Social Security establishes the age at which workers and their families may begin receiving retirement benefits. If you were born before 1938, this is set at age 65. If you were born between 1938 and 1954, the full retirement age increases progressively from 65 up to 66. If your birth year is 1955 or later, your full retirement age increases progressively up to 67. Age 67 is currently the oldest full retirement age though this could increase in the future.

Many people ask me if they will lose their social security benefits if they stay on the job or go back to work. With the economy being as it is, many older adults have put off retirement and are working past the time planned. If you have reached full retirement age you will not lose your benefits. This is the result of legislation passed in 2000.

Only those under full retirement age and already receiving Social Security Retirement Benefits are affected by the following (2008) limits. For that group of individuals the formula is as follows:

If you are under full retirement age you can earn up to $13,560 without penalty. For every $2.00 over the limit your benefits will be reduced by one dollar. If you are reaching full retirement age this year, you can earn up to $36,120 without penalty. Your benefits are reduced by $1 for every $3 earned over the limit. For example, if you earn $40,000 a year and your Social Security payout is $13,000 a year, that payout would fall by $1,293 (about 10%) to $11,707.

Again, if you have reached full retirement age, there is no penalty for earned income.

If you can make do without Social Security benefits until age 70, you will receive a larger monthly benefit. When they begin, monthly benefits will be increased substantially above the base full retirement age, increasing at about 7 to 8% for each year of delay beyond full retirement age. Conversely, if you begin before reaching your full retirement age, the monthly benefits are paid at a permanently reduced amount (up to 20 to 25% less) to reflect receiving benefits for more years.

Another question is whether an individual will continue to receive Social Security benefits as a widow (or widower) if that person remarries. The answer is yes, if you are at least 60 when you remarry. (A widow or widower isn’t actually eligible for benefits until age 60 or, if disabled, until 50.) Or you could apply to receive benefits based on your new spouse’s work record instead if those benefits would be higher. If you remarry before turning 60, however, you will be ineligible for widow’s benefits throughout your marriage.

In order to understand the permutations of Medicare Part D, you must have a Lewis Carroll like sense of the absurd and a gift for games of logic and language.Hopefully this blog will give you the keys to unlock the mysterious door to this provision and help you determine when you will go into the hole and when you will come out of the hole.

What is Medicare Part D?

Medicare offers prescription drug coverage for everyone with Medicare. This is called “Part D.” This coverage may help lower prescription drug costs and help protect against higher costs in the future. It can give you greater access to drugs that you can use to prevent complications of diseases and stay well.

If you join a Medicare prescription drug plan, you pay a monthly premium. Part D is optional. If you decide not to enroll in a Medicare drug plan when you are first eligible, you may have to pay a penalty if you choose to join later.

There are two ways to get Medicare prescription drug coverage. You can either join a Medicare prescription drug plan that adds coverage to the original Medicare plan, or join a Medicare Advantage Health Plan (like an HMO or PPO) that includes prescription drug coverage. You get all of your Medicare health care including prescription drug coverage through these plans.

Medicare Advantage Plans (like HMOs and PPOs) that include prescription drug coverage as part of the plan are health plan options that are approved by Medicare but run by private companies. They are part of the Medicare Program. If you join a Medicare Advantage Plan you are still in Medicare.

What is the donut hole?

The standard Medicare Part D benefit includes an initial $295 deductible. After meeting the deductible the beneficiaries pay 25% of the cost of covered Part D prescription drugs, up to an initial coverage limit of $2,700. Once the initial coverage limit is reached, beneficiaries are subject to another deductible, known as the “Donut Hole,” in which they must pay the full costs of drugs.

When total out-of-pocket expenses on formulary drugs reach $4,350 – including the costs of the deductible and coinsurance, beneficiaries reach the “Catastrophic Coverage” benefit.  Beneficiaries entitled to Catastrophic Coverage pay $2.40 for a generic or preferred drug and $6.00 for other drugs, or a flat 5% coinsurance, whichever is greater. This out-of-pocket amount is calculated annually. Beneficiaries who reach the out-of-pocket threshold in one year have to begin to meet it again on January 1st of the next year.

Only certain costs, such as money spent on formulary drugs (or non-formulary drugs that have been granted an exception by the plan), costs paid by the beneficiary’s family, a charity, or a State Pharmaceutical Assistance Program such as ConnPACE, count toward the true out-of-pocket spending requirement.

Costs paid for non-formulary drugs, cost of drugs purchased outside the United States, costs paid for by other insurance, including ADAP plans (CADAP in Connecticut), and Premiums paid to the Part D plan, do not count towards the requirement.

Do Medicare Prescription Drug Plans have Doughnut holes?

Each state offers at least one plan with some type of coverage during the coverage gap or donut hole. However, plans with gap coverage may charge a higher monthly premium so as to provide more coverage during the gap which occurs in many plans. Some plans may only offer generic drug coverage during the gap.

Tip: On your monthly statements from your Medicare Part D provider, follow the cost of your prescription, amount paid by your plan, amount paid by you.

Resources:  http://www.medicareadvocacy.org/PartD_DoughnutHole.htm

“Find & Compare Plans that Cover Drugs” [Medicare]

I was in a car accident a couple of years ago and injured, among other parts of my body, my lower back. I can’t talk about the case in any more detail, but I can say that the defense attorney who told me that my injuries were not injuries at all. He said they were natural age related changes to my infrastructure, but he was a j— , (I need to be kind here) and severely misguided. One thing that I learned in my grad school physiology class is that there are few age related diseases. Many less than imagined.

First, many of the ailments that we encounter as we age are not as much age related as they are lifestyle related. For example, take Type 2 Diabetes. Yes, that is more prevalent in the older adults, in fact it is often referred to as “adult onset diabetes,” but it is not a necessary evil.

In fact, Type 2 Diabetes is also increasing dramatically among children, adolescents and younger adults. That’s probably because with older adults, there is a tendency to exercise less, lose muscle mass and gain weight. Many kids today are corn syrup and Nintendo DS junkies (but of course, not mine.)

In a nut shell, people with Type 2 Diabetes can’t make or respond to insulin properly. Insulin works like a key that opens the doors to cells and allows the glucose in. Without insulin, glucose can’t get into the cells and so it stays in the bloodstream. As a result, the level of sugar in the blood remains higher than normal.

With Type 2 Diabetes, insulin is still produced but the body doesn’t respond to the insulin normally. Glucose is less able to enter the cells and do its job of supplying energy. This in turn, causes the blood sugar level to rise, making the pancreas produce even more insulin. Eventually, the pancreas can wear out from working overtime to produce extra insulin. Then, the pancreas may no longer be able to produce enough insulin to keep a person’s blood sugar levels within a normal range.

What does a healthy lifestyle have to do with this process? Being overweight raises your insulin resistance and the kind of food that you eat can affect your blood glucose levels. It stands to reason that if you exercise the resulting decrease in body fat will result in improved insulin sensitivity.

So, dad (if you are reading this blog) please stop eating hot dogs and ribs and cherry pie because I love you. And, while you are at it go take a swim or something. On the other hand, you are almost 80 so go ahead and feast upon your fatty favorites and enjoy your day sitting at the race track. I love you and I want you to be happy and live life on your terms, but please don’t forget to take your Vytorin after!