium increase was projected because of the increased emergency Medicare spending resulting from the COVID-19 pandemic. In addition to the health care costs to treat the coronavirus, the federal government also has been paying doctors and other Part B providers to offset the money those providers have lost because many Medicare enrollees have postponed some routine and preventive care during the crisis.

To offset this emergency spending and avoid a large premium increase, Congress in its new budget law added enough money to Medicare so the Part B premium will increase only by an estimated $4 a month.

The annual Part B premium increase is especially important for the majority of Medicare enrollees who also receive Social Security benefits. Of the more than 62 million Medicare beneficiaries, nearly 44 million have their premiums deducted directly from their monthly Social Security benefit. Under a federal “hold harmless” law, recipients will have to pay the portion of the Part B premium increase that doesn’t result in their receiving a lower Social Security monthly payment. A large Part B premium increase would likely have eaten up the 1.3% cost-of-living adjustment (COLA) the Social Security Administration set for 2021, so thankfully the increase is around $4 a month, rather than $50!

How are Medicare Advantage premiums changing for 2021?

About 24 million people had Medicare Advantage plans in 2020, and CMS projects that it will grow to 26 million in 2021. Enrollment in these plans has been steadily growing for the last 15 years.

According to CMS, the average Medicare Advantage(Medicare Part C) premiums for 2021 is expected to be $21/month in 2021, down from $23/month in 2020. Average Advantage premiums have been declining for the last several years, and the average premium for 2021 is the lowest it’s been since 2007.

(Note that Medicare Advantage premiums are in addition to Part B premiums. People who enroll in Medicare Advantage pay their Part B premium and whatever the premium is for their Medicare Advantage plan, and the private insurer wraps all of the coverage into one plan.)

How is Medicare Part D prescription drug coverage changing for 2021?

For stand-alone Part D prescription drug plans, the maximum allowable deductible for standard Part D plans will be $445 in 2021, up from $435 in 2020.

The out-of-pocket threshold (where catastrophic coverage begins) will increase to $6,550 in 2021, up from $6,350 in 2020. The copay amounts for people who reach the catastrophic coverage level in 2021 will increase slightly, to $3.70 for generics and $9.20 for brand-name drugs.

Medicare beneficiaries with Part D coverage (stand-alone or as part of a Medicare Advantage plan) will have access to insulin with a co-pay of $35/month in 2021. This is expected to save beneficiaries several hundred dollars per year.

Part D and the Donut Hole

The Affordable Care Act has closed the donut hole in Medicare Part D. As of 2020, there is no longer a “hole” for brand-name or generic drugs: Enrollees in standard Part D plans pay 25% of the cost (after meeting their deductible) until they reach the catastrophic coverage threshold. Prior to 2010, enrollees paid their deductible, then 25% of the costs until they reached the donut hole, then they were responsible for 100% of the costs until they reached the catastrophic coverage threshold.

That amount gradually declined over the last several years, and the donut hole closed one year early — in 2019, instead of 2020 — for brand-name drugs. (So, enrollees in standard plans paid 25% of the cost of brand-name drugs from the time they met their deductible until they reached the catastrophic coverage threshold.) Enrollees also pay 25% of the cost of generic drugs while in the donut hole in 2020, down from 37% in 2019.

The donut hole is still relevant in terms of how drug costs are counted towards reaching the catastrophic coverage threshold, and in terms of who covers the costs of the drugs (i.e., the drug manufacturer or the enrollee’s Part D plan).

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Social Security and Supplemental Security Income

The Social Security Administration announced last month that benefits for about 70 million Americans will increase by 1.3% in 2021. The increase in benefits is a cost-of-living adjustment that will begin in January of the new year.

The Social Security Act ties the annual cost-of-living adjustment increases to the Consumer Price Index, which is determined by the Department of Labor’s Bureau of Labor Statistics.

Most Social Security and SSI beneficiaries will be able to view their cost-of-living adjustment notice online through their personal My Social Security account. In order to create an online account, beneficiaries can go to www.socialsecurity.gov/myaccount.

For more information on how the cost-of-living adjustment increases are calculated, visit www.socialsecurity.gov/cola or read my recent article on the subject.

Provided by the SSA, other important information for the 2021 year is as follows.

Retirement Earnings Test Exempt Amounts

Under full retirement age*

2021: $18,960/yr. ($1,580/mo.)

2020: $18.240/yr. ($1,520/mo.)

*One dollar in benefits will be withheld for every $2 in earnings above the limit.

 

The year an individual reaches full retirement age**

2021: $46,920/yr. ($3,910/mo.)

2020: $50,520/yr. ($4,210/mo.)

Social Security Disability Thresholds

Non-Blind

2021: $1,310/mo.

2020: $1,260/mo.

Blind

2021: $2,190/mo.

2020: $2,110/mo.

Maximum Social Security Benefit: Worker Retiring at Full Retirement Age

2021: $3,148/mo.

2020: $3,011/mo.

SSI Federal Payment Standard

Individual

2021: $794/mo.

2020: $783/mo.

Couple

2021: $1,191/mo.

2020: $1,175/mo.

Estimated Average Monthly Social Security Benefits Payable in January 2021

All Retired Workers

2021: $1,543/mo.

2020: $1,523/mo.

Aged Couple, Both Receiving Benefits

2021: $2.596/mo.

2020: $2,563/mo.

Widowed Mother and Two Children

2019: $3,001/mo.

2020: $2,962/mo.

Aged Widow(er) Alone

2021: $1,453/mo.

2020: $1,434/mo.

Disabled Worker, Spouse and One or More Children

2021: $2,224/mo.

2020: $2,195/mo.

All Disabled Workers

2021: $1,277/mo.

2020: $1,261/mo.

Gift Tax Annual Exemption   $15,000

Gift Tax Lifetime Exemption  $11,580,000