A COLA this high is almost unprecedented. This may be the first and the last time that today’s beneficiaries receive a COLA this high. There were only three other times since the start of automatic inflation adjustments that COLAs were higher (1979-1981).
Good News - The Medicare Part B premium is going down in 2023. Medicare Part B —the part that pays for doctor and hospital outpatient services — is automatically deducted from Social Security checks. The standard Part B premium in 2023 will be $164.90, a decrease of $5.20 per month, from $170.10 in 2022. The annual deductible for Part B will also decrease from $233 in 2022 to $226 in 2023. This will mean that most beneficiaries will see more money after the deduction for Medicare premiums.
Bad News - Rising Social Security income due to COLAs can impact Medicare costs down the road. Any increase in the income of a Medicare beneficiary — whether due to COLAs, earnings from jobs, retirement savings, or pensions —could potentially affect what an individual pays in Medicare premiums if income is over certain thresholds.
Tax Implications - The large COLA may push some recipients over an income threshold, requiring them to pay income taxes on part of their benefit. Single filers who have a combined income equal to or below $25,000 pay no taxes on their benefits. For joint filers, the threshold is $32,000.
More Work to Be Done - The COLA this year will help, but it does not address the more essential concerns of seniors living at or near the poverty level, like putting food on the table, filling prescriptions, and making sure they have heat as winter nears. That is why The Senior Citizens League will continue to advocate for Social Security Reform to sustain the program, Medicare reform, and a special 1,400.00 stimulus for Social Security recipients.