2890 N. Main Street, Suite 206 • Walnut Creek, CA 94597

Changes to Social Security, Medicare, Medi-Cal and Estate Tax Rates for 2018

Each year, the Social Security, Medicare and Medi-Cal programs have the potential to adjust rates for programs that benefit many of our clients, who are dependent, at least partially, on these programs for support or care.  We think it is helpful to review some of the changes to these programs this year.

The Social Security Administration annually issues a Cost of Living Increase (COLA) tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), that applies to Social Security and Supplement Security Income (SSI) benefits.  For 2018, there is a 2% increase in benefits, effective beginning with checks received in January.

For recipients who receive combined federal SSI benefits and state supplemental payment (SSP) benefits, the combined benefits for aged and disabled in independent living increased for 2018 to $910.72 (up $15) for a single person and $1,532.14 (up $22) for a couple. SSI monthly benefits for non-medical board and care increased to $1,173.37 (up $15).

The federal Medicare program also has moderate increases in some programs in 2018, including increased benefits and increased premiums.  These increases include:

Medicare Part A

Hospital Deductible (days 1-60)                              $1,340  ($24 increase)

Co-insurance per day (days 61-90)                        $335 ($6 increase)

(days 91-150)                       $670 ($12 increase)

Skilled Nursing Facility (SNF) co-insurance           $167.50 per day, days 21-100 ($3 increase)

Medicare Part B

Premium per month                                                 $130 – $428.60 (based on income)

Deductible per year                                                   $183 ($17 increase)

The California Medi-Cal program (California’s version of the federal Medicaid program) has several key rates that are used in determining eligibility and payments for the Medi-Cal program.  The new resource rates for 2018 include:

Community Spouse Resource Allowance (CSRA)                             $123,600

Minimum Monthly Maintenance Needs Allowance (MMMNA)               $3,090

Average Private Pay Rate (APPR)                                                         $8,515

While these increases are not dramatically different from what existed in 2017, they can have an impact for anyone who is already receiving or contemplating government assistance.  If you think that you or a loved one may need or would benefit from receiving government benefits in the near future, we encourage you to come in to talk to us about estate planning that could help with eligibility and resource preservation in the context of receiving those government benefits.

Changes in Estate and Gift Taxes in 2018

The new tax law recently passed in Washington D.C. generated a lot of news and a lot of information was passed along through the media and other sources regarding the impact of the new law.  We thought it would be helpful to give a brief summary of the laws that will impact estate planning in the near future.

The new law has increased the annual gift tax exclusion to $15,000.  This is a $1,000 increase over the $14,000 rate that existed since 2013.  The annual gift tax exclusion allows an individual to gift up to $15,000 per year per person without reporting the gift to the IRS.

The new law also increases the lifetime estate and gift tax exclusion amount to $11.2 million (up from $5.49 million) per individual or $22.4 million per married couple.  This rate will be in effect with annual adjustments for inflation, until 2025, when it will revert to the pre-existing law, unless Congress takes action to change it or continue it beyond 2025.

2890 N. Main Street, Suite 206
Walnut Creek, CA 94597


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