Home

Ask The Professor

Ask the Professor any questions you have about Medicare. We read all questions and will contact you via email when your answer is completed.

Medicare Lessons

Medicare Lessons

Medicare News

Medicare News

Testimonials

Testimonials about MedicareU.com

  • From Elaine in Lafayette
    "MedicareU is the only place I've found where something as complex as Medicare is explained in...
  • From Linda in Park City
    "When my mother died unexpectedly, I became the primary caregiver for my father who has Alzhei...
  • From Gino in Allentown
    "What a great site! I got all of my questions answered and was able to use what I learned to p...
Retirees May See a Big Boost in Benefits PDF Print E-mail
Saturday, 16 August 2008 15:36

Senior citizens can look forward to a major increase in Social Security benefits next year. Unless there is a sudden rush of deflation in the current quarter, the increase will be the largest in 25 years.

That's right: the largest in 25 years. Last year, the increase was a very pinched 2.3 percent. Indeed, there hasn't been an increase over 5 percent since 1990.

Just how big will the increase be?

Try 6 percent.

To be more precise, it will be 5.7 percent if the summer holds no inflation. That means if the Consumer Price Index doesn't budge for July, August and September. The benefit increase will be 6.1 percent if inflation runs at the 0.2 percent "core" rate for the same period. And it will be more if inflation is higher than the core rate. The last time there was a larger increase was 1982, when it clocked in at 7.4 percent.

The 6 percent figure was not found in my personal crystal ball.

Anyone can make a very good estimate of future benefit increases simply by reading how the annual benefit increase is calculated by the Social Security Administration and then plugging in the Consumer Price Index figures as they are released.

Here's how it's done.

The Social Security Administration uses the CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers, as its inflation benchmark. To figure the annual increase, it averages the CPI-W index figures for the third quarter of the previous year and divides that figure into the corresponding figure for the current year. January 2009 will be the first month retirees see the increase in their checks.

Last year, the index declined slightly from 203.906 in June to 203.700, 203.199, and 203.889 for July, August, and September. That's an average of 203.596 for the quarter.

By June of this year, the index had risen to 215.223. So if the index is unchanged for July, August and September, the increase will be 5.7 percent. Have the June index rise by 0.002 each month for core inflation, and the benefit increase will be 6.1 percent. If the index figure rises more over these three months, the benefit increase will exceed 6.1 percent.

Still complaining

Could the increase be significantly smaller? Sure. But it would require declining prices.

Will retirees be happy with the increase? I doubt it.

My reader mail regularly contains letters from retirees complaining that those in Washington must be smoking something (or at least cooking the books) to come up with their notion of inflation. Some send changes in their home or auto insurance rates, the cost of electricity, or the cost of their prescriptions. Whatever the facts, the conclusion is the same: The CPI doesn't measure the inflation retirees face. For the record, I think they are right. Medical expenses loom large for retirees.

If you are one of those seniors, however, I have a suggestion: Bite your tongue. Remember the old saying, "I complained that I had no shoes until I met a man who had no feet."

Worker wages

The workers who pay the bills – including Social Security and Medicare benefits – are doing poorly this year.

Worker wages appear to be rising at about a 3 percent annual rate. That's about half the inflation rate. Medical benefits continue to be squeezed, and medical insurance costs continue to rise. It's not a pretty picture out there in 24/7 land. And that's not counting the workers who no longer have jobs.

Worse, this isn't a one-year problem. So far this century, retirees are doing as well as workers, perhaps better. Including the 6.1 percent estimate for the 2008 benefit adjustment, retirees will have seen their benefits rise slightly more than workers' wages have risen since 2000. This may seem OK to some retirees, but it's not. Workers are working. They are supposed to be rewarded for rising productivity. But they aren't.

It's beginning to look like the best way to get a good raise is to retire.

Scott Burns was a Dallas Morning News columnist for 21 years. Today he is a syndicated columnist and a principal of Plano-based investment firm AssetBuilder Inc. E-mail questions to scott@ scottburns.com.

Last Updated ( Saturday, 16 August 2008 15:45 )
 
Does Medicare Cover You While Traveling in a Foreign Country? PDF Print E-mail
Written by Dr James   
Friday, 08 August 2008 06:13

We’ve received several questions in recent weeks about Medicare coverage and foreign travel.  For the most part Medicare does not cover health care services received outside of the continental United States, as well as the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. 

There are specific scenarios when Medicare will cover services received in a foreign hospital.  For instance, in the event of a medical emergency, Medicare may pay for services received from a Canadian hospital if you are traveling between the continental U.S. and Alaska.  To qualify for Medicare coverage, the foreign, Canadian hospital must be closer than the nearest U.S. hospital capable of treating the illness or injury.  Furthermore, the covered person must have been traveling by “the most direct route between Alaska and another state” and without “unreasonable delay.”  Medicare determines if the “unreasonable delay” requirement is met on a case-by-case basis.

So what are your options if you will be traveling abroad?  First, check with your insurance company if you have a Medicare Supplement (Medigap) plan or if you are enrolled in a Medicare Advantage plan.  It is possible that your policy may offer some foreign travel provisions.  You might also consider contacting a local travel agency.  Travel packages purchased from a travel agent often come with short-term health insurance policies designed for foreign settings.  Even if your trip is not part of a tour package, the local travel agent can probably help you contact an insurance company that will sell you a short-term, foreign travel health insurance policy. 

 
 
 
 
 
 

 

 

Official Medicare Documents

We've provided a number of Medicare publications that might be helpful to you. Unfortunately, government publications are not always easy for the average person to understand. If you do have trouble understanding anything you read in the documents listed below, feel free to Ask The Professor. We can help you interpret Medicare rules and apply them to your circumstances.