What’s Changing For Medicare and Social Security?

For millions of Americans, Social Security, Social Security Disability, and Medicare is a crucial part of their livelihood, but it can also be extremely confusing to understand. Recently, President Obama signed into law a bipartisan budget bill that changes Social Security and Medicare. Regardless of what side of the political aisle you’re on, it’s important to know and understand the changes that were made and how the changes will affect millions of Americans.


Medicare is the federal health insurance program for people who are 65 years or older, it is also available for some younger individuals with disabilities and people who suffer from permanent kidney failure. Medicare has four parts, A, B, C, & D.

  • Part A: Covers inpatient hospital stays, nursing homes, hospice care, and limited home health care.
  • Part B: This is basic medical insurance and covers certain doctors services, medical supplies and preventative services. Changes to be made to Medicare Part B include that some beneficiaries, about 17 million Americans, will pay a premium of $119 per month rather than $159.30. Other beneficiaries will pay the previous premium of $104.90.  Part B beneficiaries will have to pay an extra $3 per month to help pay for a government loan. In 2016, however, all Part B beneficiaries will pay about $166, an approximate 15% increase.
  • Part C & D: Part C is a Medicare Advantage Plan, which is a Medicare plan from a private company who contracted with Medicare. Part D focuses on prescription drug coverage.

For now, the biggest changes to Medicare will affect Part B.

Social Security Disability

Employees, employers, and self-employed people pay into the Social Security system during working years. “When a worker’s earnings stop or become reduced due to retirement, death or disability,” says Marks & Harrison, Attorneys at Law,“social security benefits are paid to the worker or family based on the contributions made during the working years.”

Earlier this summer it looked like Social Security benefits would almost cease to exist by 2016 if changes weren’t made. The administration’s new law reallocates a portion of FICA taxes into the disability trust fund to pay for benefits until 2022. Current disability recipients will continue to receive benefits without interruption, but it’s difficult to say what the future holds for current and future social security disability recipients.

Social Security

Under the new law, a few changes have been made to Social Security including spousal benefits. Right now, a married individual can file for his or her own Social Security benefits if he or she is at full retirement age. After filing for benefits, recipients can suspend benefits while the spouse files for spousal benefits. When doing this, the higher wage earner’s benefits would increase each year. The couple still gets a check, but they ultimately end up getting more money later.

Starting in May of 2016, this option will no longer be available to new filers. Additionally, only those born on or before January 1, 1954, can use the option of choosing to use the spousal benefit at full retirement age (same concept of increasing payments later on).

Although many of the new changes will continue to benefit recipients, the changes may be confusing and recipients should set up an appointment with a professional before all changes become effective.


Author: Matt Rhoney
Cover Image: DigitalCommons