Retirement Changes: Health Care, Social Security, and Medicare in 2014

How much do you know about the three largest learning curves that most retirees must face? In dealing with health care costs, Social Security, and Medicare, there are hurdles that can entangle even the savviest retirement-planner, especially when it comes to tracking rules and yearly changes.

Some changes are at the top level, while others occur deep down in the guts of these systems. And with the advent of the Affordable Care Act, early retirement for many is a whole new landscape yet again.

The start of 2014 is a perfect time to look at the new issues. We'll highlight the changes, breaking out their effects on those who are either part of, or preparing to join, life after work. We'll be guided in part by insights from Daniel Beland, a professor of public policy at the University of Saskatchewan, Canada, and an expert on the U.S. Social Security and Medicare systems.

Impact watch: ACA and retirees
It's still too early to forecast all of the long-term effects of the ACA, and there's still enough political energy crackling around the subject to make it more than a little bit bewildering. While most Medicare recipients won't interact with the law directly, early retirees may when it comes to setting up health insurance plans.

For those people, here some of the key points about the Affordable Care Act:

  • Typical problems that older individuals experience with getting accepted into a new health care plan -- challenges often based on age and the likelihood they'll need age-related medical care -- could ease with the advent of the ACA's new insurance exchanges. Early retirees who can take health insurance from a previous employer, however, may find the exchange-based plans out of reach.
  • Premiums should dip lower than those for plans that previously accepted older participants for higher-than-average fees. That's because, theoretically, plans' pools will now be composed of many age groups under the ACA, as opposed to just segments that represent a more frequent demand for services.  
  • Subsidies should also play a significant role in how much you pay for your health care. In some cases the aid available could help cut your premiums by almost 50%. Early retirees -- those under 65 -- can use this online calculator to get an idea of what subsidies can do for your coverage costs.

Social Security changes to note in 2014
There haven't been significant Social Security reforms introduced since 1983. Still, early retirees especially will see some differences this year. And everyone gets a cost-of-living increase to his or her Social Security check this time around. It's a small one, but upticks haven't always happened in recent years.

Here's what you need to know:

  • If you're under age 65 and collecting benefits, expect to see a dip of $1 for every $2 of wage- or salary-based income you earn beyond $15,480. For those reaching full retirement age in 2014, the dip will be $1 for every $3 earned until the month of your birthday. 
  • The cost-of-living increase to Social Security checks will be a modest 1.5%. If you were expecting about $2,000 per month, you can now look for approximately $2,030. 

In news for those who haven't yet retired, the federal government has this year adjusted what you can expect to pay into the Social Security system as well. The cap on the earning maximum, in terms of what gets taxed for Social Security, increases 3% from $113,700 to $117,000.  

You can see a comprehensive list of 2014 Social Security changes here.

Medicare: ACA impacts and inpatient increases
Key changes to Medicare this year come under the category of ACA impacts. There are also new developments in the area of deductibles and co-pays for patients staying at hospitals.

  • Medicare under the ACA should now cover certain procedures such as mammograms and colonoscopies. No Part B deductibles for these. No Part B co-pays either.
  • Brand-name drugs covered by Medicare Part D should come with a 50% discount.  
  • Those without a premium-free Part A plan will see their deductible increase to $1,216 from $1,184.  
  • Co-pays for beneficiaries for inpatient care increase to $304 per day for 61 to 90 days, then $608 for days beyond that. That's an $8 and $16 bump, respectively.  

On a larger scale, the federal government says the good news about Medicare is that the ACA's cost savings and loss-reduction measures will ensure that the trust fund fueling the system can be sustained until at least 2029.  

Changes to come
Apart from the ACA changes, don't let the appearance of incremental shifts in other areas lull you into a false sense of permanency. Experts such as Beland say that additional transformations of these three systems could well come sooner than later.

The U.S. population is aging -- the number of citizens age 65 and older is expected to double to 89 million by 2050. And the long-term fiscal challenges that an older citizenry presents stands to prompt Capitol Hill lawmakers in ways that tend to get their attention -- on their line items, in their budgets.

However that plays out, it will likely mean the most to upcoming retirees. Now is the time to start paying attention to these yearly changes to health care, Social Security, and Medicare. They can add up, and noting the flow of that addition will help protect you against surprises down the road.

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  • Report this Comment On February 16, 2014, at 12:49 PM, syclonedave wrote:

    Socialist health care has no place in a free America. It's illegal, biased,unwanted,unaffordable, and only designed to bankrupt the middle class. Millions of Americans will die prematurely because they wont be visiting doctors as often because it covers very little and is unaffordable. Obama promised us that if you built it or own it....it's not yours. As of January, you are now seeing your wealth being taken away in another form of welfare and its only going to get worse as mandates kick in.

  • Report this Comment On February 16, 2014, at 1:37 PM, PaulSell wrote:

    When asked specifically about the "cooking of the books" on OB☭M☭C☭RE ● enrollment numbers, Kathleen smiled and said, "Pull my finger." When the exact question was also posed to Barry, he tucked in his chin and gave a big toothy smile and said, "I just love that Yahoo picture of me with the Great Seal behind my pointy head, that looks like a halo on me. In addition I just want you all to know, "I have a Bic Pen and an Obamaphone."

    Republicans are now just waiting for Barry & Company to work the kinks out of his legacy legislation OB☭M☭C☭RE●! After all this isn't just more of your Dear Leader's shuck and jive stuff, this is about millions of people's lives. The Republicans have promised to get right on immigration, as soon as

    OB☭M☭C☭RE● smoothes out with the millions of lives it has disrupted. Barry was quoted as saying, "When I go out and say the, "You like it you can keep it's... for years and still just as recently as the SOTU, constantly fudge my numbers and get 4 Pinocchios from the Washington Post the next day for it, I JUST CAN NOT UNDERSTAND WHY "YOU PEOPLE" STILL DON'T BELIEVE MY SHUCK & JIVE SH!T ANYMORE? I know you're all struggling and I want you to just reflect back to Christmas. It only cost you tax paying suckas' $800,000 to bring my main squeeze "Snuff Lip" back from her extended stay in Hawaii. Now, for you millennials: "Welcome to YOUR OB☭M☭C☭RE●! The Liberals, that now have to survive re-election with this albatross hanging around their socialist necks, STILL have to convince you soft headed millennials into another suicide vote for them again. Maybe we, Barry & Company, can just chat up Pot Legalization, minimum wage increase, and Income Inequality, while carefully avoiding your slim to none chances at even getting a job. We Dems are still just going to encourage you boneheads into believing that the lying Dems are actually going to make your lives so much better."

    OB☭M☭C☭RE ● NOW has DEATH SPIRAL written all over it. I do hope the Republicans are meeting with Insurance Companies, as I write, figuring out how to defuse this Economic time bomb, when they regain the Senate in 2014 with their new plan.

  • Report this Comment On February 16, 2014, at 1:59 PM, roxander wrote:

    there is only one way to stop these rotten politicians from being elected over and over the same type of personality is elected america reminds me of girl who kept picking the worst man possible to fall in love with .but there is a way out we Americans need a new voting system a yearly election designed to weed out the bums that we have wrongly elected every year we will hold an election for all politicians vote out the bad its the only way.

  • Report this Comment On February 16, 2014, at 2:46 PM, rukidnme wrote:

    So social security payments are dipping down? You've got to be kidding. Folks have worked hard all their lives paying into something they'll never get their moneys' worth out of and the amount they get continues to be reduced (in some way, shape or form?) Shame on the rich politicians for this travesty of justice.

  • Report this Comment On February 16, 2014, at 2:46 PM, ruffus wrote:

    ya you really think rinos have a better health plan lol what a joke they are to busy EATING THEIR OWN what they do best.

  • Report this Comment On February 16, 2014, at 7:26 PM, TMamboJazz wrote:

    Most of the comments are from ignorant folk thats comments are based on there own biases and not the facts. Most probably have not even reached retirement age.The facts are the GOP is the party for the rich and are not interested in supporting ACA, SS, nor Medicare nor any other program that benefits the 99%. If they did they would have done something about it during the Reagan, Bush I and Bush II years they occupied the White House. The US findly got a President and Congress to do something about health care in this country for the 40 million people that have no health care.

    Slanciano is the most ignorant of all. White people receive more government assistance than any other group of people from food stamps to farm subsidies. Also most businesses that are owned by Whites that pay the minimum wage or below are being subsidized by the taxpayers.

  • Report this Comment On February 16, 2014, at 7:36 PM, altha2008 wrote:

    Earn income is decrease when you get social security, not passive income.

    brought tax lien certificates a long time ago letting it double and double every 5 years.

    buy one income property.

  • Report this Comment On February 16, 2014, at 9:28 PM, i9o0cvfe4r wrote:

    .Obama supporters will go hysterical over this well sourced list of 557 examples of his lying, lawbreaking, corruption, cronyism, etc. http://danfromsquirrelhill.wordpress.com/2013/08/15/obama-25...

  • Report this Comment On February 16, 2014, at 11:09 PM, maxineB3 wrote:

    Guess I'm out of luck for any subsidies or any health insurance at all. My income is only 70% of poverty level. Nothing new there, I haven't had health insurance for over 3 years. I would like to see them fine me for not having any health insurance. Can't blood out of a turnip.

  • Report this Comment On February 17, 2014, at 7:57 AM, DrG wrote:

    Medicare Advantage Plans have been cut in some way. United HealthCare cut a LARGE number of providers and others raised co insurance, co pays and increased fees for eye and dental plans. The subsidy to these plans was cut as a part of ACA.

  • Report this Comment On February 17, 2014, at 9:10 AM, gramma77 wrote:

    At 77 have been on SS since retiring(forced) turning 62, in good health, husband is 75 retired at 62 (gets a pension) & started on SS then. His health is poor. Lived in FL for 7 yrs, had Humana there, it was a great plan! Moved to MA to be closer to youngest daughter and grandkids. Got UHC for 2 yrs., dropped them this year and have Tufts, it is a great plan but it is a HMO, so we have to get referrals.

    obamacare was supposed to insure the people that could not get insurance, but it has disrupted the greatest medical care in any country. Costs are anything but affordable, high premium and huge deductibles, which makes this the MOST INSANE policy ever put forth on the Middle Class Americans.

    This POTUS is following Saul Alinsky rules, 1) control healthcare, control the people; 2) increase the poverty level, poor people are easier to control, his whole mission is CONTROL, and if people cannot understand this then we can say good-bye to our America!

    WAKE UP PEOPLE of AMERICA!!

  • Report this Comment On February 17, 2014, at 9:20 AM, lm1b2 wrote:

    Retires were told by Obama,and the democrats that are medicare would not be affected by Obamacare,we were lied to,and they took out money from medicare to help pay for Obamacare.My wife,and i lost our COLA,plus this year,it went for our increases in our insurance(Anthem) that we were assured would not be affected,plus almost almost all of our Co-pays went up.I hope that all the retires remember that when it comes election time,and vote accordingly !

  • Report this Comment On February 17, 2014, at 10:59 AM, GERONIMORULES wrote:

    NewsFlash: Obama Lied! It's okay, since he's a Democrat. Bush lied! How dare he, since he's a Republican? THERE IS A DOUBLE STANDARD.

  • Report this Comment On February 17, 2014, at 2:15 PM, mimigloves wrote:

    I think that your information might contain a mistake. You state that "if you reach full retirement age in 2014 the dip will be $1 for every $3 earned until the month of your birthday". I am not sure what you mean by dip. If you mean you must pay back SS then this is not correct. If during 2014 you become 66, which is your full retirement age, you are able to earn up to somewhere around $40,000 prior to your birthday without any penalty or pay back.

  • Report this Comment On February 17, 2014, at 4:42 PM, phwly wrote:

    No, rukidnme, Social Security payments are not dipping down. Reread the article. Because Social Security retirement benefits are RETIREMENT benefits, if you work over a certain limit ($15,480 this year), your benefits are reduced $1/$2 or $1/$3 that you earn over that limit depending on your age. This is nothing new. They are just advising people on Soc. Sec. who choose to work that the new, raised limit is $15,480.

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