TSCL Pushes For Emergency COLA
After a year without a cost-of-living adjustment (COLA), Social Security beneficiaries are finally getting a boost in January. But the increase, if it can be called that, is so small that it’s the lowest ever paid — 0.3%. The COLA will raise every $1,000 in benefits by just $3.00 and, for retirees 65 and over, may be completely offset by increasing Medicare Part B premiums.
Very low, as well as no COLAs not only affect Social Security benefits; the amount of an individual’s COLA also affects the amount of the Medicare Part B premium that he or she pays. When the annual COLA is very low (or zero), a provision of law known as “hold harmless” is triggered. Under that provision, when an individual’s Social Security COLA is insufficient to cover the increase in the Medicare Part B premium, the Part B premium is adjusted so that one’s Social Security benefit isn’t reduced from one year to the next. The provision only applies to the people who have Medicare Part B premiums automatically deducted from their Social Security payments — about 70% of Medicare beneficiaries.
But the money to cover the beneficiaries’ share of Part B premium costs still has to come from somewhere. That leaves the 30% of Part B enrollees who aren’t protected by hold harmless to shoulder the entire burden of rising premiums through steeply higher Part B premiums. Many of those people are facing a Part B premium increase from $121.80 per month to an estimated $149.00, the highest increase in 27 years. Those who are not protected by the hold harmless provision include:
- Medicare Part B enrollees who pay by check and don’t receive Social Security benefits. This includes people who have delayed benefits and are still working.
- Higher-income beneficiaries. People with modified gross incomes above $85,000 (individuals) or $170,000 (couples) in 2016 are required to pay higher Part B premiums.
- Low-income beneficiaries who receive Medicaid in addition to Medicare. State Medicaid programs pay the Part B premiums for people who qualify due to low income and resources.
- New Medicare Enrollees in 2017. Because these people are new to Medicare, they pay the full amount in 2017 when they sign up.
TSCL recently sent a letter to every office in Congress calling for an emergency COLA to prevent the spiking Medicare Part B premium and deductible, and asking Congress to consider legislation that would result in more accurate COLAs.
“This year’s zero COLA combined with next year’s insufficient increase will have a devastating impact on the long term adequacy of Social Security benefits for millions of Americans … we hope that you will act swiftly and responsibly before the end of this year,” the letter stated. To learn how you can get involved in the effort, sign the online petition today.