No 2016 Social Security Benefits Increase; Medicare Premium Spikes for Some

Stack of cash in a viceIt’s official: Not only will almost 65 million Social Security recipients not get a cost-of-living increase next year,  millions of Medicare beneficiaries will see their premiums for doctor visits and outpatient care go up by more than 50 percent unless the government intervenes.

The Oct. 15 announcement by the Social Security Administration confirmed projections in the Social Security and Medicare trustees reports released in July: For the third time since 2010, there will be no bump in checks because falling energy prices held down inflation in the past year.

This will have repercussions on Medicare premiums. Because of a provision in the law, no cost-of-living-adjustment (COLA) means 70 percent of Medicare beneficiaries won’t see any increase in Part B premiums to cover the program’s cost increases next year. But that means the burden will fall on the remaining 30 percent, or 16.5 million people, although states pay premiums for some low-income residents.

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Though the Department of Health and Human Services hasn’t released final figures yet, premiums for those people are expected to rise from $104.90 to $159.30 per month, a record 52 percent jump, according to government projections released during the summer.

Additionally, Part B deductibles — how much people must pay out-of-pocket before Medicare kicks in — are also expected to rise from $147 to $223. And this increase applies to all beneficiaries.

AARP was among 70 advocacy groups that wrote last month to key lawmakers, asking that they find a solution to lessen the financial impact of these Medicare increases on older consumers. AARP repeated its case in an Oct. 14 letter to members of Congress, urging them again to protect beneficiaries against hikes in premiums and deductibles.

AARP also made a case that the Consumer Price Index used to determine COLAs doesn’t accurately measure the inflation experienced by Social Security recipients, who tend to spend a higher percentage of their income than younger workers on food, housing and health care — items that have had meaningful price increases over the past year.

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“If the COLA was based on a measure which more accurately reflected the living expenses of seniors, there would have been a COLA for 2016. Thus, premiums would be $120.70 and the deductible would be about $169,” Nancy LeaMond, AARP chief advocacy officer, said in the letter to Congress. “These are still significant increases, but much more manageable increases for seniors.”

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