Senior Citizens May Not Get Social Security COLA for
Years Says Kaiser Medicare Brief
No Social Security increase also means higher
Medicare Part B fees for many seniors says the analysis
June 29, 2009 Senior citizens are not expected to
receive a cost of living adjustment (COLA) in 2010 for the first time
ever. Whats worse, they may not receive an increase for the next three
years. And, it keeps getting worse - no COLA means high Medicare Part B
premiums for about a quarter of all Medicare beneficiaries, according to
an analysis by the the Henry J. Kaiser Family Foundation.
The Medicare Issue Brief, based on the most recent
projections of the Medicare and Social Security Trustees, explains the
relationship between the Social Security COLA and the Medicare Part B
premium, and the implications for those who are covered by both
With Medicare Part B spending expected to continue
to increase in the coming years, beneficiary premium contributions are
also expected to rise to cover 25 percent of total Part B spending as
required by law.
Not all Medicare beneficiaries will be affected.
About three in four Medicare beneficiaries are protected by a
hold-harmless provision in the law that ensures that their Medicare
premiums do not increase more than any increase in Social Security
premiums, according to the report.
Thus, the higher premiums would fall on the
remaining one quarter of beneficiaries - with monthly premiums expected
to rise from $96.40 this year to $104.20 in 2010 and $120.20 in 2011.
Because most in this group are low-income
beneficiaries eligible for both Medicare and Medicaid benefits, Medicaid
would pay the cost of the monthly Part B premium, increasing Medicaid
costs for states.
Higher-income beneficiaries who are required to pay
an income-related surcharge in addition to the monthly Part B premium
would also pay the higher rate, as would any new enrollees who did not
receive Social Security payments in the previous year and/or were not
covered under Part B.
This issue brief was prepared by
Tricia Neuman and Juliette Cubanski of the Kaiser FamilyFoundation. Lisa
Potetz of Health Policy Alternatives provided helpful comments.