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Social Security News

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. What’s 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.

 

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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 programs.

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.

  ● Click for the Issue Brief (.pdf)

Social Security Cost-of-Living Adjustment, Average Monthly Social Security Payment, Monthly Medicare Part B Premium, and Average Monthly Medicare Part D Premium, 1975-2009

Year

Social Security Cost-of-Living Adjustment a

Average Monthly Social Security Payment b

Monthly Part B Premium

Monthly Part D Premium c

1975

8.0%

$212.07

$6.70

--d

1976

6.4%

$232.75

$6.70

--

1977

5.9%

$254.33

$7.20

--

1978

6.5%

$277.89

$7.70

--

1979

9.9%

$314.47

$8.20

--

1980

14.3%

$359.25

$8.70

--

1981

11.2%

$396.28

$9.60

--

1982

7.4%

$410.95

$11.00

--

1983

3.5%

$410.23

$12.20

--

1984

3.5%

$429.46

$14.60

--

1985

3.1%

$443.09

$15.50

--

1986

1.3%

$456.93

$15.50

--

1987

4.2%

$484.01

$17.90

--

1988

4.0%

$504.88

$24.80

--

1989

4.7%

$538.70

$31.90

--

1990

5.4%

$559.32

$28.60

--

1991

3.7%

$592.77

$29.90

--

1992

3.0%

$620.66

$31.80

--

1993

2.6%

$645.91

$36.60

--

1994

2.8%

$665.67

$41.10

--

1995

2.6%

$688.37

$46.10

--

1996

2.9%

$708.70

$42.50

--

1997

2.1%

$734.53

$43.80

--

1998

1.3%

$754.23

$43.80

--

1999

2.5%

$791.18

$45.50

--

2000

3.5%

$842.84

$45.50

--

2001

2.6%

$881.12

$50.00

--

2002

1.4%

$927.23

$54.00

--

2003

2.1%

$963.80

$58.70

--

2004

2.7%

$961.12

$66.60

--

2005

4.1%

$1,011.60

$78.20

--

2006

3.3%

$1,045.85

$88.50

$32.20

2007

2.3%

$1,077.55

$93.50

$27.35

2008

5.8%

$1,083.34

$96.40

$27.93

2009

0%e

$1,155.28

$96.40

$30.36

a COLA increase applies to Social Security payments in the following year.

b Average monthly benefit for retired worker, by year of entitlement, December of each year, except for 2009

which is as of April.

c Actual amounts (and increases) vary by plan. Monthly premiums based on national average monthly premium

amount.

d Part D took effect in 2006.

e Projected.

The Henry J. Kaiser Family Foundation Headquarters - www.kff.org

2400 Sand Hill Road, Menlo Park, CA 94025

(650) 854-9400 Fax: (650) 854-4800

 

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