WASHINGTON -- The new year will ring in higher co-payments and larger deductibles for Medicare recipients, but it will bring better paychecks for government workers and members of the military.
Federal employees can look foward to a 3 percent pay raise -- the first salary increase in two years -- beginning with the first pay period in January. As a result, a 'GS-5' clerk typist's pay will increase from $14,390 to $14,822, and a 'GS-14' manager's salary will advance from $44,430 to $45,763.
The military also will get a 3 percent pay hike and federal retirees and their survivors will receive a 1.3 percent cost-of-living adjustment.
Social Security taxes will remain the same in 1987, but the amount of income that can be taxed will increase from $42,000 to $43,800, a move that affects about 8.5 million people.
For recipients of Medicare, the government-sponsored health plan for the elderly, the deductible they pay for hospital stays will increase from $492 to $520 per benefit period beginning Jan. 1. A benefit period begins when a patient enters the hospital and ends 60 days after the patient's release from the hospital.
If Medicare patients remain in the hospital for 61 to 90 days, their co-payment charge will be $130 a day, up from the previous $123 per day fee. For nursing home patients, the first 20 days are free, but days 21 through 100 will cost them $65 a day under Medicare, up from the previous rate of $61.50.
The supplementary medical insurance premium, which covers doctors bills for Medicare recipients, will increase from $15.50 a month to $17.90, but the deductible for the Medicare supplementary program will remain unchanged at $75 a year.
The tax reform law also takes effect Jan. 1, but many of the changes won't be noticed until Americans file their 1987 tax returns in early 1988. The major impact will be felt in lost or reduced deductions in exchange for lower tax rates.
But the deductions -- like write-offs for sales taxes, union dues and in some cases contributions to Individual Retirement Accounts - disappear immediately, while the reduced tax rates will be phased in over two years. As a result, many people may see their federal income taxes increase in 1987.
