Taxes, Postage, and Medicare Updates

Initiative and Program Updates that have come into being in 2024 and also 2025 under the Biden Administration impacting Elderly Economics. The reporting is by AARP. Some of those who have passed into history that caught my eye too.

Federal Income Tax Brackets for 2025

In the U.S. tax system, income tax rates are graduated, so you pay different rates on different amounts of taxable income. There are seven federal income tax rates in all: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent. The more you make, the more you pay.

A tax bracket is a range of income that’s taxed at a specified rate. Importantly, your highest tax bracket doesn’t reflect how much you pay on all of your income. If you’re a single filer in the 22 percent tax bracket for 2025, you won’t pay 22 percent on all your taxable income. You will pay 10 percent on taxable income up to $11,925; 12 percent on the amount between $11,926 and $48,475; and 22 percent above that (up to $103,350)

In addition, the 2025 standard deduction will be $15,000 for single filers and $30,000 for married couples filing jointly, up from $14,600 and $29,200, respectively, for 2024. The standard deduction is the fixed amount the IRS allows you to deduct from your annual income if you don’t itemize deductions on your tax return. The lower your taxable income is, the lower your tax bill.

There is good news for older taxpayers. Single filers 65 and older can increase their standard deduction by $1,600 per person. Joint filers can increase their standard deduction by a combined $3,200. In total, a married couple 65 or older would have a standard deduction of $33,200. 

You can itemize individual tax deductions, for things like charitable donations. They will need to add up to more than the standard deduction to make itemizing worthwhile.

If you have been hit with a big tax bill in the past? Consider talking with a tax adviser about how to reduce your next tax bill. A good first step is to look at how much tax is being withheld from your paycheck. It might be easier to have a little more money withheld from each paycheck than to face a big tax bill on April 15. The IRS has a free withholding estimator that can tell you how much you should have taken out. You can also try AARP’s tax calculator for free.

Beware Surge in Fake Postage When Buying Stamps

This has been going on for a while. I see Facebook has eliminated the advertisements. Stamps at 50% off is a scam. It is not wise to mess with the US Post Office.

A Forever stamp now costs 68 cents. The price that may tempt some bargain hunters to look for discounted stamps online. Unfortunately, that’s a good way to end up with counterfeit U.S. postage. A growing crime involves fake U.S. stamps printed overseas and smuggled into this country for sale online. The fraudulent activity hits the U.S. Postal Service (USPS) with multimillion-dollar revenue losses and leaves unwitting buyers stuck with worthless fake postage.

Increase in fakes 

The counterfeiting of U.S. Forever stamps can be used to mail a one-ounce letter “forever.” This is so even if prices rise. says Jay Bigalke, editor in chief of Linn’s Stamp News in Ohio. U.S. flag stamps are most often counterfeited, according to Bigalke, as are many commemoratives. In 2023 he published a catalog of about 750 different Forever counterfeits, most from the last 10 years. Since then he’s identified at least 200 more. “It’s hard to keep up,” he says.

USPS confirms the recent uptick in fake-stamp schemes: “Within the past three years there has been an increase in sort of high-quality counterfeits originating overseas,” says Michael Martel, a postal inspector and agency spokesman for the U.S. Postal Inspection Service, USPS’s law enforcement arm.

Fake postage labels on packages is another problem. A 50-year-old Los Angeles woman who ran a shipping-and-postage firm was charged last year. Allegedly she was using counterfeit postage to ship more than 9 million pieces of mail over six months. A scam that authorities said cost USPS more than $60 million.

Fighting postage fraud

Last year a new rule to attack the problem took effect. The USPS to consider mail affixed with counterfeits “abandoned,” and then destroy it. USPS spokesman Albert Ruiz declined to say definitively whether, under the new rule, any such mail had been destroyed.

The good news: Some perpetrators do get caught. A South Carolina case resulted in guilty pleas last year from Bruce and Lisa Quimby. They purchased counterfeit Forever stamps from China to sell online. Authorities said the pair stole $609,900 from buyers of the fake postage.

How to tell if stamps are fake

Advances in printing makes it “difficult” to distinguish a real stamp from a fake. That is unless you know what to look for. Bigalke adds, counterfeiters even have been able to replicate coding on stamps to “trick” postage-cancellation machines. Then the devices don’t reject the mailings. USPS says it uses several methods and indicators to determine if postage is counterfeit. The USPS will not reveal details, which could “enable the creation of counterfeit postage,” officials say.

Don’t buy stamps that are cheap.

Medicare Extra Help in 2024

Up to 3 million Medicare enrollees with low incomes and limited resources were eligible in 2024 for additional financial assistance for Part D prescription drug costs. Federal officials are informing older adults and people with disabilities know about the Extra Help program and it’s expansion.

Health and Human Services (HHS) estimates nearly 300,000 people on Medicare  currently enrolled in Extra Help only get partial benefits. They were eligible for the full benefit in 2023 under a provision of the prescription drug law signed in August 2022. They will pay no deductible for their Part D medications. Additionally, no premiums for their Part D plans and lower copays for some of their prescription drugs.

According to HHS data, nearly 1.8 million Medicare beneficiaries were eligible for the full Extra Help program in 2021. However, they were not enrolled. An additional 1.2 million either were getting partial Extra Help benefits or were not enrolled. They would be eligible for the full expanded benefit in 2024. About 13 million Medicare recipients are currently enrolled in Extra Help.

Threshold

The income threshold for full benefits is 135 percent of the federal poverty guideline ($19,683 for an individual in 2023). In January 2024, the income threshold for full benefits will be raised to 150 percent of the federal poverty level ($21,870 for an individual in 2023).

Individuals in the Extra Help program are responsible for modest copays for their drugs until they reach the catastrophic phase of Part D. After which, they do not pay anything for their drugs. As of 2024, Medicare beneficiaries entering the catastrophic phase will not have to pay anything more for their drugs. In 2025 there will be an annual $2,000 cap on out-of-pocket expenses. This is for everyone getting their medications through a Part D or Medicare Advantage plan. 

Social Security Administration (SSA): In addition to an annual income limit, the program includes a resources test. According to SSA, to qualify for Extra Help in 2023 an individual must have resources of less than $16,660. A married couple’s resources can’t be any more than $33,240.

Medicare Prices Lowered on 64 Prescription Drugs

The coinsurance rates for certain Part B medications are being lowered temporarily.

Some people with Medicare will pay less for their prescription medications from July 1 to September 30, the U.S. Department of Health and Human Services (HHS) announced.  

The agency identified 64 drugs used by more than 750,000 Medicare enrollees annually where prices increased risen faster than inflation. Under the prescription drug law passed in 2022, the coinsurance rates for these medications will be adjusted to match the inflation rate. This means some people with Medicare could pay less out of pocket through September. What’s more, the makers of these drugs will face penalties for the price hikes in the form of a rebate to Medicare.

“Everyone should be able to afford their medication. The Inflation Reduction Act continues to deliver on this goal to improve affordability. The Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure said in a June 26 statement. “Discouraging drug companies from price increases above the rate of inflation is a key part of this effort, and CMS continues to implement the law to bring savings to people with Medicare.”

Medication Saves

The announcement pertains to Medicare Part B drugs. Medications covered under Part B are typically administered by a health care provider in a doctor’s office or hospital outpatient setting. An example being certain cancer treatments or medications to help fight an infection. According to HHS, some people with Medicare who use the selected 64 drugs may save up to $4,593 per day during the three-month time frame. How much a person has to pay out of pocket for their medications depends on whether they have additional insurance that covers or reduces Part B’s 20 percent coinsurance. 

This is the sixth time HHS has released a quarterly list of Part B medications with prices rising faster than the rate of inflation. Padcev, an advanced bladder cancer treatment has made previous lists costs Medicare nearly $100,000 per beneficiary in 2022. HHS says a beneficiary taking Padcev “may have saved as much as $1,181 from April 1, 2023, through March 31, 2024. This depends on their coverage and course of treatment.”

The makers of these 64 prescription drugs will be invoiced for the rebates they owe Medicare no later than the fall of 2025. These funds will be deposited in the Federal Supplementary Medical Insurance Trust Fund, which HHS says will help to ensure the financial sustainability of the Medicare program for generations.

Reduced Coinsurance for Certain Part B Rebatable Drugs under the Medicare Prescription Drug Inflation Rebate Program

Report: Medicare Enrollees to Save Billions Under Rx Law

The new prescription drug law will save Medicare beneficiaries $25 billion, cut the federal deficit and lead to less need for hospital and other medical care, according to a new analysis by the nonpartisan Congressional Budget Office (CBO).

The CBO report is based on the impact of the three main Rx elements of the Inflation Reduction Act: the ability of Medicare to negotiate the prices of certain medications; drugmaker rebates to Medicare for price increases above inflation; and changes to the Part D prescription drug program, including an annual cap on out-of-pocket costs. The analysis describes the effects of these provisions in 2031.

“This really does demonstrate the cost savings for both seniors and the Medicare program,” says Megan O’Reilly, AARP vice president for health and family issues.

Overall, the CBO report estimates that the new law’s prescription drug provisions will reduce the federal deficit by $237 billion from 2022 to 2031.

Savings for consumers

AARP research and public opinion surveys have shown that the main reason older Americans either don’t fill their prescriptions or take lower doses than prescribed by their doctors is they cannot afford the medications. The CBO report says that the lower prices and costs under the new law will mean people will be more likely to use prescription drugs and that will lead to less spending on other medical care, including for Medicare Part A, which covers hospital care, and Part B, which helps pay for doctor visits and other outpatient services.

CBO finds that Part D enrollee out-of-pocket costs for prescription drugs in 2031 will be $25 billion lower than without the law. Of that, $7 billion will be the result of Medicare’s ability to negotiate certain medication prices, another $5 billion from the rebates drugmakers who raise their prices higher than inflation will have to pay to the program, and $13 billion from the cap on Part D premium increases that starts in 2024 and the $2,000 out-of-pocket cap that will take effect in 2025.

Drugmakers will negotiate

“CBO expects that drug manufacturers will comply with the negotiation process because the costs of not doing so are greater than the revenue loss from lower, negotiated prices.”

Gone Forever

Legendary Grateful Dead Bass Guitarist Phil Lesh Dies at 84. Phil Lesh, a classically trained violinist and jazz trumpeter who found his true calling reinventing the role of rock bass guitar as a founding member of the Grateful Dead, died Friday at age 84.

West Side Story’s Chita Rivera passed away. Anita, the Puerto Rican girl who sings “America” in West Side Story.

NBA Legend Jerry West Dies at 86, Hey, I played parking lot ball, church league ball, YMCA, high school, and a semester in college. Corners and beyond the key.

Kris Kristofferson and James Earl Jones gone too,